Home Cover Story Is the hot job market cooling off?

Is the hot job market cooling off?

December 2010

Published in the December 2010 issue of Today’s Hospitalist

What a difference a year makes. Just over a year ago, Wes Chandler, MD, president and CEO of Pacific Hospitalists in Newport Beach, Calif., was scrambling to find six hospitalists to staff a new program. This year, his three programs are fully staffed, and he’s got a waiting list of hospitalists “all experienced “who are hoping a spot in one of his Orange County programs will open up.

“I’ve got three very good hospitalists right now to whom I’d give jobs if I could, but there aren’t any openings,” Dr. Chandler said. “They’re all getting on staff at the hospitals and working part-time with us, and they know we’ll grow by one or two hospitalists a year. They’re waiting for that to happen.”

This is a complete turnaround from seven years ago, when the hospitals Dr. Chandler’s group staffs had to use outside recruiters. “Back then, we used headhunters, and we needed them,” he says. “Today, the candidates are approaching us. If you want to practice at one of the best hospitals in Orange County, whether you’re a hospitalist or an ER doc, you’ll face stiff competition.”

Orange County may be an anomaly, given the fact that recruiters see Southern California as the nation’s tightest recruitment market this year for physicians. But the “no vacancy” sign for hospitalist groups is out in many urban areas, continuing a trend that first emerged last year.

That doesn’t mean, however, that the boomtime buyers’ market that hospitalists have enjoyed has shifted instead to a sellers’ advantage. It does mean that the recruiting frenzy of years past has calmed down a bit “and that hospitalists looking for either their first job or a new opportunity may need to be more flexible than in the past, when having a pulse and a stethoscope may have been all they needed to attract multiple job offers.

“Supply is catching up with demand a bit,” says Leslie Flores, MHA, a principal with Nelson Flores Hospital Medicine Consultants, which is based in La Quinta, Calif. “The hospitalist looking for a job now might have one to three offers to choose from, not a dozen.”

Where the jobs are
According to Ms. Flores, the hospitalist saturation that began to appear in some metropolitan areas last year is ongoing. “That’s still the case,” she says, “and it’s even moving into some smaller metro and rural areas. I’ve heard directors in some places say, ‘We used to have a horrible time trying to recruit hospitalists to this program, but now it seems easier than ever.’ ”

Where is saturation a factor? In many of the same markets where physicians of just about every specialty are having a harder time finding opportunities: Boston, New York, San Francisco, Atlanta, Minneapolis, Chicago, Seattle, and in California from Los Angeles south.

Those tend to be the same markets where hospital medicine first took hold, and where the frenzied pace of recruiting and growth just couldn’t be sustained. But recruiters are quick to point out that jobs are out there “plenty of them “in smaller urban centers, like St. Louis, Mo., Las Vegas and Dallas, and in scores of even smaller, secondary markets.

Regina Levison, president of the El Dorado, Calif., recruiting firm Levison Search Associates, cites Denver as a great metropolitan area to consider. “Denver hasn’t slowed down like many of the other big cities, and there are new programs and growing ones there,” Ms. Levison points out. She and her partners, she adds, are in the process of recruiting for more than 100 hospitalist positions, “but generally, it’s the secondary markets where we’re seeing a lot of activity.”

She mentions areas like Anacortes, Wash., about 90 minutes north of Seattle, and mid-sized cities throughout the Southeast and Midwest that are close to major urban centers. For candidates who can’t be flexible on geography and want a job in a top-tier market, says Ms. Levison, they have to be prepared to cave on their schedule.

“Those physicians are going to get the night shifts in their No. 1 location,” she points out. “They won’t have to staff those shifts forever, and at least they’ll have their foot in the door.”

Community hospitals: no slowdown
Hospitalist companies that focus largely on suburban and secondary markets, particularly in community hospitals, say they’ve seen no recruiting slowdown at all.

“We’ll hire 150 doctors this year, primarily staffing new programs, and we’ll grow 45% in 2010,” reports Stephen Houff, MD, president and CEO of Hospitalists Management Group (HMG) in Canton, Ohio, which now employs nearly 500 hospitalists. The company operates some programs in urban centers, but the vast majority is in what Dr. Houff describes as HMG’s “sweet spot”: 100- to 300- bed community hospitals.

He adds that a fair amount of HMG’s business now is coming from established programs that want new management for poorly performing services. “We’re getting a lot of calls from larger hospitals that have finally had it with their current program,” Dr. Houff says, “and they’re willing to endure some disruption.”

The need to reconfigure ailing programs is also driving new business at Inpatient Management Inc. (IMI) in St. Louis. The 13-year-old firm, which has about 100 hospitalists working in 15 hospitals, is being tapped to do program makeovers and assume management for hospital-employed programs. That often translates into new hiring, says Kirk Mathews, the company’s CEO. “That’s what we’re hearing: ‘We have a program, but it’s in chaos “or it’s not performing. Can you help?’ ”

What might hospitalists find if they join programs undergoing such transitions? According to Ms. Flores, new recruits might run into relationships that are still strained from the previous program and the need to prove themselves to a skeptical administration or medical staff.

On the other hand, “An organization might be so relieved to get new infrastructure,” she adds, “that a hospitalist joining the practice could be welcomed like a rock star.”

The impact of hospital consolidation
Like HMG, IMI is also still doing a brisk business in program creation or augmentation in smaller markets, primarily in the South and Midwest.

“They’re getting fewer and farther between, but we’re still proposing new programs to 250- to 300-bed hospitals that don’t have one,” Mr. Mathews says. “There are still sizable cities where candidates, even residents coming out of training, can find good jobs.” Those markets include Memphis, Omaha, Shreveport, La., and both Louisville and Lexington, Ky. They’re not in the top 20, he admits, but there are “nice places where there’s still a competitive recruiting environment.”

Recruiters also point to a new wave of hiring related to hospital consolidation: Single hospitals are partnering with larger health systems that already have hospitalist programs in place, and those programs start migrating into the smaller facilities.

And opportunities for both individual jobs and new programs are arising from a previously quiet sector: medical groups, according to Travis Singleton, senior vice president of national recruiting for Merritt Hawkins Associates in Irving, Texas.

“The six-doctor internist group that wouldn’t have started a program five years ago now is,” Mr. Singleton says. “It’s a combination of the hospitalist model being more accepted and the quality-of-life factor for community PCPs.”

Among medical groups launching new programs, he points out, many are being funded by a hospital partner and not picking up the recruiting tab themselves. Hospitalists considering such positions, he adds, need to make sure that groups just entering the hospitalist market have the kind of infrastructure “for billing, for example ” that they need, as well as realistic expectations.

“When you’re doing something completely different than anyone else in your group,” Mr. Singleton notes, “sometimes groups don’t yet have the necessary sophistication when it comes to compensation plans and partnership tracks.”

New recruiting incentives
Mr. Singleton also notes that one of the major factors that inhibited recruitment in the last couple of years “the real estate market “has evened out, at least on a national level. While some regions are still hard hit (think the Southwest and Florida), physicians’ inability to relocate because of real estate problems is no longer so much of an issue.

In part, he says, that’s because some hospitals in the past 15 months “have become very aggressive in offering stipends to offset a loss on your home, where you may have seen a signing bonus before.” Such incentives to individual physicians can range, he explains, from $20,000 to $40,000 and up. Hospitalists moving into areas with expensive real estate may also find hospitals willing to “almost become a co-signer,” Mr. Singleton adds.

But while some hospitals may help with bank loans, hospitalist candidates everywhere should expect more scrutiny.

“Hospitals are getting tougher because the cost of a mis-hire is just so astronomical,” says Mr. Singleton. “Hospitals are sick of retention problems, poorly qualified physicians and multiple interviews.” Those same factors, he adds, have also led a growing number of hospitals to use locum hospitalists before offering them a permanent position. More hospitalists are likewise taking that dating-game route before signing on.

At the same time, survey data published by the Society of Hospital Medicine-MGMA this year found that at least some hospitals are finding experienced physicians who want to make the switch to hospital medicine. Hospitalist consultant Ms. Flores, who helped administer that survey, says that data indicate that nearly 55% of new hospitalists came from “a different field of medicine,” which could include office-based practices, vs. 28% from residency or fellowship.

“That’s the complete opposite of 2007-08 SHM data,” Ms. Flores says, “which found that 50% of new hospitalists came straight from residency.”

More scrutiny of potential recruits
HMG’s Dr. Houff likewise says that hospitals are much more informed “and tough.

“There were uninformed hirers/employers before, and I think we’ve reached a point where hospitals are not just going to open a checkbook and say ‘We want a program, and what will it take to get us there?’ ” Dr. Houff says. “Those days are over. Now hospital administrators understand what revenues and quality ought to be, and they’re asking: ‘Why aren’t we there?’ ”

For individual candidates, he adds, that translates into more scrutiny of their individual performance. It also has led to another trend: high-level administrators getting much more involved in recruiting. “It’s the physician leader in larger facilities,” Dr. Houff notes, “or it may be the CEO of a 100-bed hospital.”

Robert Reynolds, MD, CEO of PrimeDoc, a private practice hospitalist company based in Asheville, N.C., that has 100 physicians working in 12 sites, is experiencing that trend firsthand.

“We’re having to pay more attention to performance measures being on track in our programs,” Dr. Reynolds says. “Hospitals are doing much more performance measurement now, and they’re including incentives to encourage better performance from their hospitalist teams.” That greater focus on performance, recruiters say, continues to drive up the premium on experienced hospitalists over recent graduates.

At the same time, prospective recruits “including physicians straight out of residency “are becoming more sophisticated in their job search. While some recent graduates may still make knee-jerk decisions based solely on salary, others now know what to look for.

That’s according to Brian Bossard, MD, who founded the 20-physician hospitalist program at BryanLGH Medical Center in Lincoln, Neb., nine years ago. In the last two years, Dr. Bossard has staffed up two new programs that his group started in rural community hospitals.

Residents now “have a much higher level of understanding than even two years ago” that they need to take a hard look at factors like how long a program has been established, what type of infrastructure is in place and whether programs have the right number of physicians for patient volumes.

“It’s no longer quite as necessary to pay exorbitant salaries” to snag good candidates, Dr. Bossard says. “That probably hurts programs that just a few years ago would have been very successful recruiting simply because they paid 10% or 15% more in salary.”

A coming recruiting wave?
In Southern California, Dr. Chandler says that his group’s virtual hiring freeze could easily change.

He and his colleagues would consider starting another program with the right hospital partner, for instance. They’re also looking into new service lines “like post-discharge clinics “that programs would have to staff up for.

But given his group’s long history of practicing in California, Dr. Chandler does not believe that changes soon to arrive as part of health care reform are going to have a big impact on his recruiting plans. Potential changes include the establishment of accountable care organizations (ACOs), which are alliances of physician groups, hospitals and others that pool their resources and take a single payment for a patient’s care.

“We’ve been taking care of IPA/HMO patients for years and are used to integrated health care and capitated forms of payment,” Dr. Chandler explains. “If our traditional Medicare patients were to come to us through an ACO, it would just be a different access point.”

But in other parts of the country, recruiters say, the development of ACOs may indeed fuel another major wave of hospitalist recruiting.

“I think we’ll see another big increase in demand,” says Ms. Levison. “Hospitalists’ role in terms of discharge orders, coordinating case managers and making sure that primary care physicians are in the loop for follow-up care is going to be the key to keeping patients from bouncing back to the hospital.”

Bonnie Darves is a freelance health care writer based in Seattle.

New programs? New rentals

WHILE HOSPITALIST POSITIONS IN SMALLER COMMUNITY AND RURAL HOSPITALS have been notoriously hard to recruit for, Brian Bossard, MD, has been able to staff two brand new programs in the last year or two “in Nebraska.

Dr. Bossard, who nine years ago founded the 20-physician hospitalist program at BryanLGH Medical Center in Lincoln, Neb., now also heads up a six-physician hospitalist group at a community hospital in North Platte, Neb., and a four-physician group at an even smaller hospital in Columbus, Neb.

In staffing all three of the services, Dr. Bossard says he’s been able to draw on two residency programs in the state. Physicians born and raised in the Midwest, he points out, are much more likely to want to stay in the Midwest after training. In the smaller programs, he has also relied on sponsoring visa candidates to get those programs up and running.

And he has come to count on doctors willing to commute, and he has had to get into the apartment rental market to help recruit. Two of the four physicians in the smallest program live in Omaha, Dr. Bossard says “a drive of an hour and 15 minutes. “We’re not able to provide 24/7 onsite coverage there, so we provide an apartment,” he explains. The physicians who live in Omaha stay in the apartment on the nights they’re on call.

In the last year or two, Dr. Bossard says he’s also been surprised to see some new and unexpected competition for hospitalist recruits: the lure of an outpatient practice.

“I’m noticing a few more internal medicine physicians now looking for office-based practices as a career choice right out of residency,” says Dr. Bossard. “That may be a product of the fact that hospital medicine programs have now made a traditional medicine practice more appealing in terms of quality of life.”