New physicians are seeking employment, are your benefits aligned with this trend?
The 2019 Medscape Young Physician Compensation Report shows that the majority of new physicians prefer employment over private practice. In fact, another Medscape report showed that only 22% of residents were considering self-employment.
This comes as no surprise given that more physicians are employed than ever before. Rising costs, regulatory complexity, and economies of scale have all played a role in driving more physicians toward employment.
Employment trend impacts compensation
The rise in employment has brought about a change in the way many physicians are compensated. As hospitals compete for physician talent, they’re searching for compensation strategies that will distinguish them in the marketplace.
It’s important for hospitals to remember that compensation practices that are prevalent in other industries may not be sufficient for physician employees. When we think of employee compensation, we typically think in terms of salary and qualified retirement plans. While it’s common to see physician compensation packages that include RVUs, signing bonuses, and/or a form of income guarantee, these elements won’t distance a hospital from its competition. Furthermore, they won’t help physicians with their unique needs. Physicians typically have a greater-than-average student loan debt. And, since they’re highly compensated, they often require creative retirement planning solutions.
Accounting for physicians’ unique needs
Hospitals can account for these needs by offering a more balanced rewards suite that combines at-risk, short-term bonuses with long-term rewards. These components are highly customizable and can be aligned with a hospital’s organizational goals. Through our strategic partner network, our clients are able to analyze revenue by provider and compare provider productivity relative to patient complexity. This enables them to reward productivity and quality, which ultimately results in improvement in these areas. In fact, improvement in productivity often offsets the cost of additional bonuses and rewards.
Keeping physicians’ unique situation in mind can turn compensation into a tool for attraction and retention. Since competition for physician employees is on the rise, it’s important for a hospital to make sure it has the right compensation strategy in place to secure the future of its medical staff.
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