Non-Monetary Compensation: What You Can Offer
By Wendy Abdo, Staff Writer and Michael P. Broxterman, COO Pinnacle Health Group
Offering competitive monetary compensation is as easy as going to the MGMA’s website and downloading the current salary survey. Yet, by offering the right combination of “little extras” you may persuade a physician to join your group instead of your competitor’s.
So what non-monetary compensation will you offer? Before you formulate a compensation strategy, you must consider a wide range of factors including the following:
– Physician’s personal goals and perceptions
– Care of patients
– Organizational objectives
– Methods of reimbursement
– Government regulations
Besides straight salary and bonuses, there are many different types of non-monetary compensations such as:
– Paid vacation, sick leave, and holidays
– Paid continuing medical education (CME)
– Paid moving expenses
– School loan reimbursements
– Paid malpractice insurance
– Fringe benefits such as health, life, dental, vision, and disability insurance
– Flexible work-hour schedules
– Income guarantees
– Prestigious title of “Medical Director”
– Paid miscellaneous expenses such as for pagers, cell phones, and travelling.
Paid vacation, sick leave, and holidays are very popular. Most medical organizations provide these benefits to their staff. Typically, a physician gets three to four weeks vacation a year. To be more competitive, an organization may, for instance, increase vacation time if the physician values extra time off to spend with family and in personal pursuits.
Another incentive is paid continuing medical education (CME). According to a recent survey*, CME is included in the physician’s compensation package 92 percent of the time with an average yearly allowance of $3,100. Continuing medical education provides benefits not only to the physician, but also adds to the value of your hospital or practice. Many groups will pay all related expenses including classes, cost of meals, car rentals, airfare, and accommodations.
A good motivating strategy is to pay for the new physician’s moving expenses. This will encourage the newly hired doctor to feel good about the move and less inundated with the hassles of relocation. The physician can concentrate on settling in and start out on the right foot. A 2002-2003 survey mentioned that 99 percent of medical organizations paid this expense with an average allowance of $9,000 per relocation.
School loan reimbursement is a definite plus, especially for residents and young doctors who can easily carry debts of $200,000 or more. However, only 12 percent of hospitals and group practices covered school loan forgiveness in 2002-2003, according to a recent study; whereas, 22 percent covered this cost in 2000-2001.
If you are looking for general surgeons or OB-GYN’s, you may want to include malpractice premiums on your list of compensations. In 2002-2003, 91 percent paid for the doctor’s malpractice insurance. Physicians worry about rising malpractice rates, especially in crisis states. If your organization were located in one of these regions, a great incentive would be to pay the physician’s malpractice insurance. This benefit is often a deciding factor in whether a physician elects to take your opportunity over a competing one.
Other all-important options to include are fringe benefits such as health, life, dental, vision, and disability insurance. It is hard to imagine a medical organization not providing health insurance for its staff, yet other types of insurance such as dental, vision, and disability should not be overlooked as a viable source of non-monetary compensation that matters. According to the survey, 96 percent included health insurance and 72 percent paid disability and retirement benefits.
Some physicians put a high value on their overall quality of life and free time. Therefore, you may want to offer a flexible work-hour schedule in your contract. Though less common, this feature is especially attractive to physicians who want to raise a family and be more involved with children. It offers a unique benefit that many other medical organizations miss out on and, provided it does not compromise patient care, can be a definite asset in winning the physician over.
Income guarantees are very popular. A recent study stated that 38 percent of medical organizations offered income guarantees, up from just 34 percent a year ago. This benefit does a lot to ease fears when a physician is starting out in his/her own practice. Many times, doctors moving to a new area are worried about the patient base and the draw area. Will their solo practice really be successful? What if it does not generate enough revenue? By providing an income guarantee, you do much to dispel their initial fears and stir interest in the opportunity.
Sometimes hospitals starting new programs will give the title “Medical Director” to the newly hired physician who will be instrumental in the startup program. Though this appointment is relatively rare in the job market, physicians are attracted to this since it adds professional value to their repertoire. This title is often accompanied by additional money as hospitals can also pay these physicians a consulting fee to get the new program up and running. This title attaches definite value to the opening.
Medical organizations may also pay often-overlooked technological expenses such as pagers and cell phones. In addition, they may include travelling expenses if the doctor is regularly required to visit multiple offices at different locations. Some have even provided car allowances. However, these forms of compensation are not usual and physicians normally will pay for these expenses themselves.
While salary and bonuses are of primary importance, other non-monetary compensation can often sway a doctor’s decision. In addition, physicians expect certain benefits like health insurance, paid vacation, and holidays. In a competitive environment, you should offer the best mix of monetary and non-monetary compensation that reflects the goals and objectives of your organization while accommodating the needs and desires of the physician.
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* MHA 2003 Review of Physician Recruitment Incentives