Shrinking endowments, a rise in uninsured care, staff layoffs, declines in elective procedures. As the general economy continues to struggle, the tales of troubled hospitals are piling up.
A Thomson Reuters analysis from early March found that half of the nation's hospitals were unprofitable in the third quarter of 2008, and the median profit margin of all hospitals was zero. These financial strains were observed in all sorts of facilities, from major academic to small community hospitals.
Not surprisingly, the economic downturn is affecting the way hospitals and hospitalist groups are recruiting physicians, as well as the concerns and demands of job-seeking hospitalists. Employers have stepped up efforts to maximize productivity in new hires and existing staff, while hospitalists are focused on the perils of switching jobs in a gloomy housing market, and the burden of high student loan debt.
“It's still a great time to be a hospitalist; the opportunities are tremendous,” said Kirk Mathews, CEO of Inpatient Management, Inc., a national hospitalist management company in St. Louis, Mo. “At the same time, it's more important than ever that hospitalists consider their options, and their personal and professional needs, very carefully before making any moves to a new job.”
Experts uniformly agree that the flagging housing market is the top concern for employed hospitalists looking to switch jobs, as well as for homeowner residents. That was definitely the case for Steve Seward, ACP Member, who found a job at Providence Hospital in Southfield, Mich. last July through IPC The Hospitalist Company.
“I was looking for a job in Detroit because my wife got a fellowship there. For sure, the biggest stressor was not knowing how long it would take to sell our old house in Columbus (Ohio),” Dr. Seward said. “We got lucky, though, and it sold pretty quickly.”
Some hospitals are responding to physician homeowners' stress by offering to pay their mortgages or rent for a certain amount of time—sometimes in lieu of a signing bonus.
“These hospitals are saying, ‘We understand you don't want to sell your house right now and take a loss on it, so here is a six-month housing allowance, and that can come in the form of either six months' rent here in your new location, or we will pay your old house payment for six months,” Mr. Mathews said. “It's a creative way to address the specific housing concern.”
The housing market crunch does affect seasoned hospitalists more, but those in residency are not immune, said Doug Smith, a search representative for Delta Physician Placement in Dallas.
“A lot of the doctors I talk to in residency had bought a house while in residency, so they will also still have to sell it when they go. These are primarily residents in major metropolitan areas, which are just getting killed by the housing markets,” Mr. Smith said.
A modest number of working hospitalists with less-than-satisfying jobs have chosen to deal with the difficulties of the housing market and economic downturn by simply staying put, at least for now, Mr. Smith added.
“I'd say, of the physicians I recruit who are already hospitalists as opposed to residents or international medical graduates, there has been about a 15% to 17% drop in the number who are changing jobs now compared to a couple years ago,” Mr. Smith said.
Adam Singer, ACP Member, chairman/CEO of IPC The Hospitalist Company, has also noticed a decline in the number of seasoned physicians looking to relocate, which he attributes to the housing market.
“It used to be a person would just get a job anywhere and move there, but they can't do that anymore because they either can't get into a house, or can't get out of the one they are in,” Dr. Singer said. “We're seeing a little bit less mobility.”
While there's no denying the housing market is generally depressed, job-seeking hospitalists should keep in mind that markets vary in different parts of the country. A person might actually get a great deal in a new location that could help offset the pain of losing money on an existing home, Mr. Mathews noted.
“If you can withstand not realizing the full value you hoped to gain from your current home, you should be able to buy with an equal discount on the other end,” he said.
Retirement benefits and student loans
Retirement benefits are another major concern, especially for experienced hospitalists. Many older physicians now expect to work five to 10 years longer than they anticipated, because their portfolios got crushed in the market downturn. Yet there isn't much a hospital can do to sweeten the pot, as federal regulations basically determine what can be offered, and to whom.
“With respect to qualified retirement plans such as a 403(b) or 401(k) plan, hospitals and all employers are restricted in what they can provide. There is more flexibility with non-qualified plans, but candidates need to understand the risks and benefits of these types of plans,” Mr. Mathews said.
As for residents, who haven't necessarily built a retirement nest egg, some recruiters have noticed a heightened concern with student loan repayment. This, they say, probably reflects a recession-driven public trend toward not wanting to carry a high debt load. At Delta Physician Placement, Mr. Smith has seen a “huge push” by residents for partial student loan repayment in the past four months…and hospitals have responded.
“I have places that are offering $30,000 for student loan repayment, as soon as you sign up. Then they will pay $15,000 to $20,000 per year on student loans for as long as the hospitalist works there,” Mr. Smith said. “If someone can do that for five years and get 75% of their loans paid off, it's a very attractive deal.”
Accepting such a deal is a smart move for hospitalists, he added, because once the economy turns around, credit will likely be harder to come by. Physicians will be helped if they have no or low-balance student loans.
“If you have a decent credit score but a $250,000 loan on your mark, your chances of getting a decent home or car [loan] go down,” Mr. Smith said. “But if you get that off your mark, you will be in a much better place in four to five years.”
Hospitals becoming more cautious
Rather than cut back on salary and benefits, some hospitals are opting to take extreme measures in response to the economic downturn: They are shutting down their hospitalist programs altogether. Typically, this occurs at smaller, rural hospitals, but it can happen anywhere—especially if a facility feels it's not getting much bang for its buck.
“Hospitals have been hiring hospitalists to work seven days on and seven days off, which is the equivalent of 0.7 of a full-time person. So they have to hire twice as many people for the same program, and that's why it is costing so much,” Dr. Singer said. “They are beginning to see this might not make sense.”
Other hospitals are hanging back on hiring more people while they see where the economy goes. A few have even reneged on employment offers when they realized they couldn't afford another hospitalist, experts said. Still others are trying to squeeze more work out of their existing physicians by offering them production incentives for managing extra patients, said Sam Karam, vice president of marketing for Merritt Hawkins & Associates, a physician recruiting firm in Irving, Texas.
“Hospitals are trying to be more efficient all around, and efficiency for a hospitalist program means improving the physician-to-patient balance,” Mr. Karam said. “Production incentives mean hospitals don't have to pay money up-front that isn't guaranteed.”
One big expense to hospitals is in training a new hospitalist, only to lose that person after a couple of years. To combat that, some have begun offering retention bonuses instead of a flat-fee signing bonus, Mr. Smith said.
“After about three years, a hospital starts making its money back on a hospitalist. So these hospitals have begun to stagger it by giving, say, $20,000 on sign-on, another $20,000 the next year, then $10,000 the next year. Then as long as the person stays there, he or she gets a $10,000-per-year retention bonus each year,” Mr. Smith said. “I think the industry will really shift its focus more to retention than recruitment in the next five years.”
Advice for job seekers
Despite the challenges of the current economy, experts don't think it's a bad time to be looking for a hospitalist job. Demand is still high and good offers can be found at plenty of places. They do say, however, that hospitalists should be more deliberate in their thinking about the kind of place they'd like to work.
“Way too often candidates simply look at the call schedule, the salary, the vacation and the benefits, and that's it,” Mr. Mathews said. “You should be looking at whether the community meets your needs, and if the hospitalist group is a good fit. For example, if you like to work hard and want extra shifts, will the group accommodate that? Really try to understand the factors that will give you good personal and job satisfaction.”
Job seekers should also look for a hospital where there is a critical mass of patients—and therefore of hospitalists, Mr. Mathews advised. A group of at least four hospitalists can share patient workload, while a group with only a couple of hospitalists may lead to burnout. Feeling overworked is one of the most common reasons hospitalists leave a particular hospital, he said.
“You want to avoid the possibility of being in a situation where the hospital is either unwilling or unable to get additional help when the workload gets heavy. So look at the patient volumes, or the projected patient volumes if it's a new program, and see if that lines up with the number of hospitalists,” Mr. Mathews said.
Job seekers who own homes should also get a realistic picture of whether they will be able to sell their homes, and if so how much money they might lose on the transaction, before they seriously consider a switch, said Scott Hurst, Delta's principal marketing consultant.
“We've run into this several times where we get a candidate, they are locked in, they are excited about it and ready to move… and it dawns on them they will take an $80,000 bath on their house,” Mr. Hurst said. “And all that does is create a miserable experience for them, us, and our client.”
The best approach for a hospitalist is to pick a community where he or she wants to settle and put down roots, so there's no need to keep moving, experts said.
“Your reason for changing jobs shouldn't just be that you are trying to make more money, or work less,” Mr. Karam said. “To make a change in today's marketplace, you should be moving in order to establish ties to a certain area. Hospitals these days are looking for physicians who will be a good long-term fit.”