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Medical Practice Sales, Appraisal and Financing

Medical Practice Sales, Appraisal and Financing

“Rural physicians' recruitment and retainment has traditionally been a challenge for hospitals and rural communities (Full, 2001, p. 277).”  The ability for healthcare organizations to attract and keep physicians can have an effect on the organization’s capacity to deliver care.  Many rural areas have been traditionally underserved for a variety of reasons.  The unpopularity of practicing in these areas is attributable to a number of factors including lifestyle issues, medical practice issues, and competitive issues (Full, 2001).  Natural challenges exist for rural health organizations in recruiting and retaining physicians.  The strategies used by human resource professionals in the recruitment process and during employment can determine whether some of these challenges can be overcome.

Research on rural physician employment has focused on aspects of the problem in a variety of settings.  Rosenblatt (2006) evaluates the issue of retaining physicians in rural Community Health Centers (CHC’s) and finds that the isolation and poor socioeconomic status of these areas can make them undesirable.  Rural health care delivery systems “…are smaller and less well staffed than their urban counterparts; 20% of the US population lives in rural areas but only 9% of physicians practice there (Rosenblatt et al, 2006, p. 1044).”  Rural CHC’s also report greater difficulties in recruiting family physicians and have a higher proportion of unfilled positions.  At the time of the study, over one-third of these facilities had been looking for a family physician for 7 months or longer.  Some of the barriers to filling these positions included low salaries, cultural isolation, poor-quality schools, housing, and lack of spousal job opportunities.  Recruitment and retention problems can be self perpetuating for rural health organizations.  The undesirability of these areas draws less talent and resources, thus making recruitment of additional individuals more difficult as well.  This difficultly is reflected in the longer time that open positions remain unfilled.

Another factor which may have an influence on recruitment is the gender-balance of the physician workforce.  Rural areas rely on primary care physicians to deliver the majority of care, as specialists are less accessible.  Female physicians are more inclined to select a primary care focus when practicing medicine but are less likely than men to practice in rural areas.  As more women enter primary care and avoid rural practice, a larger percentage of needed primary care physicians may become less accessible.

The growing proportion of women in medicine threatens to exacerbate the ongoing shortage of rural physicians.  Women, who gravitate toward primary care specialties, are less likely than men to practice in rural areas.  Among recent medical school graduates tracked by the American Medical Association (AMA), women comprise 19% of the urban but only 13% of rural generalist physicians.  Because rural areas rely mainly on primary care providers for health care, the recent increase in numbers of women in medical training is likely to have a major impact on the supply of medical providers for rural areas (Ellsbury et al, 2002, p. 391).

Health care organizations must be cognizant of these trends in order to improve recruiting and retention rates.  They must also be aware of the societal and value-related expectations that may influence female physicians.  In a personal example, I worked with a female physician who joined a primary care clinic in a rural part of Florida.   She was a single mother with three young children; the new community initially shunned her for being a single mother.  Though she considered leaving the clinic multiple times, the clinic worked with her and the community to overcome misperceptions and build positive relationships.  After a full year at the clinic she eventually felt less alienated by the community and was more comfortable practicing medicine in this environment.  The clinic was able to retain her by working to overcome the challenges she faced.   Although this is only a single example, it underscores some of the value differences which may be become potential barriers.

A human resources consultant must take many factors into account when creating recruiting and retention strategies in these areas.  The consultant should leverage their knowledge of the challenges in this setting in conjunction with observations of the specific client organization.  Health care organizations are vastly different and the consultant must first become familiar with the organization’s mission and human resources plan.  The consultant can then evaluate the recruitment and retention processes in place to determine whether the desired goals are being achieved.  An effective recruitment process is a product of specific organizational objectives.  “The recruitment process uses the organization’s HR plan as a foundation.  An HR plan includes specific information about the organization’s strategies, the types of individuals required to achieve organizational goals, the recruitment and hiring approaches, and a clear statement of how HR practices support organizational goals (Fried, Fottler, & Johnson, 2005, p. 168).”  Recruitment and retention problems can be the result of systematic problems within the organization or ineffective execution of organizational goals.

The consultant must also assess the front-end aspects of the recruiting function.  Meeting with recruiters or hiring individuals to understand their methods and execution is an important step.  The way candidates perceive an organization and the community may be the product of their experiences with a recruiter.  Knowledgeable and perceptive recruiters are crucial in achieving organizational objectives.  “Those involved in recruitment and selection must have a thorough understanding of the position that needs to be filled (Fried, Fottler, & Johnson, 2005, p. 168).”  Poorly-trained or unknowledgeable recruiters can derail even the most comprehensive talent acquisition plan.  Many mistakes can be committed early in the process long before a candidate reaches a hiring committee or individual decision maker.  Rural health organizations have smaller candidate pools available to them and must be even more effective than their non-rural counterparts in enticing and selecting the appropriate candidates.

Changes to recruitment processes in rural health organizations may be some of the most impactful changes to be made.  As indicated by Pathman, “Poor recruitment is likely to be the principal dynamic underlying local rural shortages (Pathman et al, 2004, p. 1723).”  The processes and practices employed in recruitment are closely related to retention rates.  When hiring for rural positions, additional criteria must be considered which transcend the basic clinical qualifications required.  Looking for certain experience, background, qualities, and interests may help recruiters to discern which candidates are better suited to the environment.  Research has indicated that a physician’s background and medical education may play a role in the decision to pursue employment in certain settings.  In a study (Brown & Birnbaum, 2005) focusing on the Indian Health Service (IHS), students and residents who had completed a medical rotation at an IHS site were more likely to work for the IHS in the future.  “A 1994 analysis at one Navajo site noted that 60% of staff physicians had completed a rotation in the IHS while students or residents…Clinical directors state that these rotations are helpful to recruitment, and IHS physicians who rotated feel it was important in their decision to join the IHS (Brown & Birnbaum, 2005, p.701).”  Having a chance to receive medial training in the particular community played a factor in these physicians returning to this setting to practice medicine.  A consultant can work with in-house recruiters to improve strategies to source candidates with training and experience more suited to rural practice.

Retention is a vital consideration in human resource plans, especially for rural health organizations.  Retaining physicians for longer periods of time can ease the pangs of labor shortages and other scarcities.  Improving recruitment processes and updating relevant selection criterion will aide in these efforts.  Hiring ill-fitting candidates will not help organizations achieve favorable retention rates in the long run, even if resources are immediately needed.  Despite this, the realities of labor markets dictate that less desirable candidates may be needed to fill in the interim until permanent solutions are found.

In circumstances where a position has to be filled in a short period of time, or when there are labor shortages in a particular area, an organization may simply hire whoever is available, assuming the individual possesses the minimum level of qualifications.  This is a frequent occurrence in staffing health centers in remote or otherwise undesirable locations. Applicant availability, rather than the comparative competence of the applicant, is key in such situations (Fried, Fottler, & Johnson, 2005, p. 179).

Organizations can hire locum tenens to fill interim gaps but truly need solutions that will ensure long term coverage with the proper fitting talent.  A prudent consultant will devise creative ways to accomplish these goals.  The consultant must also take a careful look at other facets of the organization to determine where additional barriers exist.  The working environment and political atmosphere may contribute more to the attrition problem than the labor market or detractions of the community.  Organizations encounter different obstacles in their attempts to retain valuable employees.  “Successful retention is dependent on the ability of organizations to correctly identify the most important causes of turnover (and retention) and to implement strategies that appropriately target these factors (Fried, Fottler, & Johnson, 2005, p. 196).”  There are a variety of internal factors which a consultant must consider and decide to address before committing to a particular course of action.

The research conducted into this topic points to serious challenges in recruiting and retaining physicians in rural areas.  There is a combination of attributes that make rural practice less desirable, in addition to general trends which drive some physicians away from these areas.  Challenges also exist in the recruiting methods and internal factors related to specific rural health care organizations.  There are genuine ways to overcome these problems and organizations must take creative approaches in addressing their unique challenges.  Ellsbury suggests that “…rural communities and practices recruiting physicians should place high priority on practice scheduling, spouse-partner, and interpersonal issues in the recruitment process (Ellsbury et al, 2002, p.391).”  Solutions to these problems may require an added sense of creativity and counterintuitive strategizing.  A combination of specific strategies within an organization and a deep knowledge of macro issues concerning rural practice are essential to forming solutions.  The need for qualified physicians will continue to rise and will magnify needs in underserved and less desirable areas.  Continuous research is needed to understand the intersection of supply and demand of physicians, to comprehend the impact of labor forces on rural areas, and to develop strategies to overcome hiring challenges.  This will allow health organizations to improve the recruitment and retention of physicians in order to provide care to the communities that are in most need of health resources.

Brown, S.R., Birnbaum, B. (2005). Student and resident education and rural practice in the southwest indian health service: A physician survey. Family Medicine. 37(10). 701-705.

Ellsbury, K.E., Baldwin, L., Johnson, K.E., Runyan, S.J., Hart, L.G. (2002) Gender-related factors in the recruitment of physicians to the rural
northwest. The Journal of the American Board of Family Medicine. (15)5. 391-400.

Fried, J.B., Fottler, M.D., Johnson, J.A. (2005). Human resources in healthcare: Managing for success. 2nd ed. Chicago: Health Administration Press.

Full, J.M. (2001). Physician recruitment strategies for a rural hospital. Journal of Healthcare Management. 46(4). 277-282.

Pathman, D.E., Konrad, T.R., Dann, R., Koch, G. (2004).  Retention of primary care physicians in rural health professional shortage areas. American Journal of Public Health. 94(10), 1723-1729.

Rosenblatt, R.A., Andrilla, C.A., Curtin, T., Hart, L.G. (2006). Shortages of medical personnel at community health centers: Implications for planned expansion. The Journal of the American Medical Association. (295)9. 1042-1049.

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Christopher Majdi, MSHCA, CHBC
Certified Healthcare Business Consultant
Master of Science, Healthcare Administration
Member, Institute of Business Appraisers

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