The Medical Group Management Association’s most recent MGMA Stat poll asked healthcare leaders, “Has your organization added or increased benefits for employees in the past year?”
- 26% said “yes”
- 74% said “no.”
For those who responded “no,” several noted that it’s not economically feasible at this time. However, for those who answered “yes” responses included:
- “Increased health insurance benefits, short-term disability, retention bonus and cell phone allowance.”
- “Mental and emotional wellness, paid leave for physical illness, childcare (at cost to employee), IT resources for work-from-home employees.”
- “Work-from-home extension, higher pay, more flexible hours, incentives for time off due to good attendance.”
The poll was conducted June 8, 2021, with 887 applicable responses. This is the second straight year that compensation and/or benefits have been affected by the pandemic, as a May 19, 2020, MGMA Stat poll revealed that 82% of healthcare leaders responded that some or all of their providers’ compensation had been impacted amid COVID-19. As practices continue to recover, it will be vital to periodically assess compensation and benefits for providers and staff.
Coming out of the COVID-19 pandemic, physician retention is a priority for medical groups, particularly as competition increases for a smaller pool of physicians. According to the Association of American Medical Colleges (AAMC), by 2033, there will be a shortage of between 54,100 to 139,000 physicians in the United States, including up to 55,200 primary care physicians.
But it’s not only physicians medical practices have to be concerned about. In a May 6 MGMA Stat poll, 88% of healthcare leaders responded that they are having difficulty recruiting medical assistants (MAs). Further, according to an American Nurses Foundation survey conducted in January and February 2021, 39% of nurses said they were either considering or planning to leave their position in the next six months.
This is largely driven by the pandemic, which amplified the stress and strain on providers and staff. In fact, according to a recent Washington Post-Kaiser Family Foundation poll, 29% of healthcare workers have considered leaving the industry, mainly due to burnout.
Replacing physicians can be particularly damaging to practices, as the average cost to replace a physician is between $500,000 and $1 million, including at least $30,000 simply to recruit candidates. And this doesn’t account for the resources and time it takes to hire the right candidate. Add to this annual turnover rates of around 7% in medical groups, and it becomes clear that retention can be a key ingredient to reducing costs and turnover.
One way to help combat turnover is for practices to focus on creating a competitive and comprehensive benefits package. As Mark Massey, vice president, Southern Medical Association, and Keith Gillies, CFP, MBA, Managing Partner, Wealth Solutions, mentioned in a recent MGMA webinar, it’s vital to have a streamlined retention program to further engage providers and staff.
“It costs money to bring someone on, so if you already have someone in place, and they're doing a good job for you, let's think about how we can keep them on board,” maintained Gillies.
Watch for the MGMA DataDive Management and Staff Compensation report, available later this month.
Benefits can serve to help retain providers and staff and ensure that they feel appreciated. Standard benefits should include:
- Comprehensive medical — Broad coverage that includes services such as physician visits, hospitalizations, and emergency room visits, along with preventive care.
- Group life and disability income — Practices can provide non-taxable group life and disability policies up to $50,000 per employee, so providers and staff don’t pay a dime up to that threshold.
- Continuing medical education — Offering CME to providers and staff for free is not only a substantial financial perk, it also ensures they are more apt to keep up with their licensure requirements.
- Personal time off — Younger providers want a better work-life balance, which may include more flex time, night shifts so they have more time with their family, or reducing on-call time (or not having to be on call at all). Many groups offer a bank of paid time off, which employees can use for vacation, personal days, sick leave or CME.
- Retirement plans — There are many retirement plan options, so it’s important to work with a financial advisor who is an expert in qualified retirement plans or a third-party administrator who has experience in meeting the needs of medical groups.
To help address the strain on healthcare professionals caused by the pandemic, insurance groups have recently expanded group life and disability coverage. For example:
- Specialty coverage for advanced practice providers (APPs), which offers protection related to their roles at their medical group.
- A credit to help cover a portion of student loan costs when a covered employee has returned to work part time while receiving long-term disability benefits.
- A supplemental benefit to assist in covering all or a portion of a claimant’s COBRA medical premium while they receive long-term disability benefits.
Strategic and intangible benefits
In addition to providing a comprehensive standard benefits package, practices can supply added value with a strategic benefits package, which can include:
- Individual life and disability insurance — For providers, $50,000 of coverage doesn’t equal a year’s salary, so offering individual life policies is a good idea because the practice won’t be taxed. And even though the provider will be taxed, the amount is very small compared to the overall benefit.
- Comprehensive financial planning — Working with a financial advisor who specializes in qualified retirement plans or a third-party administrator who can furnish group services to providers or other high-level employees can be a valuable perk. These advisors may also offer modular planning that can help with individual needs such as college planning.
- Non-qualified deferred compensation (NQDC) — A potential benefit to providers and practices, NQDC plans allow practices to fund future income — from wages, bonuses or other compensation — for high-level employees without adding to the practice’s current tax burden. Participants are essentially putting money away for a rainy day; e.g., an emergency, separation from employment, disability or even simply a specified date written into the plan.
- Loan forgiveness/repayment assistance — Although this benefit is primarily for new hires, addressing providers’ student loan debt can be a very persuasive recruitment and retention tool. It’s in the practice’s best interest to stipulate that the money be repaid within a certain period, if the provider leaves the practice.
- Employee education — Beyond financial planning, practices can provide education on social security planning, risk and protection, and addressing debt, among other offerings.
Gillies pointed out that it’s crucial for practices to keep providers and staff in the loop about all the benefits offered. “If someone on your team or someone that you bring in from the outside is not educating your employees on the benefits and the complete compensation package you're providing them, then you're not getting the full benefit of the investment you're making,” he added.
Do you have any best practices or success stories to share on this topic? Please let us know by emailing us at firstname.lastname@example.org.
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- How to increase physician recruitment and retention (on demand) — This 60-minute webinar provides the knowledge to become more competitive in the recruitment market, explains standard and strategic benefits to attract provider talent, and shows you how to implement a retention program.
- "MAs MIA? The COVID-19 pandemic made hiring medical assistants harder than ever" — Increasing demands for care and the impacts of the COVID-19 pandemic have made it significantly harder for medical practices to recruit highly qualified medical assistants. Learn more via MGMA Stat.
- 2021 MGMA Provider Compensation and Production report — Gain insight on the major trends throughout a year shaped by a public health emergency and the extent to which productivity and compensation rebounded after catastrophic declines in March and April 2020.