Healthcare providers need effective compensation practices to retain physicians

With a looming physician shortage in the US, hospital organizations need to implement effective and transparent compensation practices and processes to attract and retain doctors, according to a recent report from Hallmark Healthcare Solutions.

The Association of American Medical Colleges (AAMC) projects a shortfall of up to 104,900 physicians in US by 2030. That shortage will be especially hard felt as the population expands and ages. The US population is expected to grow by 12% by 2030, while the number of people aged 74 and older is projected to increase by 73% in the same time frame.

At the same time, more than one-third of active physicians will be 65 or older in the next 10 years, introducing another pressure point to the forthcoming staffing crisis.

Faced by increased demand and a looming shortage of doctors, healthcare organizations have been upping their pay to attract physicians. One physician recruiting and clinical staffing firm reported that their clients had to pay about 10% more than they wanted to land primary care physicians.

The other recruitment incentive is a raft of employment benefits, including student loan repayment, signing bonuses, relocation expenses, car and housing allowances, and childcare assistance.

According to a report from consulting and technology firm Hallmark Healthcare Solutions, the myriad different compensation and benefits packages across the employee base massively complicates management and administration.

“Managing a variety of distinct compensation plans cobbled together from different sources can lead to delays, errors, and other problems,” write the report’s co-authors Dave Butcher and Trey Strecker. “The more plans, the more of a nightmare compensation management becomes.”

Many organizations lack an efficient, automated system for compensation management, instead using some fragmented system comprised of email, Google Calendar, sticky notes, or a siloed third-party system. Such an arrangement leaves benefits admin non-transparent and un-auditable. “The inability of providers to get the information they want in a timely way creates a culture of distrust between provider and administrator,” Butcher and Strecker write. “Providers are left confused, and then skeptical, as to whether their compensation is commensurate with their performance and agreements.”

With fewer than half (48%) of physicians satisfied with their compensation, the Hallmark report argues that an automated, dashboard-incorporating compensation platform can build a bedrock of trust between physicians and their employers. The physicians can easily view and make sure that their package is being administered and payed out properly, avoiding the errors and opacity inherent in rag-tag system.

Miscommunications where an administrator misses a sign-on bonus, for example, are eliminated by having a single-source solution, with the physician’s contract “living” in the same place where pay elements are tracked and calculated.

Aside from giving physicians and admin staff a real-time, easy to view dashboard that instills satisfaction and trust, an automated compensation solution also makes the admin’s job easier. Rather than spending a large amount of time collecting, consolidating, and validating information, the automated single-source system lets admin staff redeploy their resources elsewhere.

With physicians gaining more clout due to constricting labor supply, organizations need to make whatever changes they can to better attract and retain them. An effective compensation process is one of many tools to keep them satisfied.

“Ultimately, the single best way to stand out in staffing – and navigate challenging recruitment/retention situations – is to enable consistent, mutually beneficial arrangements driven by sound organizational processes,” the authors conclude.

Related: US healthcare management consulting market tops $50 billion