Who is going to pay for my Tail Coverage?

Who is going to pay for my Tail Coverage?

If you are already familiar with the concept of what tail coverage is please feel free to skip to paragraph 4. If you are in the role of physician recruiter or in the process of recruiting a physician and are unfamiliar with the concept then do not worry, as we have seen many a physician, administrator, etc. who has never had to deal with either the arrival or departure of a physician and has therefore not encountered the term before.
To understand tail coverage, you must recognize that in the world of professional liability or “malpractice” coverage there are two types of policies; “claims made” and “per occurrence.” The full explanation between the difference between the two types, and the rationale for one over the other is beyond the scope or interest of this article. All that is needed to know is that a) “claims made” policies have become commonplace and “per occurrence,” while still available in some markets, has fallen into all but total obsolescence and b) with a “claims made” policy, in the event that a physician wants to seek employment elsewhere or leave their carrier for whatever reason, very often supplemental insurance or “tail coverage” is needed to cover the physician for any claims made after they have left their prior carrier but in which the alleged claim of malpractice actually occurred while they were covered by the prior carrier.
In other words, if Family Practitioner X is under a claims made policy while working for Family Practice Y and subsequently wants to terminate employment and join Family Practice Z, lest Family Practice Z has the same carrier as Family Practice Y and the carrier also provides for reciprocity between the two groups, Family Practitioner X will need tail coverage to protect both himself and his prior practice Y against any claims made after he has left, but in which the disputed event took place during his tenure with Family Practice Y. Also, note that tail coverage varies in price according to a number of factors, but generally speaking the largest factor is, as determined by an actuary, how prone their particular specialty is toward claims of malpractice. So, tail coverage for a primary care physician is going to be much less than, say, an obstetrician or perhaps an orthopedic spine surgeon. Now that you have been given a very cursory primer, the question remains…
Who pays for this? Is it the responsibility of the physician, the prior group or the new group? An argument can be made for all three: 1) It can reasonably be argued that the physician whose professional service that needs to be covered should pay for it since they could be potentially bankrupted absent a “tail” but 2) It can also be reasonably argued that the prior group has some responsibility because most plaintiffs attorneys seeking remedy on behalf of their client will not only sue the physician in question but also the group they belonged to since often the group as a whole is of much greater financial wherewithal than the individual but 3) It can also be reasonably argued that the entity the physician is joining should pay for the cost of tail coverage, since if they do not it is often the case that the physician cannot afford it on their own and the group they are leaving may very well not want them to leave.
The answer is not necessarily cut and dry, but our opinion as experienced and professional physician recruiters is that the hiring entity should take the stance with respect to all physician candidates that it is reasonable to make it easy for a physician to join your group but it is not your responsibility to make it easy for them to leave. In other words, you probably need to at least share in the cost of covering your doc’s tail, if not paying for it outright. Furthermore, you should stipulate in their employment contract that should they leave of their own volition, or if fired with cause then they are responsible for the cost of tail coverage. It is generally accepted that only in the case of a physician being let go without cause should the practice dismissing them be on the hook for tail coverage.
With that said, I am well aware that as a hiring entity, the prospect of paying for tail coverage can strike you as rather costly. Such is especially true if you are in a specialty prone to malpractice complaints; as physician recruiters we have seen plenty of six-figure tails. If you are in such a specialty, really one of the only ways around such an expense is by hiring someone right out of training, but as contemplated on another article on this website that strategy in and of itself can be problematic. Furthermore, you may want someone who is not right out training and/or it may not make sense to hire someone that green.
Here’s another proposition, which is generally considered as reasonable but will differ by specialty and with location. Perhaps cover their tail entirely, but structure it as a loan with, say, a two year forgiveness period. This will help encourage them to stay for at least the length of the forgiveness period. In other words, cover their tail but attach some strings that benefit you.

Hospitalist! Where are the saturated markets!

No vacancy
Why hospitalists in some markets are (gasp!) having a hard time finding work
by Phyllis Maguire

Sam Bagchi, MD, recently did something that’s rare for him: He hired a hospitalist to fill a day-time slot.

Dr. Bagchi, director of the 15-physician hospitalist group at Emerson Hospital in Concord, Mass., hasn’t had many opportunities to hire daytime hospitalists over the last year or so. His program, like many others in the Boston area, is more or less fully staffed.

“I’m turning people away I wish I could hire,” says Dr. Bagchi. “That’s a luxury that well-established hospitalist groups in this area have.”

The economic downturn and hospitals’ current financial traits are having

a major impact on hospitalist recruiting in many markets. Some cash-strapped hospitals are telling their hospitalist programs to do the best with what they have until hiring budgets are flush again.

But in some very desirable markets—such as Boston, Seattle and southern California—hospitalist directors are using a word that hasn’t been heard before in hospital medicine: saturation. In those markets, they say, the days of frantic recruiting, complete with outsized signing bonuses and bidding wars, are over.

When groups do have a slot to fill, they now pick and choose who they even consider, let alone hire. During Dr. Bagchi’s search, for example, the selection process came down to two experienced hospitalists. The one who ultimately got the job used to direct another program.

“The rapid expansion of the past, at least here, has hit the wall,” Dr. Bagchi says. “Physicians still have opportunities to break into the Boston market, but they now have to be more creative.”

The end of the buyer’s market
In the last six months, physician-placement firms have reported a sharp decline in hospitalist recruiting in major metropolitan areas across the country. That’s according to Regina Levison, president of Levison Search Associates in El Dorado, Calif., who’s part of a partnership of 12 firms nationwide that places physicians for both hospitals and hospitalist staffing companies.

That slowdown has hit home, Ms. Levison says. Her firm now represents a bilingual hospitalist with three years of hospital medicine experience who wants to relocate from San Francisco to Los Angeles.

“Just a year ago, we would have been able to set up interviews for him with the first six hospitals we called,” Ms. Levison says. “Now, we’re not getting many bites.”

Ms. Levison’s colleagues have a unanimous answer for what’s behind that recruitment trickle: the economy. Hospitals and hospitalist companies struggling with reduced revenues, she says, have shelved plans to expand and opted for hiring freezes.

But Per Danielsson, MD, who directs the 31-provider hospitalist program at Swedish Medical Center in Seattle, has a different take. Swedish has certainly tightened its belt, he says, laying off 200 people in February. But the hospital also approved Dr. Danielsson’s plan to fill his one remaining nocturnist slot.

What’s changed in Seattle since last fall, he explains, is the fact that the buyer’s market for hospitalist candidates there is apparently over. Back in 2005, he recalls, he had to scrap the program’s three-year, tiered compensation plan in favor of one compensation package for new and experienced hospitalists alike. “The tiered compensation plan negatively affected our ability to recruit, and it had to go,” Dr. Danielsson says. “The market was that competitive.”

But today, instead of hiring five or more new physicians to start this summer, as he’s done for several years, he hired only two. Both were graduating residents who called last September, as did several of their fellow graduates, looking for a job.

“I had to turn down several strong candidates, but I kept hearing from them,” he points out. “They were still looking for positions in January and February.” Instead of the hospitalists hosting an annual bash for local residents, “we decided to cancel the dinner because we didn’t have positions to offer in early December.”

No more room to grow
What’s changed? According to Dr. Danielsson, the hospitalist patient volumes at Swedish grew rapidly between 2000 and 2007, and the hospitalists worked hard to keep up with that demand.

Over the past two years, however, “we’ve seen much slower growth, and our hiring reflects that.” Most primary care physicians have already turned their patients over to the hospitalist group, he says, “so we’ve just about exhausted that market.”

While his group plans to expand its scope of practice with palliative care services, observation-unit coverage and more surgical comanagement, Dr. Danielsson intends to start slow and initially use current personnel.

In Boston, Dr. Bagchi reports an even higher level of service saturation. The Emerson hospitalists already comanage ICU patients, as well as those of all medical specialties and orthopedics, caring for 95% of the internal medicine patients and 70% of the hospital’s entire volume. He might be able to eventually hire more FTEs to cover weekend rounding and night-time shifts, “but not to take on new services.”

For Burke Kealey, MD, assistant medical director of hospital medicine for HealthPartners Medical Group in St. Paul, Minn., the only new service lines his group could really add at this point would be comanaging more esoteric surgical subspecialties such as neurosurgery, urology, and ear, nose and throat. His 65-provider hospitalist group may also consider (and recruit more hospitalists for) comanaging psychiatric patients.

In the meantime, Dr. Kealey’s days of aggressively recruiting as many as 12 hospitalists a year are over. “All the hospitals in the metro area, which extends 30 miles around the city, now have hospitalist programs at homeostasis,” he says.


According to Ms. Levison, she and her associates still see robust hospitalist recruitment in the Midwest, the suburbs of the Southeast, and in smaller and rural areas throughout the country. She also reports a wide open market for hospitalist “subspecialists” such as laborists, surgicalists, and med-peds and pediatric hospitalists.

A high bar on quality
In Southern California, HealthCare Partners—a physician-owned multispecialty group with more than 80 hospitalists serving more than 15 facilities—is facing saturation in what Tyler Jung, MD, the hospitalist program’s medical director, calls “the more desirable areas.”

Those include not only beach communities like Long Beach and South Bay, he explains, but facilities with larger programs and more extensive infrastructure, including dedicated case managers.

While Dr. Jung used to go out of his way to get to know graduating residents, that’s changed in the past year or two. However, “if a hospitalist has experience, my eyes and ears are wide open, and I’ll do everything I can to actually meet him or her.” Likewise he adds, “you find me nocturnists, and I’ll find them a job.”

Hospitals in Miami have also reached saturation, says Tomas Villanueva, DO, director of the 25-physician hospitalist group at Baptist Hospital. Because most physicians who grow up in Florida have to train elsewhere, many are eager to return after residency. But many now find hospital medicine opportunities, at least in Miami, few and far between.

According to Dr. Villanueva, he has been sending the CVs of promising candidates to other program directors for more than a year. But the quality bar is now so high that among the recruits that he occasionally interviews, he finds very few who he considers to be strong candidates.

“We find a lot of people who want to leave private practice or come out of residency for a job that pays well and has a good work/life balance,” Dr. Villanueva says. The problem? They’re not strong communicators, leaders or patient-safety advocates.

“They may roll their eyes when you mention patient satisfaction scores or the need to call primary care physicians post-discharge,” he explains. While at one time his hiring criteria consisted of finding “physicians with a pulse,” he admits, he and his team now insist on “the right people.”

Future growth forecast

While Dr. Villanueva’s program is “tapped out” as far as hiring, he says that may change if the group opens up other service lines or signs contracts with more insurance plans.

In Southern California, Dr. Jung says that continued growth—in the form of covering more lives and/or more hospitals—may be just a phone call away. In California at least, the economic downturn is fueling a major wave of mergers and acquisitions among medical groups. Eventually, he says, the trend should drive more hospitalist recruitment and program growth.

Paradoxically, he adds, the economic downturn should also fuel—even in saturated areas—the growth of hospitalist programs that show utilization savings, not just more efficient billing. Many patients that his hospitalists care for are covered by managed care companies and independent physician associations.

“Hospitals know what type of utilization and efficiency we bring to patient populations, and the economy is actually pointing to the need to grow those hospitalist groups,” Dr. Jung says. “Many CEOs are concluding that left unchecked, hospitals that have a large panel of cash-only patients who aren’t mitigated by an efficient team of physicians will face staggering losses.”

Hard lessons learned

For now, both the downturn and what may be temporary saturation appear to be improving retention. Hospitalist programs are much less likely to try to raid each other’s physicians by dangling $10,000 or $15,000 pay differentials to lure them away.

That speaks to another factor contributing to saturation: more physicians are sticking with hospital medicine as a career.

According to Dr. Kealey, the fact that many urban markets now have stable staffing is a good thing. For one, it means that more hospitalists will start moving out to staff suburban and rural hospitals, extending the hospital medicine model.

And market saturation underscores the evolution of the field. “We’ve learned some hard lessons about how to create sustainable jobs as far as work hours and leadership training,” Dr. Kealey says. “People in these mature programs aren’t leaving as often.”

Phyllis Maguire is Executive Editor of Today’s Hospitalist.


Getting creative about finding a job

IT’S NOT THAT YOU CAN’T FIND a hospitalist position in Boston, says Sam Bagchi, MD, director of the hospitalist program at Emerson Hospital in Concord, Mass. It’s just that you can’t find a day-time slot in a stable group.

At Dr. Bagchi’s program, for example, he won’t even consider interviewing a physician who wants only a one- or two-year job before going on to a fellowship for a day-time position. And as for graduating residents, he talks to them only about working a year or two as a nocturnist, the one position he has to fill. (He filled a recent day-time slot, but that was a fluke, he points out, because he needed more administrative time and a colleague decided to go part-time.)

Physicians who get a foot in the door by working nights or weekends will be first in line when day-time positions open up, Dr. Bagchi adds. Or physicians who don’t mind initially putting in long hours at newly launched programs will likewise find opportunities.

But in areas like Boston, opportunities will be rare. “Boston area hospitals were right out in front of the hospitalist movement,” he explains. “There aren’t that many late adopters starting up.”

What is happening, Dr. Bagchi explains, is that programs switching business models—from hospital-employed physicians to a staffing company, for example—have to ramp up quickly. Such “fixer-upper” programs, as Dr. Bagchi calls them, often demand long hours.

To find jobs in metropolitan areas that have either frozen hiring or reached some level of saturation, “you’re going to have to pay dues either by shifts, money or distance,” says Regina Levison, president of Levison Search Associates in El Dorado, Calif. Ms. Levison says that she and her colleagues, who are part of a 12-firm nationwide recruiting partnership, still see many part-time and locum hospitalist positions available in major cities.

Hospitalists looking to break into a market should check in with specific hospitalist groups every two to three weeks and with hospital recruiters once a month, she says. If you’re determined to live in a specific metro area, consider working in a nearby suburban hospital to get established.

Or join a hospitalist company that has a presence in that city and work in another facility, letting it be known that you’d like to relocate when possible. Or consider a reverse commute. According to Dr. Bagchi, some hospitalists who live in the Boston area work in western Massachusetts or Connecticut.

To work in Miami, Tomas Villanueva, DO, offers this advice: Don’t use a headhunter because they’re too expensive. And find a way— through medical school contacts, for instance—to speak directly to the program director or the individual hospitalists within a group.

“By far, my best recruiters are my own docs,” says Dr. Villanueva, who directs the hospitalist program at Baptist Hospital. “They want people who they know will be team players, so they triage the physicians they suggest to me.”

In Seattle, Per Danielsson, MD, director of the hospitalist program at Swedish Medical Center, advises physicians to consider moonlighting at one or more hospitals. “If you can live without the benefits and with that uncertainly that comes with a moonlighting position,” he says, “it can be a great way to move into a market.”

ObamaCare will chase Primary Physicians from the profession...THAT MEANS YOU WAIT MUCH LONGER TO SEE DOCTOR AND GET WELL!

ObamaCare's Most Frightening Consequence: Not Enough Doctors

by John Rossomando

08/02/2011

ObamaCare’s defenders promised the law would increase patient access to care, but a closer look shows that increased regulations combined with higher demand for health services could cause many physicians to give up practicing medicine.

“You are seeing a change that I haven’t seen in my over 30 years in the practice of medicine,” said Tennessee GOP Rep. Phil Roe, who worked as an OB/GYN before getting into politics. “I think what you are going to see is people going in to see a nurse practitioner, not a medical doctor, as has been the case for decades.”

According to Roe, Medicare will pay doctors less than Medicaid by 2020 should ObamaCare remain in place, which means that doctor who runs a solo practice with three employees and who grosses $300,000 could see a 30% cut in his reimbursements.

Doctor who use approximately half of their gross receipts on paying overhead costs would still have to do so even when their reimbursements are cut.

“His cut will be $50,000, meaning instead of making $150,000, he will only be making 50 or less,” Roe said. “It only takes a year or less of that to see why they are terrified of this.

“They have bills to pay. They have mortgages. They have school loans.”

Georgia GOP Rep. Tom Price, a fellow physician in the House Republican caucus, warns regulations will also cause doctors to change their minds about staying in medicine because they will make doctor-patient interactions more difficult.

“There will be limitations on medications that will be available, and shortages of medications through the FDA,” Price said. “Surgeries will have to postponed because of a lack of medications needed to put patients to sleep, damaging the quality of the care that is received.”

Price complains the regulations even come between patients and doctors when it comes to things as routine as how a doctor has to fill out paperwork to order oxygen tanks for patients who need them.

A November 2010 Physicians Foundation Survey underscored this when it found that 56% of doctors it surveyed anticipate the health care law will diminish the quality of care they can give their patients. A further 40% of physicians said they planned to retire, seek a nonclinical job in the health care field or leave the medical profession altogether.

A Galen Institute Study also found that ObamaCare’s regulations likely would force countless aspiring doctors to forgo entering the profession at a time when demand for care is on the rise.

“PPACA [ObamaCare] will strip away physician autonomy, drown doctors in bureaucracy and drain job satisfaction,” Dr. Jason Fodeman wrote in an April 2011 study for the Galen Institute. “As the profession deteriorates, older doctors will retire while younger doctors will look to switch careers.

“Many students considering a career in medicine will pursue other opportunities.”

According to Roe, only 4% of the nation’s students are getting into primary care fields.

A survey by the Associations of American Medical Colleges found the nation’s doctor shortage likely will increase the project shortfall of 62,900 doctors in 2016 to 91,500 in 2020.

“When these older doctors who are used to working 70 or 80 hours quit, I don’t know what we are going to do for internists and primary care,” Roe said.

The Galen Institute Study reports that Massachusetts, which many believe to be a precursor to ObamaCare, has seen a big reduction in doctor willingness to take on new patients. In 2007, the state’s Division of Health Care Finance and Policy Reported that 70% of general practitioners were willing to accept new patients in 2007, but that has declined to 60%. And today only 44% of internal medicine practitioners in the Bay State have indicated a willingness to take on new patients—down from 66% in 2005, before the state’s health care law took effect.

“Waiting times have increased even more since RomneyCare was passed,” said Cato Institute health care expert Michael Cannon. “And since government has inflated demand even more, it hasn’t done anything more to meet that quantity demanded versus the supply. Therefore, you get that sort of shortage.”

The Massachusetts Medical Society’s 2009 Physician Workforce Study found that the time needed to recruit physicians into specialties such as internal medicine, family medicine, orthopedics and neurosurgery had significantly increased in the three years following the implementation of the state’s health care reform law.

“It remains to be seen how the federal government will deal with this imminent fiasco on the national level,” Fodeman wrote. “Obviously the administration can’t make doctors practice, nor can it make people attend medical school.

“The likely solution will be a combination of rationing and an increased reliance on mid-level providers such as nurse practitioners and physician assistants.”

And the law’s defenders can only counter that the law provides for an increase of the number of graduate medical training positions, increases scholarships available for teaching centers in rural areas and provides state grants to increase access to care in rural areas.