2010 Recruitment Review

Source: Phillip Miller is vice president of communications for Merritt Hawkins, a national physician search and consulting firm and a company of AMN Healthcare (NYSE: AHS), the largest health care staffing organization in the United States. He may be reached at phil.miller@amnhealthcare.com

2010 Recruitment Review: Demand for Psychiatrists Surging

For the past 17 years, Merritt Hawkins has tracked data regarding the physician recruiting assignments it conducts nationwide. The firm’s 2010 Review of Physician Recruiting Incentives examines the 2,813 recruiting assignments Merritt Hawkins conducted during the 12-month period of April 1, 2009, to March 31, 2010.

Information included in the review offers insight into medical specialties most in demand and includes benchmark data indicating the types of financial and various other incentives hospitals, medical groups, and other organizations are offering to recruit physicians in a variety of specialties.

Who’s in Demand?

The review indicates that demand for physicians across all specialties declined in 2010 relative to the last several years. Throughout its 22-year history, Merritt Hawkins has experienced several economic downturns, none of which resulted in a year-over-year decline in the number of search assignments it conducts.

However, the recent recession has proven to be the exception. A widespread decrease in utilization of medical services combined with tight capital markets significantly reduced the financial resources that hospitals, medical groups, and other organizations have been able to commit to physician recruiting in the last 12 to 18 months.

As a result, the number of physician search assignments Merritt Hawkins conducted during the 12-month period examined in the review decreased 14.5 percent from 2009 to 2010. The chart below shows Merritt Hawkins’ search assignments year to year.

Many health care facilities have been in a holding pattern over the last one to two years, waiting for economic turnaround before engaging in medical staff expansion. The recession has also eroded the willingness and ability of many physicians to relocate. Given the financial climate, some physicians have chosen to ride out the recession where they are rather than embracing new opportunities, while others are restricted in their ability to move because of unfavorable real estate situations. Some older physicians, their financial portfolios downgraded by the recession, have chosen to postpone retirement, eliminating the need to recruit to replace them. These factors have contributed to a nationwide lull in physician recruiting in which many health care facilities with an acknowledged need for physicians postponed their recruiting efforts.

For health facilities that have proceeded with physician recruiting, the strongest area of demand remains primary care, defined as family practice, internal medicine, and pediatrics. For the fourth consecutive year, family medicine was Merritt Hawkins’ most requested search assignment, followed by internal medicine (also for the fourth consecutive year). In the last several years, pediatrics has climbed the list of most requested search assignments and was the seventh most requested assignment this year (by contrast, in 2005 to 2006, pediatrics was not in the top 20). Following is a list of Merritt Hawkins’ most requested physician search assignments by specialty.

Most Requested Specialty Searches of 2010
1. Family practice
2. Internal medicine
3. Psychiatry
4. Hospitalist
5. Emergency medicine
6. Orthopedic surgery
7. Pediatrics
9. Radiology
10. General surgery

Primary care remains a focus for many health care facilities, based on a dwindling supply of practitioners and a rising demand for primary care services. The U.S. Census Bureau projects the nation’s population will grow by 49 million from 2000 to 2020 at a time when few U.S. medical school graduates are expressing an interest in primary care. The Association of American Medical Colleges projects a shortage of 46,000 primary care physicians by 2025, a 37 percent deficit. In addition, Merritt Hawkins estimates that health reform will create the need for some 16,000 additional primary care physicians. This estimate assumes that 32 million people newly insured through health reform will generate an average of two more physician visits per capita annually than they did prior to obtaining coverage, resulting in 64 million additional physician visits per year. Using the Medical Group Management Association’s average of 4,000 annual patient encounters handled per primary care doctor per year leads to the 16,000 figure cited above.

Crisis in Mental Health

The 2010 Review signals a continued steep increase in demand for psychiatrists, a specialty where supply is increasingly unable to keep up with demand. The number of psychiatry search assignments Merritt Hawkins conducts has increased in each of the last six years and psychiatry was the firm’s third most-requested search assignment in 2010 (see chart): 

Like primary care, psychiatry is a medical specialty that is attracting fewer U.S. medical school graduates, due in part to the comparatively low income psychiatrists earn relative to other specialists. In addition, psychiatry is a challenging specialty because positive patient results usually can only be achieved through long-term treatment with drugs or therapy. Procedure-oriented physicians, by contrast, practice a cleaner form of medicine in which doctors can achieve immediate results through surgery or diagnostic tests.

Lacking an influence of new doctors, psychiatry has become one of the oldest medical specialties. According to the AMA’s Physician Master File, more than 50 percent of psychiatrists are 55 years of age or older and many are reaching retirement age. By contrast, only 28 percent of pediatricians, 18 percent of family physicians and 22 percent of general surgeons are 55 years of age or older. About one-third of psychiatrists are international medical graduates compared to less than one-quarter of the total physician population. As the supply of psychiatrists tightens, the incidence of behavioral health problems in the United States continues to increase. The Bureau of Health Professions projects that demand for general psychiatry services will increase 19 percent from 1995 to 2020, while demand for child and adolescent psychiatric services will increase 100 percent within the same timeframe. Psychiatric problems related to stress are particularly prevalent during periods of high unemployment and economic downturn such as we are currently experiencing. Two ongoing wars also have contributed to psychological stress on many members of the military and their families.

Lack of access to psychiatric services, though the subject of less media attention than the shortage of primary care services, is shaping up as a national crisis. The U.S. Department of Health and Human Services now designates 3,291 health professional shortage areas for mental health services nationwide, in which 80 million Americans live. Unless the supply of psychiatrists and other mental health professionals can be enhanced, the number of shortage areas is likely to increase.

Trend toward Employment

The review underscores a further trend in physician recruiting — the move by physicians toward hospital employment and away from traditional independent practice. Fifty-one (51) percent of Merritt Hawkins’ 2010 recruiting assignments featured hospital employment of physicians, up 45 percent from the previous year. The chart below shows the growth in number of search assignments featuring hospital employment: 

Physicians today, those in primary care and specialists, are embracing hospital employment to relieve them of the stress of high malpractice rates, the struggle for reimbursement, administrative duties and the general risks and responsibilities of private practice. Hospitals are embracing the employed model in order to reduce physician/hospital competition, to ensure coverage of the emergency department, and to remain competitive in the recruiting market. The employed model also can create the physician/hospital alignment needed to develop and maintain accountable care organizations and to implement the bundled payment systems health reform is expected to generate.

The 2010 review includes additional information regarding physician recruiting trends and incentives and can be accessed at www.merritthawkins.com.