Building the business case for investing in recruitment
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Hospitals lose significant revenue when a physician position goes unfilled. This presentation was given to members of the Northeast Physician Recruiter Association. It explains why and how to build the case for a health system to invest in recruitment.
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Building the business case for investing in recruitment
- 1. A case study showcasing Carolinas HealthCare System John Larson, Vice President, Physician & Advanced Practitioner Recruitment & Retention, Carolinas HealthCare System Shawn Kessler, Senior Strategist, ab+c Creative Intelligence
- 2. Shawn Kessler Introductions • Senior Strategist, ab+c • Founded Zero-In Recruitment Marketing • Marketing Specialist – Geisinger Health System, PA • Support multiple recruiter groups: • ASPR • NEPRA (Northeast Physician Recruiters Association) • MAPRA (Mid-Atlantic Physician Recruiter Alliance)
- 3. About ab+c
- 4. John Larson, MHA Introductions • Vice President, Physician & Advanced Practitioner Recruitment & Retention, Carolinas HealthCare System • Formerly: • Director, Physician & Advanced Practitioner Recruitment, Baystate Health, Springfield MA • Physician Recruiter, Dreyer Medical Clinic, Aurora IL • Physician Recruiter, Alexian Brothers Medical Center, Elk Grove Village IL
- 5. About Carolinas HealthCare System • One of the nation’s largest and most innovative healthcare organizations - Nearly 900 care locations - More than 40 hospitals - Academic affiliation • Located in North and South Carolina • Diverse opportunities: - center-city opportunities - rural opportunities - specialized/generalist • Diverse geographic locations
- 6. Looking to the future Where our story begins… • Organization understands the importance of promoting themselves nationally for recruitment • Show the business case behind investing in a stronger recruitment function
- 7. Things to keep in mind: This is the business case… • Leadership within the organization will not be swayed by something ―feeling right‖ • It is critical that all materials presented are as relevant to the organization as possible • Check, then check again, to make sure all calculations are correct… then have someone else check • Don’t present the problems without your ideas for a solution
- 8. Effective Physician & Advanced Practitioner Recruitment An Organizational Imperative
- 9. Success requires the right tools • Solid understanding of our Employment Brand – What is better about CHS compared to our competition? – What are our marketable traits? – What are our key messaging points? – What are the character traits of our ideal candidate? – What are our weaknesses? So we can defend them! • Effective provider recruitment Web Portal – Written specifically for providers, not patients – Organized to make our large system manageable – Easy to use, guiding candidates down the path to employment • Consistent and clear Marketing Tools – Direct mail templates, email templates, journal ad templates, etc.
- 10. The growing physician shortage
- 11. The growing physician shortage • Physician population will grow by 7% • 36% increase in the number of Americans over 65 • In 2011 only 51% of searches were filled nationally—a decrease from 60% in 2010 • Searches that were open for more than one year rose from 36% in 2010 to 42% in 2011 • Primary Care saw its average time-to-fill increase 20% • The ―most urgent health problem facing this country at the present time‖ = access
- 12. The cost of a physician vacancy On quality and patient experience: • See more patients in less time • Retain patients and continue growth • Cover additional call • Family pressures due to more time working • Negative patient perception - physician time = quality • Patient migration
- 13. The cost of a physician vacancy On the bottom line: • Felt beyond the department – pushing into testing, diagnostic and rehab services • Average net revenue = $1,543,788 • $1 paid = $9.38 received • Thousands ―at-risk‖ every week
- 14. Carolinas HealthCare System What it means to us Year to date (9 months): CHS consolidated and non-consolidated employed physicians (1,278.57) accounted for $727,895,549 CHSMG net revenue. This equates to $759,072 CHSMG net revenue per physician, per year. Carolinas HealthCare System is currently seeking 275 physicians. Some of these positions have been open for as long as 2.5 years.
- 15. Carolinas HealthCare System For every month a physician position stays open, Carolinas HealthCare System suffers an average CHSMG net revenue loss of: $63,256
- 16. Carolinas HealthCare System Currently, the average time to fill a position at Carolinas HealthCare System is 10.7 months. If we improve our time-to-fill by just 5%, the organization would realize a CHSMG net revenue gain of $9,306,547 Per Year
- 17. How we will accomplish our goal • Research our unique employment branding value proposition • Develop a best-in-class recruitment web portal • Create consistent and clear marketing tools to push candidates to the portal
- 18. 10 benefits of a strong employment brand • Creates efficiencies and drives strategies • More candidates that match organizational culture • Increased attraction and closing of passive candidates • Lower rate of offer rejection • Larger number of employee referrals • Higher likelihood of employee brand ambassadorship • Increased levels of employee engagement • Provides a competitive advantage • Improved patient satisfaction • Shorter recruitment cycles
- 19. Bottom-line benefits • Two times lower cost per hire • 28% lower turnover rates • Research shows a connection between developing an attractive workplace and performing financially well • 70% of job candidates willing to accept less than their lowest desired salary • Attract at least 3.5 times more applicants per job
- 21. Carolinas HealthCare System Currently, the average time to fill a position at Carolinas HealthCare System is 10.7 months. If we improve our time-to-fill by just 5%, the organization would realize a CHSMG net revenue gain of $9,306,547 Per Year
- 22. Carolinas HealthCare System If we improve by 20%: $37,226,186 Per Year
- 23. “Creativity is intelligence having fun.” — Albert Einstein Questions? Thank you! Shawn Kessler, Senior Strategist, ab+c Creative Intelligence 800-848-1552 skessler@a-b-c.com
Editor's Notes
- Branding = Helping us understand what to say to providersWeb Portal = Gives us a voice to the candidateMarket Tools = Gets candidates to the portal to hear what we have to say
- Current analysis by the AAMC not only factors in the expansion of health care insurance as a result of reform, but also the changes in physician retirements and specialty choice, as well. This newer model illustrates the critical shortfall in the number of all physician specialties that care for older adults Even five year from now – in 2015 – there will be a deficit of 62,900 physicians. Looking out further – to 15 years from now, in 2025 – that shortage is likely to have doubled, with a projected deficit of more than 130,000 physicians across all specialties.source: AAMC Physician Shortage to Worsen Without Increase in Residency Training
- • According to the U.S. Department of Health and Human Services, the physician population will increase by 7% in the next ten years• Census Bureau projects a 36% increase in the number of Americans over the age of 65 in the next ten years – a heavy utilizer of health care services.• According to the 2012 ASPR Benchmarking Survey the percentage of searches filled in 2012 (51%) decreased from 2011 (60%) by 9%. The survey also showed an increase in the percentage of searches that remained open after one year (increasing from 36% in 2011 to 42% in 2012). • This survey also showed a 20% increase in the amount of time it takes to recruit a primary care physician.• In 2006, The Massachusetts Medical Society Physician Workforce Study reported an average of 12.8 months to recruit a practicing physician and 13.8 months to recruit a teaching physician. Based on five years of data, physician recruitment times are consistently the longest for the specialties of neurosurgery (25 months), gastroenterology (20 months), and orthopedics (18 months). It’s important to note that this is the first year the AAMC recognized the beginning of the physician shortage.• According to Gallup’s 2009 Health and Healthcare pool, the “most urgent health problem facing this country at the present time” is access.
- • Increased pressure for physicians to see more patients in less time• Increased pressure for physicians to retain patients• Increased pressure to cover more call• Increased family pressure due to more time being spent working• Patient perception of poorer quality – patients equate time with a physician as quality• Patient migration due to longer wait times and the perception of poorer quality
- • Financial impact is felt beyond the vacancy’s department — pushing into testing, diagnostic, rehabilitation services, etc.• The average net inpatient and outpatient revenue generated by a physician for it’s affiliated hospital or health system is $1,543,788. This accounts for technical and professional charges, but does not cover indirect revenue such as referrals to other specialties.*• When organizations compare physician-generated revenue to their related salaries the financial implications become clear. For example, for every $1 paid to a family practice physician in compensation they brought $9.38 into their respective employer. *• Thousands of dollars are “at-risk” every week a needed physician search is left unfilled.* Merritt Hawkins 2010 Physician Inpatient/Outpatient Revenue Survey (based on responses received by 114 hospitals)—this survey was reported on by Becker’s Hospital Review on May 2, 2012.
- What it means to us:1,278.57 consolidated and non-consolidated employed physicians accounted for $727,895,549 of net revenue over a 9-month period.$727,895,549 net revenue divided by 9 months = $80,877,283 net revenue per month$80,877,283 net revenue per month x 12 months = $970,527,398 net revenue per year$970,527,398 net revenue per year divided by 1,278.57 employed physicians = $759,072 average net revenue per physician, per year
- What it means to us: $759,072 average net revenue per physician, per year divided by 12 months = $63,256
- 10.7 months (current average time to fill) x .95 = 10.165 months time to fill improved by 5%10.7 months – 10.165 months = .535 months.535 months (5% improvement) x $63,256 net revenue per physician, per month= $33,841 gain in average net revenue per opening $33,841.99 x 275 current open positions= $9,306,547 net revenue gain for the organization
- • Knowing who you are and the key messaging points that will attract your ideal candidates allows for communications to become more unified and consistent—providing efficiencies. Knowing your unique employment value proposition allows for better identification of communication tactics and channels to reach ideal candidates.• By communicating your genuine culture the organization allows candidates to self select whether the goals, values, and work environment of an organization matches their personal preference and career aspirations—ultimately improving retention.• When an organization is known as an excellent employer they attract candidates that weren’t initially looking for a new career opportunity. Typically these are the best employees as they get along well with their coworkers and provide a positive work environment.• Improving the offer acceptance rate provides significant cost savings and indicates a higher quality of physician hire (landing your top choice rather than the second or third).• The most cost effective way to find great candidates is through the referral of an existing employee. This also provides for an increase in retention as candidates feel they know the organization better and have an internal advocate that sees value in them.• It is extremely powerful when an employee believes in their organization enough to defend it when something negative is stated or when difficult times create challenging decisions.• One of the greatest benefits of a strong employment brand is a staff that understands the goals of the organization, how they fit into those goals, and actively push to make sure they are doing their part to achieve success.• Our society is brand driven. When candidates are searching though multiple opportunities (sometimes hundreds) it is vital to be viewed in a positive light and to stand out in the crowd.• The better the physician, the better the results… improving patient satisfaction and quality scores.• This is potentially the most significant benefit for a hospital or health system when we are able to make the correlation between the amount of time a search is open compared to the “at-risk revenue” for the hospital or health system.
- • LinkedIn surveyed 2,250 corporate recruiters in the US and learned the following:- The cost per hire is over 2 times lower for companies with strong employer brands- Companies with stronger employer brands have 28% lower turnover rates than companies with weaker employee brands• Research has shown a definitive link between a company’s employment brand and its financial performance. A recent study of publicly traded companies on Fortune’s “100 Best Companies to Work For In America” list by professors at Michigan State University and University of Wisconsin-Madison showed a connection between the strategy of developing an attractive workplace and performing financially well. “Being an attractive employer may create an important intangible asset, positive employee relations, that differentiates firms in a value-producing way,” the authors wrote.• In a 2011 CareerBuilder study, 70 percent of job candidates said they were willing to accept less than their lowest desired salary to work for a company with a strong employment brand. Additionally, the research showed that companies with a strong employment brand attract at least 3.5 times more applications per job posting than do other companies in the same industry.
- 10.7 months (average time to fill) x .95 = 10.165 months if we can improve by 5% 10.7 months (average time to fill) – 10.165 months (improved time to fill) = .535 months (5% improvement in time to fill) .535 months (5% improvement) x $63,256.05 net revenue per month per physician = $33,841.99 average net revenue per opening the organization would gain if we filled positions 5% faster. $33,841.99 (average net revenue per physician if improved by 5%) x 275 current open positions = $9,306,547.25 net revenue gain for the organization
- 10.7 months (average time to fill) x .80 = 8.56 months time to fill improved by 20%10.7 months – 8.56 months = 2.14 months2.14 months (20% improvement) x $63,256 net revenue per physician per month = $135,367 gain in average net revenue per opening $135,367 x 275 current open positions = $37,226,186 net revenue gain for the organization
- Questions?