September 26, 2025 • 37 mins
Kate Taylor, Associate Principal, ECG Management Consultants, speaks with Bruce Toppin, Chief Legal Officer, North Mississippi Health Services, about how to recruit providers in a very competitive market while following strict guidelines that are frequently changing. They discuss the market backdrop; issues related to fair market value, commercial reasonableness, and recruitment incentives; and strategies for bridging the gap between competitive offers and compliance. Sponsored by ECG Management Consultants.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
This episode of AHLA Speaking of Health Law is
sponsored by ECG ManagementConsultants.
For more information, visitecgmc.com.
SPEAKER_03 (00:17):
Hello, everyone, and welcome to Regulations versus
Recruitment, Crafting CompliantCompetitive Offers.
I'm Kate Taylor, and I'm anassociate principal at ECG
Management Consultants.
I spend a significant amount oftime working on physician
compensation arrangements andget, I couldn't even tell you
how many phone calls fromclients about working through
(00:38):
physician arrangements anddealing with compensation
matters.
So I'm excited to talk to youabout this topic today.
Bruce?
SPEAKER_01 (00:44):
Yes, my name is Bruce Toppin.
I'm the chief legal officer atNorth Mississippi Health
services, a rural health caresystem based in Tupelo,
Mississippi.
I'm the chief, besides chieflegal officer, I'm the corporate
secretary and privacy officer.
And I look at things in manydifferent ways, but particularly
when it gets to physiciancontracts, the regulatory side
and making sure that ourcontracts, besides being good
(01:06):
contracts, comply with legalissues and keep us safe from
compliance risk.
I've been here about 30 yearsand you see behind me, I
collected a lot of informationand books and binders over 30
years of being here.
SPEAKER_03 (01:20):
And I've asked him this question before, but he has
read everything in thatbookshelf behind him.
Maybe not recently, but you haveread it.
At
SPEAKER_02 (01:27):
least once.
At least once.
SPEAKER_03 (01:29):
All right.
Well, so today, like we said,we're exploring a pretty
challenging topic, one thatalmost every health system or
hospital faces at one point oranother.
How to recruit physicians, andnot just physicians, I should
say providers, APPs are beinghotly recruited as well, in a
very competitive, tough market,while also following strict
guidelines that seem to bechanging day in and day out.
SPEAKER_01 (01:53):
Yeah, it's a tricky process.
I mean, we want to attractreally outstanding physicians to
our organization.
But at the same time, even forus, we're a rural area, so
perhaps it's even a littletrickier in our recruitment.
But the number of perks andwhat's generous or what's
creative, it seems to beescalating almost every year
(02:14):
right now.
And you have to look at the redflags to make sure that you're
not going to step off into theabyss.
SPEAKER_03 (02:22):
Yeah, I'm glad you said that too, Bruce.
I think we're going to talkabout it a little bit later, but
you mentioned rural markets.
Every market is so different.
You can't just take every marketand put them in one bucket and
hope that it's aone-size-fits-all.
It's just not anymore.
And especially with physicianshortages, rising compensation,
we see the benchmark data everyyear.
(02:44):
I think it's more of an anomalyif compensation I don't know
that I've seen that recently atall.
So there's lots more pressure toput out compelling offers to get
these providers in the door.
SPEAKER_01 (02:57):
Yeah, you're absolutely right.
We have a team of folks that areinvolved.
We have recruiters who areinvolved.
We have administrators.
We have a chief medical officer.
So we have a lot of peopleinvolved.
And they all have their ownopinion about what is exactly
needed to recruit.
And we meet about that and tryto get standardization but we
(03:17):
have to review it from time totime.
And I will say, I have a sonwho's finishing up a fellowship
and I have the opportunity tohelp negotiate his contract from
the other side.
And he's in an urban area andit's slightly different.
And I've also, as a courtesy,helped some of his colleagues
and the residency look at it.
And most of those are urbanareas and they vary from urban
(03:40):
area to urban area.
SPEAKER_03 (03:42):
That is really nice that you do that for your son.
That's super helpful.
I never I never
SPEAKER_01 (03:48):
get paid for it.
Maybe I have to stop picking upthe tab that means all to you.
SPEAKER_03 (03:54):
Yeah.
So, you know, Bruce alluded toit as well.
It's not just, you know, Bruceand I are talking right now and
we're actually working on acouple of projects together.
It's not just the legal team andthe consultant and the provider
that involved.
It can be the F&B team, thedifferent members of the
C-suite, the CFO, compliance.
Everyone has a voice.
(04:14):
And so there's lots of peopleyou have to cater or two in the
room.
So just to set the stage alittle bit before we start this
podcast, let's just talk aboutthe market backdrop just a
little bit.
So as we alluded to, there's theshortages across a number of
specialties.
Obviously, surgical-basedspecialties are always top of
the list.
(04:34):
Primary care, psychiatry,behavioral health, those types
of things.
And I know we've said thisalready, but competition really
is intense across all of thesespecialties.
I did want to read a quickstatistic I saw that I thought
was interesting.
Some specialties have seenincreases in compensation by up
to 10 to 12% in the last twoyears alone, which is wild.
SPEAKER_01 (04:59):
Wow, that is.
And although we don't employradiologists, we're asked for
recruitment assistance.
And apparently, we found outthat radiologists, there
apparently are, for everyradiologist, there are five
opportunities right now.
And that is driven in part bytechnology because a lot of
(05:19):
residents are like, I don't wantto go to radiology if AI is
going to go ahead and kind ofsupplant it or reduce it.
So a lot of radiology residentscoming out and it's causing a
real shortage in radiology plusthey can work elsewhere.
So technology is also having animpact on some of these
specialties.
SPEAKER_03 (05:40):
Yeah.
The other thing that I'll saytoo is since you mentioned
radiology, that is actually oneof the top specialties we've
seen You know, we aretraditionally asked to look at
things when things get a littlemore challenging, where the
compensation is a little higherthan the run of the mill.
So we see those, we always kindof step back and see which
(06:00):
specialties are we taking noteof the most.
And radiology has been top ofthat list this year.
In fact, we've also seen becauseof reimbursement pressures,
which is a whole nother podcast,the increase in the number of
radiology groups that are askingfor stipends.
hospitals and health systems.
SPEAKER_01 (06:19):
Yes.
And, you know, while we'retalking about all these other
changes, the regulations reallyhaven't changed greatly over the
past, say, 20 years.
I mean, you have the STARTregulations, you have the
anti-kickback statute.
And for us, which I think a lotof people forget, we also have
the, as a not-for-profitorganization, you have to also
(06:40):
look at excess compensationissues and making sure, and I
recall, again, that's how longI've been doing this.
A long time ago, HermanHospital, as it used to be
called, had an arrangement, theHerman Hospital agreement,
relative to the IRS looking atwhat they paid physicians who
(07:00):
they recruited.
It's an old arrangement or aletter, and if one can find it,
it's interesting to look at.
SPEAKER_03 (07:07):
Yeah, I'm glad you brought that up again, Bruce,
because I feel like so muchfocus is always on fair market
value, or sorry, the Stark Law,anti-capex sometimes those IRS
regulations kind of get stuckunder the rug and maybe aren't
the main point of focus, butthey're equally as important if
you're a nonprofit organization.
(07:27):
I know we've talked aboutreimbursement shortages and all
that, but I'd be remiss if Ididn't miss COVID.
I know that was a while ago now,but we're still feeling the, you
know, the remnants of it,whether it's through physicians
that are wanting to retire earlyor others that are moving to
more locum tenens work orpart-time work.
So that's also added to thenumber of, the decrease in the
(07:49):
number of physicians that areavailable to provide services
for health systems.
SPEAKER_01 (07:55):
Yeah, Kate, you may have seen, we've seen that some
physicians will state to us,well, you know, I can go work
local tenants and make moremoney and work less hours.
Now there are trade-offs doingthat, but that's one of the
tactics that we've heard from,I'm not sure if you've heard
that from your client.
SPEAKER_03 (08:13):
Yeah, and one thing to think about with that too is,
especially when we hear thatargument from physicians, we
always want to make sure that wesee the locum tenens competitive
offer because otherwise it'sjust hearsay.
We need to have documentation ofwhat else has been offered on
the table before we can takethat to the bank, so to speak.
(08:34):
And the other thing I'll say isthat locum tenens organizations
also stack a lot of otherexpenses on top of that rate.
And we just want to make surethe physician is interpreting
correctly the actual rate thatthey're going to take home and
not the piece
SPEAKER_01 (08:48):
that they're
SPEAKER_03 (08:48):
looking for.
Exactly.
SPEAKER_01 (08:49):
Absolutely.
Absolutely.
And one of the, you know, one ofthe issues that keeps being
brought up to me as well, aphysician we're recruiting says
that they can get, they can get,I'm just throwing a number out
there.
It's not necessarily what they,they get a hundred, 150,$200,000
signing bonus and theserelocation packages and other
(09:11):
perks that I always take theposition that you have to take
those monies and you You have toadd them to the compensation to
determine the fair market valueof what will you're
compensating.
They're not separate items thatdon't get included in the
compensation analysis of fairmarket value and reasonableness.
SPEAKER_03 (09:32):
Yep, totally agree.
And buyout provisions is in thesame boat.
We've got a lot of clients whoare physicians who are in
private practice or are also ina competitive health system and
they have a buyout clause.
that that is dollars that thenew hospital is paying to the
old hospital to get thephysician over here.
(09:54):
And whether or not the physicianever sees those dollars, they
would have had to pay itotherwise.
So all of that has to beconsidered.
Yeah, so there's constanttension here with all these
factors.
And so to win the physician'ssignature, you really have to
make sure that you're keeping aneye out on regulatory updates as
they come in, and also these newcreative recruitment you're
(10:17):
talking about, you really needto think through those and make
sure you're assessing thosecorrectly before you just put
them on the table to thephysician.
SPEAKER_01 (10:24):
Kate, we have a minute since this is really
something I try to explaininternally to what I call my
internal clients, which would bepart of our CEO or COO and
others.
But a lot of folks say, well,that's fair market value.
But what really is fair marketvalue and what is it relative to
(10:48):
other physicians make in similarmarkets.
Could you explain how you lookat that from your standpoint?
SPEAKER_03 (10:55):
Yeah, there's a lot of different ways we look at
fair market value, and it's botha qualitative and a quantitative
assessment.
I always say no, neither ofthose is more or less important
than the other.
Both are needed to tell thestory there.
We're going to look at benchmarkdata, of course.
No valuation firm is not goingto look at benchmark data, and
(11:15):
it's often a sorry point forhealth systems as well when
they're starting negotiations.
But we also want to get ageneral understanding of what's
going on in that specificmarket.
Those market dynamics is one ofthe most important pieces that
we can understand as evaluators.
What is recruitment andretention like for your
organization?
How many other providers in thespecialty do you have in this
(11:37):
market?
How far would a patient have todrive if this provider wasn't
here?
Are you sacrificing quality ifyou go with someone else, or is
it more expensive for We couldask all those questions, but we
look at really the full packageof everything that we can get
before we settle on a rate.
And to me, broadly speaking,that's how I look at fair market
value.
SPEAKER_01 (11:57):
So fair market value, occasionally I've run
into a candidate who says, well,I can receive an offer and it's
$700,000.
Forget the specialty, I'm justmaking up a number.
But it's in Los Angeles,California.
In Tupelo, Mississippi, the costof living is extremely less,
(12:20):
although we are a rural area andwe have to sometimes dig hard to
get candidates who want to livein a rural area.
Tupelo is great, by the way.
But do you look and see, dogeographic locations play any
role in this?
SPEAKER_03 (12:36):
Absolutely.
When we serve clients out inCalifornia, there are specific
locations where we do applygeographic adjustments based on
our evaluation not regionalbenchmark data.
I want to clarify that.
We look at specific marketdynamics such as cost of living
and cost of salary information.
We have other benchmark datasets that we look at that help
(12:59):
us figure out what the varianceis and that compensation
differential for that market.
So we'll look at all of thosepieces.
We try and, you know, regionalbenchmark data is good to look
at.
You know, we're always going totake it into consideration.
But obviously, the number ofends is much lower than for
(13:20):
national data.
And because there's a smalleramount of ends, there's more
potential for that data set tobe skewed.
And then you've also got, forexample, an area like Clinton,
Tennessee, where I grew up,population 10,000, in the same
benchmark data as Miami,Florida.
So it can be a little bit morenuanced, and those types of
things can't get covered up justbecause of the small data set.
SPEAKER_01 (13:45):
Thank you.
you ever come across when you'redealing with clients who say,
for instance, well, we want torecruit this orthopedic surgeon.
If we recruit him, yeah, it'sgoing to cost a lot of money,
but he's going to generate thisamount in fees for all the
surgeries he performs.
And how do you respond to that?
SPEAKER_03 (14:05):
Well, I first want to make sure I would immediately
call Bruce on the phone and tellhim that one of his colleagues
put that in an email and itneeds to be deleted immediately.
I listened to a webinar a longtime ago that I just loved and
I've repeated it constantly.
But one of the presenters said,you know, I want my clients to
(14:25):
hope and pray that they getreferrals all day long, but just
don't write it down or repeat itor say it to anyone out loud.
So, yeah, that needs to be outof the picture.
But that also kind of brings inthe commercial reasonableness
aspect of this discussion.
You know, you need to make surethat it makes sense outside of
(14:45):
the fact that it's going togenerate referrals for your
organization.
Do you actually need to pay,whether it's a neurosurgeon, an
orthopedic surgeon, that amountof money?
Is the demand there?
And maybe the demand's notthere, but you need to be able
to tell the story, well, we wantthe demand to be there, right?
We anticipate creating a betterquality of care, an easier
location for patients to get to.
(15:07):
So the demand's not there now,but we feel like it's going to
grow and be there if we bringthis physician in.
So just be able to tell thosetypes of stories, I think, will
help that that referral argumentgo away just a little bit.
SPEAKER_01 (15:19):
So from a commercial, reasonable
standpoint, it is part of thestory, though, to tell, and
again, it varies from locationto location, but from ours, it's
really commercial and reasonablewhere you have shortages, and
we're a healthcare professionalshortage area to say, hey, look,
we have documented informationthat says we have, you know,
(15:40):
we're short 10 orthopedicsurgeons, and there's a wait
time to get to see an orthopedicsurgeon.
that doesn't even take intoaccount what referrals they may
or may not generate but it'sdealing with is that part of
your mission and are youfulfilling your mission by going
ahead and providing the serviceto the community
SPEAKER_03 (16:00):
yep exactly and you can find all that usually as you
know in the sort of a communityhealth needs assessment or
sometimes organizations get aphysician health a physician
needs assessment which helpsthem figure out you know is
there a shortage of differentspecialties in their market all
of that information is going tobe great to have on file and
document for sure.
SPEAKER_01 (16:20):
You may see a lot of different mistakes that some
organizations make.
I hope they don't.
But one that we don't, I believewe don't, and if I find somebody
doing it, I tried to squash themlike a bug, is trying to make a
promise to a physician that isoutside of our contract.
(16:43):
And I remind everyone, no,everything has to be reduced to
writing not only their salaryand their benefits but the
signing bonuses in particularand other perks have to all be
included in that writing and andone of the demands now and i
think we mentioned signingbonuses before though physicians
(17:04):
being recruited want want moneyyou know i want my money when i
sign my contract right and wetake perhaps a conservative
approach it's like okay we'llpay you half the money of your
signing bonus the other half youget when you show up to work in
so many days.
But the half we give you, it'ssecured by a promissory note
(17:25):
that we'll execute on.
I mean, do you recommend that toyour clients or not?
SPEAKER_03 (17:30):
Absolutely.
A callback provision, similar asthe promissory note, just making
sure that there's something inplace that can protect the
hospital should the physiciandecide to go a different route,
even midway through thecontract.
It really, it helps kind of sealthe deal.
I am interested though, Bruce,what other types of mistakes
(17:53):
have you seen over your careerin these contracts with
providers?
SPEAKER_01 (17:58):
Well, you know, it gets into a little bit of the
perk side as far as time off.
I think one of the things nowwe're seeing is how much time
off a lot of physicians, youngerphysicians, you know, maybe I'm
old school and I'm the guysaying, you know, off my lawn
wagging my finger.
(18:18):
But they're looking at lifestylein part as much as financial
aspects.
And so I've found a couple oftimes where some administrators
said, well, yeah, we're onlygoing to give you four weeks of
vacation when you show up, butdon't worry about it.
If you want to take any time offyou want.
And it's trying to go around orwe'll give you a, it's not in
(18:43):
the contract, but we'll give youa medical directorship
physician.
And so we're going to add$50,000to a medical directorship.
It's not in the contract.
It's nowhere promised.
And the physician shows up andsays, I was promised a medical
directorship.
SPEAKER_02 (18:58):
And
SPEAKER_01 (18:59):
so those are a couple of it.
I try to, as best I can, toprevent that by educating our
administrators about it.
And for instance, medicaldirectorship, unless it's
required by regulation, it'shard for me to justify it.
So
SPEAKER_03 (19:16):
yeah, I totally agree.
And as part of my practice inthis area, over the years, I
learned from others above me toread those contracts.
I'm not a lawyer, but I learn alot from reading those contracts
based on the things that peoplelike you, Bruce, pay attention
to and have seen people mademistakes on before.
(19:38):
So it really helps me read thoseand make sure that I advise
other clients in a similarfashion.
One
SPEAKER_01 (19:45):
more point on loans.
This is just my thought process.
So as there's been changes inthe Trump administration,
they're capping the amount ofmoney, and it includes medical
students, that can occurrelative to loans.
UNKNOWN (20:06):
Right.
SPEAKER_01 (20:06):
I think you're going to have students perhaps coming
in with more debt.
And it may result in some ofthem truly having a need for
monies as quick as they can.
And that may mean things morestipend payments as they're
going through their residencybecause they incurred such a
(20:29):
large amount of debt in medicalschool.
SPEAKER_03 (20:32):
Yeah.
And that's another incentivethat we do see educational loan
reimbursement.
Candidly, I haven't seen it inthe arrangements I valued very,
very frequently over the lasttwo years.
I don't know if that's becausevaluation work, as I said, has
really shifted towardsorganizations reaching out to us
(20:55):
for more experience, highprofile physicians, or if it's
just that that trend is kind ofgoing away and getting replaced
with things like signingbonuses.
But absolutely, I mean, we'veseen those educational
educational loan reimbursementseasily into the six figures,
obviously, but as high as$455,000, it can get
significant.
SPEAKER_01 (21:16):
Okay, good.
Well, I guess we'll, let's talkabout reality.
SPEAKER_03 (21:21):
Yep.
So what we're seeing actually onthe ground, and this will get
fun because we talked about it alittle bit, some of our war
stories, if you want to call itthat.
But one of the things, as we'vesaid a couple of times, is that
signing bonuses have grownsignificantly in terms of
frequency, how often we'reseeing them involved in the
(21:42):
transaction, as well as thesize.
Like I said, loan repayment isalso super, super common,
especially for more juniorpositions.
Again, I don't see that quite asoften anymore.
I just think there's a trendmoving towards signing bonuses.
SPEAKER_01 (22:01):
And you probably see, because you look at more
contracts across a widerspectrum, I mean, I'm just
focused here on my health systemother than helping out my son
and his buddies.
But what other perks now aretrying to pop up, you know, like
whack-a-mole?
SPEAKER_03 (22:19):
Yeah, it's, you know, we get asked that question
a lot.
You know, what are some morecreative recruitment incentives
that we've seen beyond yoursign-on bonuses?
And some of them are non-cash,you know, child care, reduced
works schedule, that's anincreasingly popular one.
(22:40):
And then, you know, housingallowances, I know that is cash,
but that's another example I'veseen pop up a lot, especially in
the Hawaii market.
But the challenge is how do youvalue all of these fairly when
you put them next to each other,especially when you've got these
non-cash related perks?
SPEAKER_01 (23:02):
Yeah, I guess that's hard to value.
I mean, when you hire someonefull-time time, which roughly, I
mean, physicians, a lot of themdo work a lot of hours, and
we're grateful for that here,but if you're hiring them, and
particularly if they go more toan office practice as opposed to
a hospital-based practice, youexpect our non-physician
(23:23):
employees, 2,080 hours asfull-time employee, and they
have more weeks off or vacation,and now they're truly working
1,800 hours, so So how do youvalue that?
Do you take the salary and lookat it differently when they're
working 1,800 hours versus whenthey're working over 2,000
(23:46):
hours?
SPEAKER_03 (23:48):
Yeah, we do.
We have to right-size thoseagainst what the market
expectation is versus what it'sgoing to be under this
agreement.
Obviously, we can't make acomparison to something that is
not consistent with the market.
So we do have to make someadjustments to account for
those.
But it is becoming increasinglycommon.
You know, it goes withoutsaying, too, survey data lags
(24:09):
behind, depending on whichsurvey you're using, anywhere
from a year to a year and ahalf, maybe even two years.
I'm not totally sure.
But it's, you know, it cancreate a little bit of a lag.
And so we often have physiciansthat ask about that just to make
sure that the data that we'reusing in our assessment is the
latest and greatest and fair atthe end of the day, based on
(24:31):
what's going on in the market inactuality.
SPEAKER_01 (24:36):
Yeah, well, you're overpaying.
Not only you're overpaying, butyou create a compliance risk.
You underpay, you lose thecandidate.
Sounds a little bit likefootball in NIL.
SPEAKER_03 (24:46):
Yeah, no kidding.
That's additionally a wholeother podcast that we could
start on that topic.
But yeah, creative structures, Ithink, help in these
discussions.
I always encourage quality to bea part of the discussion,
depending on the house systemand where arrangements are with
(25:08):
the provider that may or may notbe something that'll work right
off the bat.
But I do think it offers alittle bit of help on both sides
of the fence if you canincorporate that quality
component because you're helpingthat provider improve the
quality of care that's beingprovided, but also helping the
(25:29):
health system and the patientsat the same time.
But yeah, we're seeing justincredibly creative offers going
to across the table.
But that gets us to this point.
How do we help organizationsbridge that gap between these
competitive, very creativeoffers and recruitment
incentives and compliance, whichgets to Bruce's cup of tea?
SPEAKER_01 (25:53):
Yeah, and I get involved.
I like to get involved early.
Like I said, part of it issetting up within your
organization.
If you're not in-house, ifyou're outside, if you're
involved in it, getting involvedearly and seeing it Now I'm very
hands-on here.
So I draft all the physiciancontracts.
Other places are different.
You've seen one in-house office.
(26:15):
You've seen one.
And I think it's important toget all the data you can.
And that includes, you know, themarket data, which you all have
and various market data in thebusiness case that we talked
about.
And occasionally somebody wouldsay, well, they have an offer
from so-and-so for this.
And I'm like, and it doesn'tmake sense.
I'm like, okay, well, If they'rewilling to share the offer with
(26:38):
the actual document, I'll lookat it.
It's another piece of evidencethat I'll look at and consider.
You're
SPEAKER_03 (26:45):
absolutely right.
I'm so glad you said thatbecause just like you, we hear
that all the time.
I can appreciate that there'scompetitive offers out there,
but I can't take that to courtif this arrangement ever gets
SPEAKER_01 (26:59):
looked at.
Base value that they say on anemail, this is what I got.
Okay, well, let me see theproof.
SPEAKER_03 (27:07):
Yep.
And I also want to make surethat, you know, what the numbers
we're throwing on the table, thedetail behind those numbers
aligns with the detail behindthe numbers on the competitive
offer.
You know, maybe what I'mthrowing out includes a
part-time admin role and whatthey're throwing out is
full-time clinical role.
You know, maybe that's whythere's a discrepancy there.
(27:27):
So it's always good to checkthose numbers.
And same thing here.
We always prefer to get involvedearly.
You know, it does happen and youknow, through no fault of anyone
that, you know, you've got toget a specialty physician in the
door and things have to happenquickly.
And sometimes we get engagedafter the fact.
That happens.
Obviously, the preferred is thatwe can get involved earlier and
(27:50):
see where the numbers are andhelp them make sure that they're
compliant.
But as you are experienced, too,sometimes you just have to be
flexible.
SPEAKER_01 (27:57):
You do.
You have to look and it's anever-changing marketplace.
So, you know, we talked aboutthe non-cash benefits.
But we also go ahead and makesure that we document this.
Now, from our standpoint,fortunately, I think we moved a
(28:17):
little further.
So we have an electronicdocumentation system for
contracts.
And so all that has to besubmitted.
So we retain that in the eventthat we ever were to have
scrutiny from our governmentagency, it would be easy to lay
our hands on it instead of anexchange of information.
And that just disappears intoether.
(28:39):
We want all those documents tobe in one place to support the
fair market value, thecommercial reasonableness, as
well as why you actually did it.
SPEAKER_03 (28:51):
Yeah, totally agree.
The more documentation, thebetter, which I recognize for
some health systems is hard toacquire.
It can be difficult to get allthe information from all the
different parties.
But it really does tell thatstory.
And at the end of the day, Iknow what's going to matter is
that you did everything youcould to get that information to
(29:11):
tell that story.
Especially you mentionedcommercial reasonableness.
That's really where you get themajority of the qualitative
information.
Especially having thatdocumented is important and
having that in your files to beable to pull up and say this is
the situation at the time.
This is why we felt the need tohave to put this forward.
We looked at everything.
(29:31):
We looked at other potentialopportunities.
Nothing worked out this is ourbest avenue.
And that's exactly what thegovernment's going to be looking
for.
SPEAKER_01 (29:39):
Now, we moved, you know, we talked a lot about, you
know, here's a salary, here'swhat we're going to pay you.
And another component of that,though, is not just the base
salary, it's WRVU, tiered WRVUpayment.
And we put that in there.
But I think you also were movingtoward almost all of our
(30:01):
contracts now have a qualitycomponent.
SPEAKER_02 (30:04):
Nice.
Yeah.
SPEAKER_01 (30:05):
And the quality component is for some, not all
of our contracts, actually partof it is a withhold that you
have to meet a certain tier ofthe quality to earn back say 10%
of your base.
Or you have to meet this qualityin order to qualify to get
WRVUs.
And then there's a bonus kickerif you have exceedingly good
(30:29):
quality, which we hope they alldo.
So we don't just want physiciansto have contracts that are laden
with just churn WRVUs, churnWRVUs because that creates other
issues and other compliancerisks and quality issues too.
SPEAKER_03 (30:46):
100%.
And I think quality can betricky too because it does
involve both parties, right?
You want the physicians that aregoing to be working to meet
these metrics involved in thedecision process because they're
the ones, boots on the ground,they know what needs to be
corrected and and fixed andimproved, et cetera, whatever it
(31:07):
may be.
And then you have to haveleadership involved too, because
sometimes there's cost reductionmeasures that you're trying to
achieve as well.
So it can be a difficultconversation to have to figure
out what those metrics need tobe, what the thresholds need to
be.
You know, as you said, is it awithhold?
Is it an in addition to, youknow, each of those have pros
(31:28):
and cons to them from thephysician side and from the
hospital side, there's upsideand downside risk can go a lot
of different ways.
But at the end of the day, Ithink what we hope for is that
there is that quality componentin there, but that those quality
metrics actually have teeth.
I love to see quality metrics,but what I don't love is when I
ask for a data request and I getthe historical performance back.
(31:52):
And for the last year and ahalf, I've seen 100%.
And so my question is, well, whyhasn't this been changed yet
after the second month orsomething like that?
Again, it's hardadministratively, though, to
update that and keep track ofit.
So I
SPEAKER_01 (32:06):
can appreciate that as well.
It can't just be a layup.
It can't be an easy thing toget.
They've got to really show thatthey've earned it by providing
outstanding quality.
And we care to make sure.
It's not all or nothing becauseif it's too hard, you discourage
the physician from even trying.
SPEAKER_03 (32:24):
Yep, exactly.
SPEAKER_01 (32:25):
You have to work through that.
It's something that's extremelyimportant From our standpoint,
to continue to recruit, I mean,we end up recruiting upwards in
the neighborhood about 30different positions a year.
So it's an ongoing process.
(32:47):
And it's changed from the firstyear I arrived to now.
And what do you really see ifyou were to go ahead and say,
navigating today, how we goahead and try to balance all
this?
SPEAKER_03 (33:06):
Being flexible, I think, is number one.
I think number two is makingsure you're continuing to have
conversations with differenthealth systems across the board.
This is from an evaluationperspective, obviously, to make
sure that you're ears to theground in terms of what's going
on, how different health systemsare assessing the risk that
(33:29):
comes with some of theseincentives and these pay
packages.
Sometimes it just takes adifferent health systems
perspective for you to changeyour mind on an approach.
I also think we have to have alittle bit of grace sometimes
with regards to regulation.
There's so many changes andthere's so many things to
consider.
(33:49):
You just have to sometimes stepback, recognize there's gonna be
some missteps, but it's also howyou take corrective action when
those missteps occur.
There's so much to be payingattention to.
I think we'd be silly to thinkthat there aren't mistakes out
there with arrangements withproviders.
It's just that we have to figureout how to correct them and
mitigate them going forward.
SPEAKER_01 (34:11):
Yes.
I mean, so we have shortages ofphysicians.
We have, in some areas, Medicaidpotentially in many states,
payments being reduced.
And then we have Medicare goingahead and really starting to
push more bundle payments.
So there's a lot to figure outof what you have available to
(34:32):
compensate these physicians for.
SPEAKER_03 (34:34):
It's a lot.
It's a lot to consider.
consider and you just have tosurround yourself with, make
sure you're not the smartestperson in the room is what I've
SPEAKER_02 (34:44):
heard before.
I don't have to worry aboutthat.
SPEAKER_03 (34:47):
Yeah, there's a lot going on.
It's hard to keep up with itall.
It is.
So that's what I mean when youjust have to kind of show a
little bit of grace to itbecause there's just, it is so
hard.
It's a lot to get through andwade through for sure.
SPEAKER_01 (35:04):
Well, I'm glad we had this time to discuss this.
I mean, we discussed it before,and it's an area that I think is
just, for now, particularly aswe have shortages of physicians,
going to continue.
And not to even mention, youknow, in our area, because we're
rural, we have a significantnumber of foreign medical grads,
(35:26):
which also adds anothercomplexity to it.
Because the regulations withthat, you know, you have to have
certain pay measures that are atleast equal to what the median
rate would be.
And usually, they have to behere three years.
(35:48):
And the government prevents youfrom putting in certain
provisions in the contract thatyou normally would put in.
So there are complexities thatyou have to constantly look at.
But with help from you andothers, hopefully we'll make it
through.
SPEAKER_03 (36:05):
Yeah, I think so, yeah.
I think we will.
Bruce and I are in the weeds onthese issues.
We're always happy to pick upthe phone and talk through it.
So we appreciate you listeningto this discussion on this super
complicated and hot topic.
SPEAKER_01 (36:20):
So hope you enjoy it, including my bad jokes.
And I look forward to talking
SPEAKER_02 (36:29):
again, Kate.
SPEAKER_01 (36:31):
Yeah, that's right.
That's right.
Yeah.
You have someone to look at acontract for free because
they're a resident you know i'ma guy because i didn't seem to
do that too much for my son andhis friends but um uh it's been
great and thank you uh for doingthis with me i really enjoy it
SPEAKER_03 (36:49):
yeah absolutely thanks everyone
SPEAKER_01 (36:51):
thank you
SPEAKER_00 (36:58):
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(37:21):
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UNKNOWN (37:28):
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SPEAKER_03 (00:17):
Hello, everyone, and welcome to Regulations versus
Recruitment, Crafting CompliantCompetitive Offers.
I'm Kate Taylor, and I'm anassociate principal at ECG
Management Consultants.
I spend a significant amount oftime working on physician
compensation arrangements andget, I couldn't even tell you
how many phone calls fromclients about working through
(00:38):
physician arrangements anddealing with compensation
matters.
So I'm excited to talk to youabout this topic today.
Bruce?
SPEAKER_01 (00:44):
Yes, my name is Bruce Toppin.
I'm the chief legal officer atNorth Mississippi Health
services, a rural health caresystem based in Tupelo,
Mississippi.
I'm the chief, besides chieflegal officer, I'm the corporate
secretary and privacy officer.
And I look at things in manydifferent ways, but particularly
when it gets to physiciancontracts, the regulatory side
and making sure that ourcontracts, besides being good
(01:06):
contracts, comply with legalissues and keep us safe from
compliance risk.
I've been here about 30 yearsand you see behind me, I
collected a lot of informationand books and binders over 30
years of being here.
SPEAKER_03 (01:20):
And I've asked him this question before, but he has
read everything in thatbookshelf behind him.
Maybe not recently, but you haveread it.
At
SPEAKER_02 (01:27):
least once.
At least once.
SPEAKER_03 (01:29):
All right.
Well, so today, like we said,we're exploring a pretty
challenging topic, one thatalmost every health system or
hospital faces at one point oranother.
How to recruit physicians, andnot just physicians, I should
say providers, APPs are beinghotly recruited as well, in a
very competitive, tough market,while also following strict
guidelines that seem to bechanging day in and day out.
SPEAKER_01 (01:53):
Yeah, it's a tricky process.
I mean, we want to attractreally outstanding physicians to
our organization.
But at the same time, even forus, we're a rural area, so
perhaps it's even a littletrickier in our recruitment.
But the number of perks andwhat's generous or what's
creative, it seems to beescalating almost every year
(02:14):
right now.
And you have to look at the redflags to make sure that you're
not going to step off into theabyss.
SPEAKER_03 (02:22):
Yeah, I'm glad you said that too, Bruce.
I think we're going to talkabout it a little bit later, but
you mentioned rural markets.
Every market is so different.
You can't just take every marketand put them in one bucket and
hope that it's aone-size-fits-all.
It's just not anymore.
And especially with physicianshortages, rising compensation,
we see the benchmark data everyyear.
(02:44):
I think it's more of an anomalyif compensation I don't know
that I've seen that recently atall.
So there's lots more pressure toput out compelling offers to get
these providers in the door.
SPEAKER_01 (02:57):
Yeah, you're absolutely right.
We have a team of folks that areinvolved.
We have recruiters who areinvolved.
We have administrators.
We have a chief medical officer.
So we have a lot of peopleinvolved.
And they all have their ownopinion about what is exactly
needed to recruit.
And we meet about that and tryto get standardization but we
(03:17):
have to review it from time totime.
And I will say, I have a sonwho's finishing up a fellowship
and I have the opportunity tohelp negotiate his contract from
the other side.
And he's in an urban area andit's slightly different.
And I've also, as a courtesy,helped some of his colleagues
and the residency look at it.
And most of those are urbanareas and they vary from urban
(03:40):
area to urban area.
SPEAKER_03 (03:42):
That is really nice that you do that for your son.
That's super helpful.
I never I never
SPEAKER_01 (03:48):
get paid for it.
Maybe I have to stop picking upthe tab that means all to you.
SPEAKER_03 (03:54):
Yeah.
So, you know, Bruce alluded toit as well.
It's not just, you know, Bruceand I are talking right now and
we're actually working on acouple of projects together.
It's not just the legal team andthe consultant and the provider
that involved.
It can be the F&B team, thedifferent members of the
C-suite, the CFO, compliance.
Everyone has a voice.
(04:14):
And so there's lots of peopleyou have to cater or two in the
room.
So just to set the stage alittle bit before we start this
podcast, let's just talk aboutthe market backdrop just a
little bit.
So as we alluded to, there's theshortages across a number of
specialties.
Obviously, surgical-basedspecialties are always top of
the list.
(04:34):
Primary care, psychiatry,behavioral health, those types
of things.
And I know we've said thisalready, but competition really
is intense across all of thesespecialties.
I did want to read a quickstatistic I saw that I thought
was interesting.
Some specialties have seenincreases in compensation by up
to 10 to 12% in the last twoyears alone, which is wild.
SPEAKER_01 (04:59):
Wow, that is.
And although we don't employradiologists, we're asked for
recruitment assistance.
And apparently, we found outthat radiologists, there
apparently are, for everyradiologist, there are five
opportunities right now.
And that is driven in part bytechnology because a lot of
(05:19):
residents are like, I don't wantto go to radiology if AI is
going to go ahead and kind ofsupplant it or reduce it.
So a lot of radiology residentscoming out and it's causing a
real shortage in radiology plusthey can work elsewhere.
So technology is also having animpact on some of these
specialties.
SPEAKER_03 (05:40):
Yeah.
The other thing that I'll saytoo is since you mentioned
radiology, that is actually oneof the top specialties we've
seen You know, we aretraditionally asked to look at
things when things get a littlemore challenging, where the
compensation is a little higherthan the run of the mill.
So we see those, we always kindof step back and see which
(06:00):
specialties are we taking noteof the most.
And radiology has been top ofthat list this year.
In fact, we've also seen becauseof reimbursement pressures,
which is a whole nother podcast,the increase in the number of
radiology groups that are askingfor stipends.
hospitals and health systems.
SPEAKER_01 (06:19):
Yes.
And, you know, while we'retalking about all these other
changes, the regulations reallyhaven't changed greatly over the
past, say, 20 years.
I mean, you have the STARTregulations, you have the
anti-kickback statute.
And for us, which I think a lotof people forget, we also have
the, as a not-for-profitorganization, you have to also
(06:40):
look at excess compensationissues and making sure, and I
recall, again, that's how longI've been doing this.
A long time ago, HermanHospital, as it used to be
called, had an arrangement, theHerman Hospital agreement,
relative to the IRS looking atwhat they paid physicians who
(07:00):
they recruited.
It's an old arrangement or aletter, and if one can find it,
it's interesting to look at.
SPEAKER_03 (07:07):
Yeah, I'm glad you brought that up again, Bruce,
because I feel like so muchfocus is always on fair market
value, or sorry, the Stark Law,anti-capex sometimes those IRS
regulations kind of get stuckunder the rug and maybe aren't
the main point of focus, butthey're equally as important if
you're a nonprofit organization.
(07:27):
I know we've talked aboutreimbursement shortages and all
that, but I'd be remiss if Ididn't miss COVID.
I know that was a while ago now,but we're still feeling the, you
know, the remnants of it,whether it's through physicians
that are wanting to retire earlyor others that are moving to
more locum tenens work orpart-time work.
So that's also added to thenumber of, the decrease in the
(07:49):
number of physicians that areavailable to provide services
for health systems.
SPEAKER_01 (07:55):
Yeah, Kate, you may have seen, we've seen that some
physicians will state to us,well, you know, I can go work
local tenants and make moremoney and work less hours.
Now there are trade-offs doingthat, but that's one of the
tactics that we've heard from,I'm not sure if you've heard
that from your client.
SPEAKER_03 (08:13):
Yeah, and one thing to think about with that too is,
especially when we hear thatargument from physicians, we
always want to make sure that wesee the locum tenens competitive
offer because otherwise it'sjust hearsay.
We need to have documentation ofwhat else has been offered on
the table before we can takethat to the bank, so to speak.
(08:34):
And the other thing I'll say isthat locum tenens organizations
also stack a lot of otherexpenses on top of that rate.
And we just want to make surethe physician is interpreting
correctly the actual rate thatthey're going to take home and
not the piece
SPEAKER_01 (08:48):
that they're
SPEAKER_03 (08:48):
looking for.
Exactly.
SPEAKER_01 (08:49):
Absolutely.
Absolutely.
And one of the, you know, one ofthe issues that keeps being
brought up to me as well, aphysician we're recruiting says
that they can get, they can get,I'm just throwing a number out
there.
It's not necessarily what they,they get a hundred, 150,$200,000
signing bonus and theserelocation packages and other
(09:11):
perks that I always take theposition that you have to take
those monies and you You have toadd them to the compensation to
determine the fair market valueof what will you're
compensating.
They're not separate items thatdon't get included in the
compensation analysis of fairmarket value and reasonableness.
SPEAKER_03 (09:32):
Yep, totally agree.
And buyout provisions is in thesame boat.
We've got a lot of clients whoare physicians who are in
private practice or are also ina competitive health system and
they have a buyout clause.
that that is dollars that thenew hospital is paying to the
old hospital to get thephysician over here.
(09:54):
And whether or not the physicianever sees those dollars, they
would have had to pay itotherwise.
So all of that has to beconsidered.
Yeah, so there's constanttension here with all these
factors.
And so to win the physician'ssignature, you really have to
make sure that you're keeping aneye out on regulatory updates as
they come in, and also these newcreative recruitment you're
(10:17):
talking about, you really needto think through those and make
sure you're assessing thosecorrectly before you just put
them on the table to thephysician.
SPEAKER_01 (10:24):
Kate, we have a minute since this is really
something I try to explaininternally to what I call my
internal clients, which would bepart of our CEO or COO and
others.
But a lot of folks say, well,that's fair market value.
But what really is fair marketvalue and what is it relative to
(10:48):
other physicians make in similarmarkets.
Could you explain how you lookat that from your standpoint?
SPEAKER_03 (10:55):
Yeah, there's a lot of different ways we look at
fair market value, and it's botha qualitative and a quantitative
assessment.
I always say no, neither ofthose is more or less important
than the other.
Both are needed to tell thestory there.
We're going to look at benchmarkdata, of course.
No valuation firm is not goingto look at benchmark data, and
(11:15):
it's often a sorry point forhealth systems as well when
they're starting negotiations.
But we also want to get ageneral understanding of what's
going on in that specificmarket.
Those market dynamics is one ofthe most important pieces that
we can understand as evaluators.
What is recruitment andretention like for your
organization?
How many other providers in thespecialty do you have in this
(11:37):
market?
How far would a patient have todrive if this provider wasn't
here?
Are you sacrificing quality ifyou go with someone else, or is
it more expensive for We couldask all those questions, but we
look at really the full packageof everything that we can get
before we settle on a rate.
And to me, broadly speaking,that's how I look at fair market
value.
SPEAKER_01 (11:57):
So fair market value, occasionally I've run
into a candidate who says, well,I can receive an offer and it's
$700,000.
Forget the specialty, I'm justmaking up a number.
But it's in Los Angeles,California.
In Tupelo, Mississippi, the costof living is extremely less,
(12:20):
although we are a rural area andwe have to sometimes dig hard to
get candidates who want to livein a rural area.
Tupelo is great, by the way.
But do you look and see, dogeographic locations play any
role in this?
SPEAKER_03 (12:36):
Absolutely.
When we serve clients out inCalifornia, there are specific
locations where we do applygeographic adjustments based on
our evaluation not regionalbenchmark data.
I want to clarify that.
We look at specific marketdynamics such as cost of living
and cost of salary information.
We have other benchmark datasets that we look at that help
(12:59):
us figure out what the varianceis and that compensation
differential for that market.
So we'll look at all of thosepieces.
We try and, you know, regionalbenchmark data is good to look
at.
You know, we're always going totake it into consideration.
But obviously, the number ofends is much lower than for
(13:20):
national data.
And because there's a smalleramount of ends, there's more
potential for that data set tobe skewed.
And then you've also got, forexample, an area like Clinton,
Tennessee, where I grew up,population 10,000, in the same
benchmark data as Miami,Florida.
So it can be a little bit morenuanced, and those types of
things can't get covered up justbecause of the small data set.
SPEAKER_01 (13:45):
Thank you.
you ever come across when you'redealing with clients who say,
for instance, well, we want torecruit this orthopedic surgeon.
If we recruit him, yeah, it'sgoing to cost a lot of money,
but he's going to generate thisamount in fees for all the
surgeries he performs.
And how do you respond to that?
SPEAKER_03 (14:05):
Well, I first want to make sure I would immediately
call Bruce on the phone and tellhim that one of his colleagues
put that in an email and itneeds to be deleted immediately.
I listened to a webinar a longtime ago that I just loved and
I've repeated it constantly.
But one of the presenters said,you know, I want my clients to
(14:25):
hope and pray that they getreferrals all day long, but just
don't write it down or repeat itor say it to anyone out loud.
So, yeah, that needs to be outof the picture.
But that also kind of brings inthe commercial reasonableness
aspect of this discussion.
You know, you need to make surethat it makes sense outside of
(14:45):
the fact that it's going togenerate referrals for your
organization.
Do you actually need to pay,whether it's a neurosurgeon, an
orthopedic surgeon, that amountof money?
Is the demand there?
And maybe the demand's notthere, but you need to be able
to tell the story, well, we wantthe demand to be there, right?
We anticipate creating a betterquality of care, an easier
location for patients to get to.
(15:07):
So the demand's not there now,but we feel like it's going to
grow and be there if we bringthis physician in.
So just be able to tell thosetypes of stories, I think, will
help that that referral argumentgo away just a little bit.
SPEAKER_01 (15:19):
So from a commercial, reasonable
standpoint, it is part of thestory, though, to tell, and
again, it varies from locationto location, but from ours, it's
really commercial and reasonablewhere you have shortages, and
we're a healthcare professionalshortage area to say, hey, look,
we have documented informationthat says we have, you know,
(15:40):
we're short 10 orthopedicsurgeons, and there's a wait
time to get to see an orthopedicsurgeon.
that doesn't even take intoaccount what referrals they may
or may not generate but it'sdealing with is that part of
your mission and are youfulfilling your mission by going
ahead and providing the serviceto the community
SPEAKER_03 (16:00):
yep exactly and you can find all that usually as you
know in the sort of a communityhealth needs assessment or
sometimes organizations get aphysician health a physician
needs assessment which helpsthem figure out you know is
there a shortage of differentspecialties in their market all
of that information is going tobe great to have on file and
document for sure.
SPEAKER_01 (16:20):
You may see a lot of different mistakes that some
organizations make.
I hope they don't.
But one that we don't, I believewe don't, and if I find somebody
doing it, I tried to squash themlike a bug, is trying to make a
promise to a physician that isoutside of our contract.
(16:43):
And I remind everyone, no,everything has to be reduced to
writing not only their salaryand their benefits but the
signing bonuses in particularand other perks have to all be
included in that writing and andone of the demands now and i
think we mentioned signingbonuses before though physicians
(17:04):
being recruited want want moneyyou know i want my money when i
sign my contract right and wetake perhaps a conservative
approach it's like okay we'llpay you half the money of your
signing bonus the other half youget when you show up to work in
so many days.
But the half we give you, it'ssecured by a promissory note
(17:25):
that we'll execute on.
I mean, do you recommend that toyour clients or not?
SPEAKER_03 (17:30):
Absolutely.
A callback provision, similar asthe promissory note, just making
sure that there's something inplace that can protect the
hospital should the physiciandecide to go a different route,
even midway through thecontract.
It really, it helps kind of sealthe deal.
I am interested though, Bruce,what other types of mistakes
(17:53):
have you seen over your careerin these contracts with
providers?
SPEAKER_01 (17:58):
Well, you know, it gets into a little bit of the
perk side as far as time off.
I think one of the things nowwe're seeing is how much time
off a lot of physicians, youngerphysicians, you know, maybe I'm
old school and I'm the guysaying, you know, off my lawn
wagging my finger.
(18:18):
But they're looking at lifestylein part as much as financial
aspects.
And so I've found a couple oftimes where some administrators
said, well, yeah, we're onlygoing to give you four weeks of
vacation when you show up, butdon't worry about it.
If you want to take any time offyou want.
And it's trying to go around orwe'll give you a, it's not in
(18:43):
the contract, but we'll give youa medical directorship
physician.
And so we're going to add$50,000to a medical directorship.
It's not in the contract.
It's nowhere promised.
And the physician shows up andsays, I was promised a medical
directorship.
SPEAKER_02 (18:58):
And
SPEAKER_01 (18:59):
so those are a couple of it.
I try to, as best I can, toprevent that by educating our
administrators about it.
And for instance, medicaldirectorship, unless it's
required by regulation, it'shard for me to justify it.
So
SPEAKER_03 (19:16):
yeah, I totally agree.
And as part of my practice inthis area, over the years, I
learned from others above me toread those contracts.
I'm not a lawyer, but I learn alot from reading those contracts
based on the things that peoplelike you, Bruce, pay attention
to and have seen people mademistakes on before.
(19:38):
So it really helps me read thoseand make sure that I advise
other clients in a similarfashion.
One
SPEAKER_01 (19:45):
more point on loans.
This is just my thought process.
So as there's been changes inthe Trump administration,
they're capping the amount ofmoney, and it includes medical
students, that can occurrelative to loans.
UNKNOWN (20:06):
Right.
SPEAKER_01 (20:06):
I think you're going to have students perhaps coming
in with more debt.
And it may result in some ofthem truly having a need for
monies as quick as they can.
And that may mean things morestipend payments as they're
going through their residencybecause they incurred such a
(20:29):
large amount of debt in medicalschool.
SPEAKER_03 (20:32):
Yeah.
And that's another incentivethat we do see educational loan
reimbursement.
Candidly, I haven't seen it inthe arrangements I valued very,
very frequently over the lasttwo years.
I don't know if that's becausevaluation work, as I said, has
really shifted towardsorganizations reaching out to us
(20:55):
for more experience, highprofile physicians, or if it's
just that that trend is kind ofgoing away and getting replaced
with things like signingbonuses.
But absolutely, I mean, we'veseen those educational
educational loan reimbursementseasily into the six figures,
obviously, but as high as$455,000, it can get
significant.
SPEAKER_01 (21:16):
Okay, good.
Well, I guess we'll, let's talkabout reality.
SPEAKER_03 (21:21):
Yep.
So what we're seeing actually onthe ground, and this will get
fun because we talked about it alittle bit, some of our war
stories, if you want to call itthat.
But one of the things, as we'vesaid a couple of times, is that
signing bonuses have grownsignificantly in terms of
frequency, how often we'reseeing them involved in the
(21:42):
transaction, as well as thesize.
Like I said, loan repayment isalso super, super common,
especially for more juniorpositions.
Again, I don't see that quite asoften anymore.
I just think there's a trendmoving towards signing bonuses.
SPEAKER_01 (22:01):
And you probably see, because you look at more
contracts across a widerspectrum, I mean, I'm just
focused here on my health systemother than helping out my son
and his buddies.
But what other perks now aretrying to pop up, you know, like
whack-a-mole?
SPEAKER_03 (22:19):
Yeah, it's, you know, we get asked that question
a lot.
You know, what are some morecreative recruitment incentives
that we've seen beyond yoursign-on bonuses?
And some of them are non-cash,you know, child care, reduced
works schedule, that's anincreasingly popular one.
(22:40):
And then, you know, housingallowances, I know that is cash,
but that's another example I'veseen pop up a lot, especially in
the Hawaii market.
But the challenge is how do youvalue all of these fairly when
you put them next to each other,especially when you've got these
non-cash related perks?
SPEAKER_01 (23:02):
Yeah, I guess that's hard to value.
I mean, when you hire someonefull-time time, which roughly, I
mean, physicians, a lot of themdo work a lot of hours, and
we're grateful for that here,but if you're hiring them, and
particularly if they go more toan office practice as opposed to
a hospital-based practice, youexpect our non-physician
(23:23):
employees, 2,080 hours asfull-time employee, and they
have more weeks off or vacation,and now they're truly working
1,800 hours, so So how do youvalue that?
Do you take the salary and lookat it differently when they're
working 1,800 hours versus whenthey're working over 2,000
(23:46):
hours?
SPEAKER_03 (23:48):
Yeah, we do.
We have to right-size thoseagainst what the market
expectation is versus what it'sgoing to be under this
agreement.
Obviously, we can't make acomparison to something that is
not consistent with the market.
So we do have to make someadjustments to account for
those.
But it is becoming increasinglycommon.
You know, it goes withoutsaying, too, survey data lags
(24:09):
behind, depending on whichsurvey you're using, anywhere
from a year to a year and ahalf, maybe even two years.
I'm not totally sure.
But it's, you know, it cancreate a little bit of a lag.
And so we often have physiciansthat ask about that just to make
sure that the data that we'reusing in our assessment is the
latest and greatest and fair atthe end of the day, based on
(24:31):
what's going on in the market inactuality.
SPEAKER_01 (24:36):
Yeah, well, you're overpaying.
Not only you're overpaying, butyou create a compliance risk.
You underpay, you lose thecandidate.
Sounds a little bit likefootball in NIL.
SPEAKER_03 (24:46):
Yeah, no kidding.
That's additionally a wholeother podcast that we could
start on that topic.
But yeah, creative structures, Ithink, help in these
discussions.
I always encourage quality to bea part of the discussion,
depending on the house systemand where arrangements are with
(25:08):
the provider that may or may notbe something that'll work right
off the bat.
But I do think it offers alittle bit of help on both sides
of the fence if you canincorporate that quality
component because you're helpingthat provider improve the
quality of care that's beingprovided, but also helping the
(25:29):
health system and the patientsat the same time.
But yeah, we're seeing justincredibly creative offers going
to across the table.
But that gets us to this point.
How do we help organizationsbridge that gap between these
competitive, very creativeoffers and recruitment
incentives and compliance, whichgets to Bruce's cup of tea?
SPEAKER_01 (25:53):
Yeah, and I get involved.
I like to get involved early.
Like I said, part of it issetting up within your
organization.
If you're not in-house, ifyou're outside, if you're
involved in it, getting involvedearly and seeing it Now I'm very
hands-on here.
So I draft all the physiciancontracts.
Other places are different.
You've seen one in-house office.
(26:15):
You've seen one.
And I think it's important toget all the data you can.
And that includes, you know, themarket data, which you all have
and various market data in thebusiness case that we talked
about.
And occasionally somebody wouldsay, well, they have an offer
from so-and-so for this.
And I'm like, and it doesn'tmake sense.
I'm like, okay, well, If they'rewilling to share the offer with
(26:38):
the actual document, I'll lookat it.
It's another piece of evidencethat I'll look at and consider.
You're
SPEAKER_03 (26:45):
absolutely right.
I'm so glad you said thatbecause just like you, we hear
that all the time.
I can appreciate that there'scompetitive offers out there,
but I can't take that to courtif this arrangement ever gets
SPEAKER_01 (26:59):
looked at.
Base value that they say on anemail, this is what I got.
Okay, well, let me see theproof.
SPEAKER_03 (27:07):
Yep.
And I also want to make surethat, you know, what the numbers
we're throwing on the table, thedetail behind those numbers
aligns with the detail behindthe numbers on the competitive
offer.
You know, maybe what I'mthrowing out includes a
part-time admin role and whatthey're throwing out is
full-time clinical role.
You know, maybe that's whythere's a discrepancy there.
(27:27):
So it's always good to checkthose numbers.
And same thing here.
We always prefer to get involvedearly.
You know, it does happen and youknow, through no fault of anyone
that, you know, you've got toget a specialty physician in the
door and things have to happenquickly.
And sometimes we get engagedafter the fact.
That happens.
Obviously, the preferred is thatwe can get involved earlier and
(27:50):
see where the numbers are andhelp them make sure that they're
compliant.
But as you are experienced, too,sometimes you just have to be
flexible.
SPEAKER_01 (27:57):
You do.
You have to look and it's anever-changing marketplace.
So, you know, we talked aboutthe non-cash benefits.
But we also go ahead and makesure that we document this.
Now, from our standpoint,fortunately, I think we moved a
(28:17):
little further.
So we have an electronicdocumentation system for
contracts.
And so all that has to besubmitted.
So we retain that in the eventthat we ever were to have
scrutiny from our governmentagency, it would be easy to lay
our hands on it instead of anexchange of information.
And that just disappears intoether.
(28:39):
We want all those documents tobe in one place to support the
fair market value, thecommercial reasonableness, as
well as why you actually did it.
SPEAKER_03 (28:51):
Yeah, totally agree.
The more documentation, thebetter, which I recognize for
some health systems is hard toacquire.
It can be difficult to get allthe information from all the
different parties.
But it really does tell thatstory.
And at the end of the day, Iknow what's going to matter is
that you did everything youcould to get that information to
(29:11):
tell that story.
Especially you mentionedcommercial reasonableness.
That's really where you get themajority of the qualitative
information.
Especially having thatdocumented is important and
having that in your files to beable to pull up and say this is
the situation at the time.
This is why we felt the need tohave to put this forward.
We looked at everything.
(29:31):
We looked at other potentialopportunities.
Nothing worked out this is ourbest avenue.
And that's exactly what thegovernment's going to be looking
for.
SPEAKER_01 (29:39):
Now, we moved, you know, we talked a lot about, you
know, here's a salary, here'swhat we're going to pay you.
And another component of that,though, is not just the base
salary, it's WRVU, tiered WRVUpayment.
And we put that in there.
But I think you also were movingtoward almost all of our
(30:01):
contracts now have a qualitycomponent.
SPEAKER_02 (30:04):
Nice.
Yeah.
SPEAKER_01 (30:05):
And the quality component is for some, not all
of our contracts, actually partof it is a withhold that you
have to meet a certain tier ofthe quality to earn back say 10%
of your base.
Or you have to meet this qualityin order to qualify to get
WRVUs.
And then there's a bonus kickerif you have exceedingly good
(30:29):
quality, which we hope they alldo.
So we don't just want physiciansto have contracts that are laden
with just churn WRVUs, churnWRVUs because that creates other
issues and other compliancerisks and quality issues too.
SPEAKER_03 (30:46):
100%.
And I think quality can betricky too because it does
involve both parties, right?
You want the physicians that aregoing to be working to meet
these metrics involved in thedecision process because they're
the ones, boots on the ground,they know what needs to be
corrected and and fixed andimproved, et cetera, whatever it
(31:07):
may be.
And then you have to haveleadership involved too, because
sometimes there's cost reductionmeasures that you're trying to
achieve as well.
So it can be a difficultconversation to have to figure
out what those metrics need tobe, what the thresholds need to
be.
You know, as you said, is it awithhold?
Is it an in addition to, youknow, each of those have pros
(31:28):
and cons to them from thephysician side and from the
hospital side, there's upsideand downside risk can go a lot
of different ways.
But at the end of the day, Ithink what we hope for is that
there is that quality componentin there, but that those quality
metrics actually have teeth.
I love to see quality metrics,but what I don't love is when I
ask for a data request and I getthe historical performance back.
(31:52):
And for the last year and ahalf, I've seen 100%.
And so my question is, well, whyhasn't this been changed yet
after the second month orsomething like that?
Again, it's hardadministratively, though, to
update that and keep track ofit.
So I
SPEAKER_01 (32:06):
can appreciate that as well.
It can't just be a layup.
It can't be an easy thing toget.
They've got to really show thatthey've earned it by providing
outstanding quality.
And we care to make sure.
It's not all or nothing becauseif it's too hard, you discourage
the physician from even trying.
SPEAKER_03 (32:24):
Yep, exactly.
SPEAKER_01 (32:25):
You have to work through that.
It's something that's extremelyimportant From our standpoint,
to continue to recruit, I mean,we end up recruiting upwards in
the neighborhood about 30different positions a year.
So it's an ongoing process.
(32:47):
And it's changed from the firstyear I arrived to now.
And what do you really see ifyou were to go ahead and say,
navigating today, how we goahead and try to balance all
this?
SPEAKER_03 (33:06):
Being flexible, I think, is number one.
I think number two is makingsure you're continuing to have
conversations with differenthealth systems across the board.
This is from an evaluationperspective, obviously, to make
sure that you're ears to theground in terms of what's going
on, how different health systemsare assessing the risk that
(33:29):
comes with some of theseincentives and these pay
packages.
Sometimes it just takes adifferent health systems
perspective for you to changeyour mind on an approach.
I also think we have to have alittle bit of grace sometimes
with regards to regulation.
There's so many changes andthere's so many things to
consider.
(33:49):
You just have to sometimes stepback, recognize there's gonna be
some missteps, but it's also howyou take corrective action when
those missteps occur.
There's so much to be payingattention to.
I think we'd be silly to thinkthat there aren't mistakes out
there with arrangements withproviders.
It's just that we have to figureout how to correct them and
mitigate them going forward.
SPEAKER_01 (34:11):
Yes.
I mean, so we have shortages ofphysicians.
We have, in some areas, Medicaidpotentially in many states,
payments being reduced.
And then we have Medicare goingahead and really starting to
push more bundle payments.
So there's a lot to figure outof what you have available to
(34:32):
compensate these physicians for.
SPEAKER_03 (34:34):
It's a lot.
It's a lot to consider.
consider and you just have tosurround yourself with, make
sure you're not the smartestperson in the room is what I've
SPEAKER_02 (34:44):
heard before.
I don't have to worry aboutthat.
SPEAKER_03 (34:47):
Yeah, there's a lot going on.
It's hard to keep up with itall.
It is.
So that's what I mean when youjust have to kind of show a
little bit of grace to itbecause there's just, it is so
hard.
It's a lot to get through andwade through for sure.
SPEAKER_01 (35:04):
Well, I'm glad we had this time to discuss this.
I mean, we discussed it before,and it's an area that I think is
just, for now, particularly aswe have shortages of physicians,
going to continue.
And not to even mention, youknow, in our area, because we're
rural, we have a significantnumber of foreign medical grads,
(35:26):
which also adds anothercomplexity to it.
Because the regulations withthat, you know, you have to have
certain pay measures that are atleast equal to what the median
rate would be.
And usually, they have to behere three years.
(35:48):
And the government prevents youfrom putting in certain
provisions in the contract thatyou normally would put in.
So there are complexities thatyou have to constantly look at.
But with help from you andothers, hopefully we'll make it
through.
SPEAKER_03 (36:05):
Yeah, I think so, yeah.
I think we will.
Bruce and I are in the weeds onthese issues.
We're always happy to pick upthe phone and talk through it.
So we appreciate you listeningto this discussion on this super
complicated and hot topic.
SPEAKER_01 (36:20):
So hope you enjoy it, including my bad jokes.
And I look forward to talking
SPEAKER_02 (36:29):
again, Kate.
SPEAKER_01 (36:31):
Yeah, that's right.
That's right.
Yeah.
You have someone to look at acontract for free because
they're a resident you know i'ma guy because i didn't seem to
do that too much for my son andhis friends but um uh it's been
great and thank you uh for doingthis with me i really enjoy it
SPEAKER_03 (36:49):
yeah absolutely thanks everyone
SPEAKER_01 (36:51):
thank you
SPEAKER_00 (36:58):
If you enjoyed this episode, be sure to subscribe to
AHLA's Speaking of Health Lawwherever you get your podcasts.
For more information about AHLAand the educational resources
available to the health lawcommunity, visit
AmericanHealthLaw.org.
And stay updated on breakinghealthcare industry news from
the major media outlets withAHLA's Health Law Daily Podcast,
exclusively for AHLAComprehensive members.
(37:21):
To subscribe and add thisprivate podcast feed to your
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Daily Podcast.
UNKNOWN (37:28):
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