The ongoing doctor shortage continues to make it difficult for hospitals to keep themselves fully staffed. They are competing with private and group practices, non-hospital clinics, and even a locum tenens industry that seems to be finding particularly good success convincing clinicians to make a career out of clinician work.
This is forcing hospitals to change the way they recruit. They are having to pull out all the stops to convince clinicians to come on board. How are they doing it? Through a combination of pay, benefits, and extra perks. As an illustration, consider a report published by Becker’s Spine Review in mid-June 2019. The report detailed five different compensation models that employers are utilizing to help them recruit neurosurgeons.
Each of the five compensation models is described below. Note that they don’t apply just to neurosurgery. Hospitals are using similar models to recruit all sorts of clinicians.
1. Base Salary and Benefits
Hospitals start with base salary and benefits. Your average employed neurosurgeon makes just over $616,000 annually. In the $455,000 range are dermatologists and cardiologists. Pediatricians and family medicine doctors earn between $220,000 and $245,000 annually.
Standard benefits include health insurance, life insurance, paid time off, retirement plans, and continuing education support. Some hospitals pay entirely for continuing education while others cover only part of the cost.
2. Production Bonuses
Hospitals are utilizing something known as work relative value units (wRVUs) to determine how much value the employed doctor is adding to the bottom line. Those units determine if any extra production pay is warranted. In short, doctors earn more for producing more. This gives them an incentive to pay attention to the hospital’s bottom line while at the same time fulfilling their obligation to ensure the best possible outcome for patients.
3. On-Call Compensation
Providing around-the-clock care means doctors have to be on call. In terms of neurosurgeons, Becker’s says the median on-call compensation is $62.50/hour at non-trauma facilities and more than $83/hour at recognized trauma facilities.
4. Straight Salary Contract
Both hospitals and private practice employers tend to offer straight contract salary to newly trained clinicians just getting started following residency. This is the simplest payment model of all. A contract may be limited to straight salary and benefits only or include a variety of bonus pay opportunities. An employer might include bonus pay as a way to encourage greater productivity.
5. Profit-Sharing Opportunities
Last but not least is compensation arranged as profit-sharing. This payment model can be offered in lieu of other forms of payment or in concert with them. For example, consider a new doctor who fulfills the terms of his/her initial salary contract. Assuming he/she is working for a private practice, he/she might be offered a partnership at the conclusion of that contract.
As a partner, the doctor would receive a regular salary as well as a share of the profits generated by the practice. He/she would also share in any losses as well. This is a model that works fine in private and group practices covering a variety of medical disciplines. It doesn’t work well for institutional employers.
Paying Locum Tenens Providers
All five of these payment models apply only to employed doctors. Locum tenens providers are paid differently. Locums are self-employed contractors capable of negotiating their compensation for each contract they enter into. As such, theirs is an entirely separate payment model worth exploring.
As for employers, they base their payment models on their current needs and the kinds of doctors they are attempting to attract. There is no one model that proves appropriate in every situation.