Physician Recruitment Arrangements

Recruiting qualified physicians is essential for the success of any hospital. Due to the current growth rate of the U.S. population coupled with an increase in average life expectancy, the Association of American Medical Colleges predicts that there may be a shortage of over 100,000 physicians by the year 2030. Faced with these challenges while still needing to meet the needs of their patients, hospitals frequently seek out opportunities to recruit qualified physicians into their communities. Recruitment arrangements may take the form of providing compliant financial assistance to a relocating physician or directly employing the physician. Recruitment incentives may include compensation/income guarantees, signing bonuses, relocation stipends, and student loan forgiveness.

VMG Health has insight into the latest trends and the various physician recruitment compensation structures based on our extensive experience in valuing these types of arrangements. As a result, we can rapidly assist in confirming if a recruitment compensation arrangement with a physician is fair market value.

Compliance

Documentation illustrating that recruitment compensation was set at fair market value represents best practice for compliance purposes. Two examples of value drivers that should be considered in deriving a proper payment for physician recruitment include: 1) understanding whether a physician shortage exists in the local market for the subject specialty, and 2) understanding the recruited physician’s experience and qualifications. VMG has a keen understanding of these factors, and a myriad of other valuation drivers associated with physician recruitment arrangements.