Roadblocks to Physician Recruitment and Retention: Financing

Roadblocks to Physician Recruitment and Retention

Part Three: Financing

AdobeStock_224612958 [Converted]

Non-qualified deferred compensation (NQDC) plans can help hospitals and health systems recruit and retain physicians. 

 

Unfortunately, most healthcare organizations do not fully utilize this tool. In previous posts, we talked about how a lack of thoughtful design and communication can hinder a plan’s effectiveness. Today, we’ll discuss financing and its role in creating a plan that supports an organization’s goals. 

 

The importance of financing

 

A NQDC plan does not have to be financed. But when hospitals choose not to finance their plans, it can create distrust among physicians. This is understandable given that, once a physician defers their income, they’re totally dependent on their organization’s ability to make payments. Distrust often lowers enrollment rates, negatively impacting the success of the plan.

 

Choosing the right method

 

It’s important for hospitals to finance their plans, but it’s equally important to finance them in the right way. If a hospital has chosen a financing approach that’s ill-suited for its situation, its plan can become a financial liability. 

Financing options include:

 

  • Cash: Future benefits are paid from the employer’s cash flow when needed.
  • Corporate Owned Investments: The organization invests in mutual funds in order to pay future obligations.
  • Corporate Owned Life Insurance: The organization purchases life insurance to pay future obligations while providing tax-deferred earnings and tax-free distributions (subject to contract limits and charges).
  • Combination: The above strategies can be combined to create a customized solution.

 

How Maxworth Can Help 

 

We’ll assist you in analyzing your financing options and can create detailed models that will help you determine which strategy best suits your needs. 

 

To learn more about our NQDC plan strategies, schedule a time to speak with one of our plan consultants.

 

SIGN UP FOR OUR NEWSLETTER

If you would like to receive industry updates and articles like the one you see here, complete the form below
Something went wrong. Please check your entries and try again.

Want to Learn More? Read the Latest From MaxWorth

The future of call pay

The Future of Call Pay Healthcare is always changing, and the pandemic accelerated change in many ways. Healthcare leaders and physicians might be wondering how recent changes will impact call pay. Let’s take a look at the origin of conflict over call pay, factors that are perpetuating it, and why…

MaxWorth’s longest running call pay program is better than ever

MaxWorth’s longest running call pay program is better than ever More than fifteen years ago, Winchester Medical Center became MaxWorth’s first healthcare client when we helped them solve a call pay conflict that was threatening their ability to staff their emergency department. Today, the hospital’s call pay program is just…

MaxWorth Insights: The Call Pay Solution Anniversary

MaxWorth Insights: The Call Pay Solution Anniversary A conversation with Steve Worthy, Max Hockenberry and Dr. Tom Oliver MaxWorth Consulting Group, LLC · The Call Pay Solution Anniversary Celebrating the anniversary of our longest-running call pay program   On this episode of MaxWorth Insights, we’re celebrating the anniversary of our first call…

Nurse compensation: Know what benefits matter most

Nurse compensation: Know what benefits matter most Nursing turnover rates are increasing. In 2019, they stood at 18%, and by 2021, they had risen to 22%. Today, that number has reached 37% in some areas. The full extent of the pandemic’s impact on nurse retention is yet to be seen,…