Healthcare Issues & Trends

Advice & Insights for healthcare's Leaders & HR Professionals

Medical Staff Development Plan – Actionable Plan for Physician Recruitment & Documented Rationale for Private Practice Support Payments

Posted on July 15, 2015 by Tony Kouba

Medical Staff Development Plans (“MSDP”) have been used by healthcare organizations over the past three decades to project the local and/or regional need for physician specialties.  Many forward-thinking healthcare organizations have maximized the utilization of a well developed Medical Staff Development Plan for:

·      Facilitating strategic and business planning efforts  

·      Developing strategies toward physician-hospital alignment

·      Differentiating clinical service offerings from competitors

·      Indentifying allied health practitioner needs

·      Documenting private practice recruitment support payments

Hospitals and health systems are required to have a Medical Staff Development Plan in place for the support of charitable purpose (e.g., maintain tax exempt status). The Form 990 requires hospitals and health systems to address community need and the hospital/health system’s role in meeting community “gaps.”  Additionally, the medical staff development plan has practical implications in which it assists in determining whether and how recruitment support can be given to an independent physician group (e.g., IRS regulations, Kickback regulations).  

At its most basic level, an MSDP essentially serves as an action plan for the recruitment (and retention) of necessary healthcare professionals into the community.  A well designed MSDP should include, at minimum, the following components:

·      A description of the community served by the hospital (i.e., the primary and secondary service area)

·      Physician-need-per-population ratios applied to the service area

·      Quantitative adjustments:

-       Aging in the population

-       Physician retirement and recruitment patterns 

-       National and regional healthcare resource utilization trends

-       Incidence of disease

-       Physician productivity

-       Outmigration of patients (types of cases)

·      Qualitative adjustments:

-       Interviews/surveys (physicians, community representatives)

-       Perceived work-style patterns  

-       Perceived recruitment targets of regional physician groups

-       Perceived community access to healthcare resources

-       Call coverage

The medical staff development planning process can be broken down into the following steps:

·      Determine physician supply and demand (defined geographically);

·      Issue the medical staff development plan itself – “fact base”;

·      Establish healthcare organization’s share of providing health care resources to the community; and

·      Determine physician recruitment targets and whether or not assistance can be provided to community-based private practice groups. 

Additionally, its also important for healthcare organizations to have a defined policy regarding physician recruitment.  For example:

·      If there is a deficit in the primary service area, Healthcare Organization can choose to employ a physician to meet that need or assist an independent group in recruitment and/or seeding of a physician. 

-       Recruitment is defined as those activities, and expenses related thereto, in recruiting and selecting a physician candidate.  Seeding is defined as those expenses related to the hiring and ongoing practice of a physician.

·      If there is a deficit in the secondary service area, Healthcare Organization can employ a physician to meet that need but cannot assist an independent group in recruitment and/or seeding of a physician. 

·      If there is a surplus in the primary service area or secondary service area, Healthcare Organization can employ a physician for reasons other than need (need as defined by Stark) but cannot assist an independent group in recruitment and/or seeding of a physician.

There are resources available to utilize when developing an MSDP, such as physician supply and demand statistics or pitfalls of retention plans. Check out the following for further information:

·     A Census of Actively Licensed Physicians in the United States, 2014

·    Top Physician Concerns That Affect Retention and Satisfaction

·    5 Tips for Developing a Lasting Medical Staff Plan

Integrated Healthcare Strategies, a division of Gallagher Benefit Services, Inc., is available to assist organizations with developing, facilitating and documenting the Medical Staff Development Plan and Physician Recruitment Policies.

Contact Tony Kouba at Gallagher Integrated for more information at

Our Top 8 Most Popular Industry Intel

Posted on May 15, 2013 by Gallagher Integrated

In honor of National Healthcare Week, we at INTEGRATED wanted to give back to the dedicated professionals that make our healthcare facilities the places of trusted care that they are.  We thank the men and women in our hospitals nation-wide that play an essential role as providers of care.

Our experts are constantly developing new and insightful content for our clients and the healthcare industry. And here, we've pulled together the top eight most-popular items from the past year, ranging from articles to webinars to videos.

We hope these resources provide your organization with intel that help it operate more effectively, and prepare better for the future. 

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Bozeman Deaconess Health Services (BDHS) Selects Kevin Pitzer as President and Chief Executive Officer

Posted on March 8, 2013 by Gallagher Integrated

We're happy to offer our congratulations to Kevin Pitzer, recently selected as the President and CEO of Bozeman Deaconess Health Services (BDHS)!  Mr. Pitzer starts his post on or before April 15, 2013. 

The announcement also calls for congratulations to MSA Executive Search, an INTEGRATED company and the search firm that conducted the nation-wide search that presented Mr. Pitzer as a top candidate for the position.

According to a press announcement released by BDHS, Terry Cunningham, Chair of BDHS Board of Trustees, said, “Throughout the interview process, Kevin displayed a keen knowledge of the health care industry, and importantly, a firm grasp of and firsthand experience with the coordinated, collaborative care models that will be driving the future of health care delivery. In addition, Kevin has a history of being able to build strong bonds of trust with physicians, and the ability to identify and communicate a strategic vision throughout an organization.”

Jane Groves, Executive Vice President with MSA Executive Search, tells us there was widespread support for Kevin Pitzer as the ideal candidate to fill both the cultural and operational requirements for this position. Members of the Board, Medical Staff, Senior Leadership and Management, plus employee feedback, all reinforced Mr. Pitzer as the best leader to drive BDHS forward.

The announcement provided by BDHS noted that Pitzer’s depth of experience working with physicians will also be of great benefit to the Montana healthcare organization.

Mr. Pitzer was most recently a Senior Vice President of Essentia Health and Chief Administrative Officer of the Essentia Health-West Region which serves eastern North Dakota and western Minnesota.

Read the full press release

The New Health Care Workplace: Health Care Reform and Younger Generations

Posted on February 8, 2013 by Kevin Haeberle

As published in HR Pulse Magazine, Spring 2013 issue. 

I was honored to recently author an article for HR Pulse Magazine, published by the American Society of Healthcare Human Resource Administration (ASHHRA).  Following is a short excerpt from the article.  Click the link at the bottom to download a full copy of the article.

The forward movement of time does funny things to our perspective of work and the people around us. A few years ago, those of us who looked at the future of health care organizations began discussing the impending changes that would be caused by the X and Y generation of employees entering the workplace. These younger employees bring different ideas about work and relationships than the current babyboomer created culture holds. In the early 2000s, the idea that fundamental shifts in management style and approach would be needed was greeted by denial and skepticism. The baby-boomer dominated leadership thought that the new generation of employees would surely mold into the culture of the workplace as it existed at that time. The idea of changing fundamental management systems and programs that had been in place and successful for years was simply too difficult for those leaders to grasp.

Around the same time, some health care organizations started noticing that their current workplace approach was starting to impact the recruitment of younger employees. Senior leaders started thinking that maybe they did have a potential issue and needed to make changes. As this awareness level started to gain traction, the recession hit and the focus on recruitment needs was replaced by wage freezes, layoffs, and high unemployment. The concerns about generational changes and related workplace changes were relegated to a low priority level. The perception was that the problem had gone away since employees of all ages could be heard saying, “I am just happy to have a job.” Unfortunately, the need to change the workplace did not go away. In fact, time marched on and the workplace generational change was moving forward at an accelerated pace, with little reaction from leaders. Like a weak dam holding back a flooded river, the pressure continued to build, and an impending flood was inevitable.

Read full article

Impact Of Healthcare CEO Turnover and External Recruiting on Executive Pay

Posted on February 4, 2013 by David Bjork

The American College of Healthcare Executives (ACHE) has followed healthcare CEO turnover since 1981.  According to ACHE, the nationwide healthcare CEO turnover rate has never fallen below 13%.  In 2011, the turnover rate rose to 16%.  With many executives of the Baby Boomer generation approaching retirement age, the turnover rate could increase even more over the next few years.
Following is an excerpt from my recently published book titled, Healthcare Executive Compensation: A Guide for Leaders and Trustees, regarding the effect turnover has on executive pay within healthcare organizations.
From the chapter: “Impact Of Turnover and External Recruiting On Executive Pay”

Considering more than 5,000 hospitals are operating in the United States, executives have ample opportunity for career advancement.  Some change jobs every few years. This turnover provides plenty of occasions for employers to decide how much to pay the next incumbent or find out what it costs to hire the right person for the job.
More often than not, employers pay the next incumbent as much as or more than the last incumbent.  If they recruit externally, they find out what other organizations are paying experienced executives.  If they choose an external candidate, they often find they have to pay significantly more than they paid the last incumbent.
If they promote an internal candidate, they may start them at a lower salary than the last incumbent was paid, but they rarely decrease the salary range and generally bring them up to the middle of the range within a few years.
When a good executive receives an offer from another hospital and the employer wants to retain the executive, the employer often offers a higher salary. When CEOs and trustees know an executive is getting calls from recruiters, they may increase the executive’s pay or institute a retention incentive to keep the executive from leaving.
The dynamics of the labor market also drive pay upward. Executives learn that they can increase their pay by moving to another organization.  CEOs and trustees learn that they need to keep pay competitive to retain talented executives.  They also learn that it can cost more to hire a replacement than to hold onto the current incumbent.

With higher CEO turnover rates predicted on the horizon, it is more important than ever for healthcare organizations to have strategies in place to retain existing executives, recruit new talent, and implement successful CEO transition and succession plans.

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