2003
REVIEW OF PHYSICIAN
RECRUITMENT INCENTIVES
SUMMARY REPORT
2003 Review of Physician Recruitment Incentives
Overview
This report marks Merritt, Hawkins & Associates’ tenth annual review of the physician search and consulting assignments we conduct on behalf of our clients.
The 2003 Review is based on the combined 2,405 physician search and consulting assignments Merritt, Hawkins & Associat4es represented from April 1, 2002 to April 1, 2003.
The intent of the Review is to quantify financial and other recruitment incentives offered to our clients to physician candidates during the course of a 12-month period. The range of incentives detailed in the Review may be used as one benchmark for evaluating which recruitment incentives are customary and competitive in today’s physician recruiting market. IN addition, the Review, which is based on a national sample of physician search assignments, provides an indication of which medical specialties currently are in the greatest demand.
All the following numbers are rounded to the nearest full digit.
Total Number of Physician Search Assignments Reviewed
Medical Settings of Physician Search Assignments
46 States Where Search Assignments Were Conducted
AK, AL, AR, AZ, CA, CO, CT, FL, GA, IA, ID, IL, IN, KS, KY, LA, MA,MD, ME, MI, MO, MN, MS, MT, NC, ND, NE, NJ, NM, NY, NV, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY
Number of Searches by Community Size
2002/03 / 2001/02 / 2000/01 / 1999/000-25,000 / 625 (26%) / 621 (28%) / 531 (26%) / 457 (24%)
25,001-100,000 / 866 (36%) / 777 (35%) / 674 (33%) / 665 (35%)
100,001+ / 914 (38%) / 822 (37%) / 838 (41%) / 779 (41%)
Top Fifteen Searches By Medical Specialty
Other Specialty Recruitment Assignments
Allergy, Breast Surgery, Cardiothoracic Surgery, Cardiovascular Surgery, Child Psychiatry, Critical Care/Pulmonology, Critical Care/Pediatrics, Dermatology, Endocrinology, Facial/Plastic Surgery, Geriatrics, Gynecology, Gynecology/Oncology, Hand Surgery, Hematology/Oncology, Hospitalist, Hand Surgery/Orthopedic, Infectious Disease, Maternal/Fetal Medicine, Neurological Surgery, Nuclear Medicine, Nuclear Cardiology, Occupational Medicine, Ophthalmology, Orthopedic Spine Surgery, Pain Management, Pathology, Pediatrics/Allergy, Pediatrics/Cardiology, Pediatrics/Endocrinology, Pediatrics/Gastroenterology, Pediatrics/Hemotology/Oncology, Pediatric Intensivist, Pediatrics/Neurology, Pediatrics/Orthopedics, Pediatrics/Physiatry, Pediatrics/Pulmonology, Pediatric Radiology, Pediatric Surgery, Pediatric Urology, Perinatology, Physiatry, Plastic Surgery, Rheumatology, Radiation Oncology, Sleep Medicine, Trauma Surgery, Urgent Care, Vascular Surgery
Income Offered to Top Ten Recruited Specialties
Low Average High
Radiology
2002/03 $230,000 $317,000 $500,000
2001/02 $240,000 $286,000 $600,000
2000/01 $200,000 $271,000 $500,000
1999/00 $165,000 $225,000 $300,000
Orthopedic Surgery
2002/03 $230,000 $315,000 $450,000
2001/02 $220,000 $295,000 $450,000
2000/01 $220,000 $287,000 $425,000
1999/00 $170,000 $257,000 $300,000
Cardiology
2002/03 $230,000 $280,000 $475,000
2001/02 $220,000 $273,000 $500,000
2000/01 $180,000 $267,000 $465,000
1999/00 $165,000 $238,000 $350,000
Anesthesiology
2002/03 $225,000 $290,000 $325,000
2001/02 $200,000 $278,000 $325,000
2000/01 $180,000 $240,000 $300,000
1999/00 $140,000 $222,000 $300,000
Family Practice
2002/03 $120,000 $146,000 $190,000
2001/02 $110,000 $144,000 $195,000
2000/01 $110,000 $136,000 $195,000
1999/00 $105,000 $135,000 $200,000
Internal Medicine
2002/03 $125,000 $150,000 $200,000
2001/02 $120,000 $148,000 $180,000
2000/01 $120,000 $145,000 $200,000
1999/00 $100,000 $139,000 $170,000
OB/GYN
2002/03 $190,000 $237,000 $325,000
2001/02 $180,000 $219,000 $325,000
2000/01 $180,000 $227,000 $350,000
1999/00 $150,000 $225,000 $300,000
General Surgery
2002/03 $200,000 $242,000 $275,000
2001/02 $185,000 $221,000 $280,000
2000/01 $180,000 $216,000 $270,000
1999/00 $145,000 $189,000 $300,000
Gastroenterology
2002/03 $200,000 $240,000 $325,000
2001/02 $190,000 $226,000 $350,000
2000/01 $180,000 $219,000 $385,000
1999/00 $155,000 $204,000 $250,000
Psychiatry
2002/03 $130,000 $162,000 $250,000
2001/02 $120,000 $153,000 $240,000
2000/01 $110,000 $148,000 $230,000 1999/00 $100,000 $146,000 $230,000
Pediatrics
2002/03 $120,000 $146,000 $190,000
2001/02 $110,000 $141,000 $180,000
2000/01 $100,000 $131,000 $170,000
1990/00 $100,000 $130,000 $160,000
Urology
2002/03 $210,000 $277,000 $325,000
2001/02 $200,000 $245,000 $325,000
2000/01 $200,000 $237,000 $320,000
1999/00 $175,000 $215,000 $275,000
1998/99 $160,000 $191,000 $270,000
Neurology
2002/03 $150,000 $180,000 $215,000
2001/02 $150,000 $170,000 $210,000
2000/01 $140,000 $165,000 $210,000
1999/00 $130,000 $160,000 $215,000
Pulmonology
2002/03 $185,000 $228,000 $300,000
2001/02 $180,000 $210,000 $260,000
2000/01 $160,000 $205,000 $260,000
1999/00 $150,000 $195,000 $240,000
Otolaryngology
2002/03 $225,000 $270,000 $375,000
2001/02 $215,000 $255,000 $300,000
2000/01 $200,000 $245,000 $280,000
1999/00 $200,000 $240,000 $280,000
Type of Incentive Offered
Type of Guarantee (of 914 Searches Offering Guarantees)
Term of Guarantee (of 914 Searches Offering Guarantees)
Searches Offering “Forgiveness” of Guarantee (of 914 Searches Offering Guarantees)
Time Period of Forgiveness (of 859 Searches Offering Forgiveness)
Paying Relocation
Yes / No2002/03 / 2379 (99%) / 26 (1%)
2001/02 / 2,181 (98%) / 39 (2%)
2000/01 / 2,001 (98%) / 42 (2%)
1999/00 / 1,806 (95%) / 95 (5%)
Amount of Relocation Allowance
Signing Bonus Offered
Yes / No2002/03 / 866 (36%) / 1539 (64%)
2001/02 / 777 (35%) / 1443 (65%)
2000/01 / 590 (29%) / 1,453 (71%)
1999/00 / 456 (24%) / 1,145 (76%)
Amount of Bonus
Paying Continuing Medical Education
Yes / No2002/03 / 2212 (92%) / 193 (8%)
2001/02 / 2,022 (92%) / 198 (8%)
2000/01 / 1,861 (91%) / 182 (9%)
1999/00 / 1,163 (88%) / 228 (12%)
Amount of CME
Paying Additional Benefits
TRENDS AND OBSERVATIONS
Merritt, Hawkins & Associates 2003 Review of Physician Recruiting Incentives indicates that a shift or redirection has taken place in the physician recruiting marketplace over the last year.
Since the 1997 Review, we have observed an increasing demand for specialists throughout all regions of the country coupled with a decline in demand for primary care physicians relative to pre-1997 levels. The 2003 Review reflects a continuation of this trend but with a distinct difference. Since 1997, demand for specialists has centered on four specialty areas: radiology, orthopedic surgery, cardiology and anesthesiology.
In 2002, for example, searches in these specialties accounted for 42% of all specialty searches conducted in that year and 36% of searches overall. By contrast, in 2003, searches in these specialties accounted for 35% of all specialty searches and 30% of searches overall.
While physicians in these four specialties are still in considerable demand, the demand for specialists across the board has increased in areas such as urology, neurology, pulmonology, otolaryngology, neurosurgery, psychiatry, and the pediatric subspecialties. Some hospitals and medical groups, having addressed needs in high-demand areas such as radiology and cardiology, are building and expanding their staffs in areas they may not have recently addressed. While demand for specialists is less narrowly focused on certain specialties, it has broadened across the spectrum.
Demand for primary care physicians such as family practitioners and internal medicine practitioners dropped relative to last year. The decline in demand for internal medicine physicians was particularly significant. Merritt, Hawkins & Associates conducted 152 searches for internists in 2002 but only 113 in 2003, a decline of 26%. Facilities that may have been seeking internists last year as a way of addressing specialty needs have either met those needs in some cases or are committed to finding internal medicine sub-specialists.
Average income offers made to specialists increased across the board relative to last year. Average salaries or income guarantees offered to radiologists grew from $286,000 in 2002 to $317,000 in 2003, an increase of 11%. Average salary or income guarantee offers made to orthopedic surgeons grew from $295,000 in 2002 to $315,000 in 2003, an increase of 7%, while average offers made to cardiologists (non-invasive) grew from $273,000 to $280,000, an increase of 3%.
Significant increases were also seen in gastroenterology, where average income offers grew from $226,000 in 2002 to $240,000 in 2003, an increase of 6%; urology, which saw average offers grow from $245,000 in 2002 to $277,000 in 2003, and increase of 13%, otolaryngology, where average offers grew from $255,000 in 2002 to $270,000 in 2003, an increase of 9%, and pulmonology, where average offers grew from $210,000 in 2002 to $228,000 in 2003, and increase of 6%.
The rise in financial offers made to specialists reflects the growing difficulty of recruiting physicians in a wide range of specialties brought on by increasing demand for services and a static or even declining supply of physicians in some specialty areas. Merritt, Hawkins & Associates and its clients have seen demand for physician specialists steadily increasing for over six years, and based on current demographic and health care delivery trends we project that the recruiting market for specialists will become even tighter in the next three to five years.
Income offers made to primary care physicians, by contrast, remained relatively flat. Average salary or income guarantees made to family practitioners grew from $144,000 to $146,000, and increase of less than one percent. Average offers made to internists grew from $148,000 to $150,000, and increase of less than one percent, while average offers made to pediatricians grew from $141,000 in 2002 to $146,000 in 2003 an increase of 4%. While there are still areas, many of them rural, where primary care physicians are in considerable demand, the increasing number of medical students who have elected to train in primary care has increased supply. There now is a rough equivalency between supply and demand in primary care, though recruiting primary care physicians remains a challenge for some hospitals and medical groups.
Increasingly, financial offers made to recruit physicians come in the form of income guarantees. Income guarantees were offered in 38% of all search assignments Merritt, Hawkins & Associates represented in 2002/03, up from 23% in 1999/00. Income guarantees typically are offered to physicians in private practice. The rise of income guarantees corresponds to the decline in the number of organizations such as hospitals, practice management companies and others that are employing physicians. The great majority of income guarantees offered (94%) include a “forgiveness” clause which excuses any amount of the guarantee which may be outstanding at the end of the contract period in exchange for the physician’s commitment to stay in the community for a stipulated time. Typically, outstanding amounts are forgiven over the course of two to three years.
Other common physician recruiting incentives include paid relocation, offered in 99% of all searches, with an average relocation allowance of $9,000. In each of the last four years an increasing number of Merritt, Hawkins & Associates’ clients have used signing bonuses as an incentive – 36% in 2003 compared to 24% in 2000. The average signing bonus amount in 2003 was $15,000, a number which has remained fairly consistent over the last four years.
Paid continuing medical education (CME) is a standard incentive offered in 92% of search assignments with an average CME allowance of $3,100. Both numbers are consistent with incentives offered in years past.
For further information about this or other Merritt, Hawkins & Associates’ surveys please contact:
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The MHA Group is an organization of affiliated health care staffing firms that includes Merritt, Hawkins & Associates, Staff Care, Inc., Allied Consulting, Inc., Med Travelers, Inc. and American Medical Consulting.