By Allison McCarthy

For many hospital leaders, the cost of recruiting physicians can be a mystery. While it's apparent that the revenue benefits associated with a newly recruited physician often outweigh the costs, what should organizations expect to spend in the process? Will an internal physician recruitment function yield a more efficient cost then frequently using outside firms? Are there benchmarking data to determine an acceptable ROI on the recruitment effort?

The 2009 Recruiter Benchmarking Survey, sponsored by the Medical Group Management Association (MGMA) and the Association of Staff Physician Recruiters, was conducted to help bring some light to this situation. The report, available through MGMA at www.mgma.com,  was based on data provided by in-house physician recruiters for hospitals, HMOs, or physician practices, and others that actively recruit physicians.

In 2007, the median total cost to recruit a primary care physician ranged from $5,000-$5,118.



But when you look at the full range of costs reported, there is significant diversity. Suddenly the "norm" gets lost.



Why such a huge span? There are a number of contributing factors that make it difficult for hospitals to benchmark to external measurements, including:

• Geographic appeal. This includes the medical practice economic environment (e.g. reimbursement rates, managed care influence, practice expenses), the cost of living, and lifestyle needs and interests. The more positive these attributes, the easier it is to attract prospects and limit recruitment expenses.
• Efficiency of recruiting multiple physicians in the same specialty. Marketing efforts can be spread across several practice opportunities, creating greater cost efficiency per search.
• Alignment of opportunity with market preferences. Research shows the current market prefers group to solo/small practice settings, single specialty rather than multispecialty groups, employment over ownership, and call coverage schedules that support a balanced lifestyle. The closer the offering comes to meeting these preferences, the more cost effective it is to find a match.

External benchmarks are valuable, but the more valuable information lies within. Once you develop internal tracking and trending information to analyze your organization's recruitment expense, you can easily measure the concrete results of recruitment efforts. Metrics may include cost, length of search, assigned versus unassigned closure rates, interview-to-close ratios, but also the "softer" outcomes: feedback from both hires and candidates who turned you down about the nature of the practice and the organizational culture.

The value of a strong in-house physician recruitment function is that it operates not just as the organization's sales force but also as its intelligence center, monitoring and analyzing performance in soliciting, managing, and closing the deal.

Your organization's results in both the concrete and softer categories will provide a more realistic picture of what it costs to recruit that physician hire. Using this data, you can benchmark each search against its own performance. The alternative, relying solely on external benchmarks to allocate recruitment resources, can generate faulty assumptions and decisions that may ultimately inhibit or prevent your organization from achieving it's recruitment goals.

Allison McCarthy, principal, Barlow/McCarthy, Hospital-Physician Solutions, can be reached at amccarthy@barlowmccarthy.com

Publication Date: Monday, August 24, 2009