New Physician Recruiting Incentive Survey Shows National Market Shift

By Mark Smith, president of Merritt Hawkins

July 13, 2011 - Every year for the last 18 years Merritt Hawkins has released its Review of Physician Recruiting Incentives, a document which tracks nationwide trends in physician recruiting.

The 2011 Review is based on the 2,667 physician recruiting assignments Merritt Hawkins conducted between April 1, 2010 to March 31, 2011. Like previous Reviews, it serves as an indicator of what types of physicians are in most demand, the various practice settings into which they are being recruited, and the financial and other incentives they are being offered.

Over the years the Review has illustrated how physician recruiting trends are reflective of broader developments in the healthcare market. In the mid-1990s, for example, the Review demonstrated the expansion of managed care and the concurrent demand for primary care gatekeepers. After the managed care model failed to take hold, the Review reflected a pervasive demand for high revenue-generating medical specialists that is typical of a fee-for-service based system.

The 2011 Review continues this tradition, illustrating how medical practice is evolving away from the traditional, private practice model toward the employed model. During the 12 month period covered by the Review, 56% of the physician search assignments Merritt Hawkins conducted featured hospital-employed settings, up from 23% five years ago. Only two percent of Merritt Hawkins’ search assignments featured openings for independent, solo practitioners, down from 17% five years ago.

The Review strongly signals that the era of the independent physician who owns and runs his or her practice is fading. Many independent physicians, both primary care doctors and specialists, are embracing hospital employment as a way to minimize the administrative burdens and financial risks of private practice. Many hospitals are seeking to employ doctors in order to create the aligned structure required by Accountable Care Organizations (ACOs) and the general shift toward value-based reimbursement. While traditional private practice may remain viable in some markets, it is apparent that the majority of physicians in the near future are likely to be employed by increasingly large hospital systems or medical groups.

Both health reform and market dynamics are compelling hospitals, medical groups and other organizations to find new methods for compensating physicians that are based on quality of care and cost efficiency metrics rather than number of patients seen, charges collected or other volume-based metrics. However, Merritt Hawkins’ 2011 Review suggests that in the “real world” physicians are still compensated on volume-based formulas, particularly the number of work units (known as relative value units, or RVUs) they accrue. Over 90% of physician searches in the 2011 Review that featured physician production bonuses reward physicians for fee-for-service style volume, while less than seven percent reward physicians for meeting quality of cost objectives. Of these, 52% measure physician productivity through RVUs.

By measuring the amount of work and expertise physicians expend treating patients, rather than by merely counting number of patients seen or charges collected, RVUs can act as a transitional payment model, allowing for a more gradual migration toward value-based metrics. The cultural shift between fee-for-service and value-based payment is so profound that some type of bridge is needed to link the two. The 2011 Review indicates that RVUs are serving as that bridge for many hospitals and medical groups.

The 2011 Review also indicates that primary care physicians, including family physicians and general internists, remain the type of doctors in highest demand. For the sixth straight year family physicians were Merritt Hawkins’ most requested type of doctor, followed by internists, hospitalists, psychiatrists and orthopedic surgeons. Health reform, which enhances the role of primary care doctors by encouraging new delivery models such as ACOs, is one factor driving the need for additional family physicians and internists.

Complete results of Merritt Hawkins 2011 Review of Physician Recruiting Incentives can be obtained by calling Merritt Hawkins at (800)-876-0500 or at

Mark Smith is president of Merritt Hawkins, the nation’s largest physician search and consulting firm and a company of AMN Healthcare. He may be reached  

For more information read:
Changes in Physician Employment Practices