VIDEO | Recruitment and Retention Challenges in Community Health Systems

Explore a smarter path forward with insights from our experts.

Community health systems, regional or local health systems whose primary mission is to provide accessible and affordable care, are facing growing financial challenges.

The gap between what physicians earn and what these health systems collect in these markets continues to widen – making it difficult to sustain physician compensation at competitive levels.

In this video, SullivanCotter’s Tim Stamper explains this imbalance and explores how community health systems can address these issues.

Video Transcript

Hi, my name is Tim Stamper. I’m a Principal with SullivanCotter in our Physician and Advanced Practice Provider Workforce. I’ve been assisting hospitals and health systems design and evaluate provider compensation plans and assess provider performance for over 15 years.

Community health systems, which we generally define as regional or local health systems whose primary mission is really to provide accessible and affordable care, play a critical role in care delivery across the country.

But right now, they’re facing growing financial challenges. Our latest Physician Compensation and Productivity Survey reveals a widening gap between what physicians earn and what the health system collects in these markets.

Community health systems generally can’t sustain compensation at similar levels to large health systems because their collections lag the national average by a larger percentage than cash compensation. For example, physicians in primary care, surgical specialties and hospital-based specialties all earn compensation approximately 3% to 5% below national benchmarks.

However, this leads to point number two, which is that collections are even lower. Across many specialty areas, collections are flat or even declining from prior years. Community health system collections in the same specialty area that I just noted are nearly 10% lower than national benchmarks. This is largely due to a lack of scaling power and leverage with insurers – likely leading to lower reimbursement rates.

The result of this issue is higher total cash compensation to collections ratios. In short, this is leading to a sustainability issue. Community health system organizations have to be competitive with the national market, but they aren’t collecting as much in professional revenue. This imbalance is continuing to drive labor costs higher and putting additional strain on financial sustainability at a time when resources are already stretched thin.

Given these issues, what’s our path forward? At SullivanCotter, we’re helping community health systems in this space by tackling the following issues:

1) Implementing core performance expectations. This includes clearly defining minimum work standards around what it means to be a provider within your system.

2) Building smarter care teams where everyone works at the top of their license. Given the current balance sheet of many health systems, workforce optimization is a very hot topic.

3) Investing in recruitment and retention strategies that really focus on the local community. So this includes provider needs assessments and proactive succession planning.

4) Reviewing professional services agreements to ensure that independent contractors are both aligned with system-wide strategies and market competitive from a benchmarking standpoint.

By grounding decisions in the right data, community health systems can really find that balance between competitive pay, strong performance, and long-term sustainability.

That’s how we shape future success.