Physician recruitment has a 'Cheesecake Factory' problem: What that means, and how 3 CEOs are solving it

Forget signing bonuses and relocation packages. The latest litmus test physicians are using to evaluate job offers involves chain restaurants and medical mission trips. 

On a recent advisory call with Becker's, three CEOs described the way physician recruitment, their top strategic challenge, has evolved. They discussed how the tight labor market has intensified competition to hire physicians. In this environment, hospitals and provider groups now have to consider a much broader range of factors during the recruitment process. Surprisingly, the Cheesecake Factory came up — a few times. 

Despite coming from different regions and types of provider organizations, the CEOs on the call — Joe Scopelliti, MD, president and CEO of Guthrie Healthcare, a rural health system with five hospitals across Pennsylvania and New York; Michael Patterson, president and CEO of Davenport, Iowa-based Mississippi Valley Health, which includes a surgery center, endoscopy center and a network of independent physicians; and Tim Dicke, MD, president and CEO of OrthoIndy, an orthopedic practice and specialty hospital based in Indianapolis — all agreed physician recruitment and retention had captured their attention as a top strategic threat.

Physician recruitment and retention: The landscape

It's no surprise provider executives are stressed about recruiting and retaining talent. A 2019 report from Doximity shows physician demand has climbed every year for the past three years. 

Coming from outside the hospital sector, Mr. Patterson and Dr. Dicke are acutely aware of this pressure. Last year marked the first time the number of hospital-employed physicians exceeded independent physicians in the U.S.  

Mississippi Valley Health, where Mr. Patterson is CEO, particularly struggles to compete with hospitals and health systems when it comes to recruiting the next generation of physicians. The network of independent practices and outpatient centers faces stiff competition to attract specialty physicians in particular.

Dr. Dicke echoed Mr. Patterson's concern about the employment of specialists, especially surgeons, by large hospital systems. The trend has essentially duplicated the availability of specialty services, he said, leading to overcrowding and fierce competition in the Indianapolis market, where OrthoIndy is based. He noted large health systems are also able to offer higher initial salaries.

It is in this intensely competitive environment that the CEOs observed a new trend taking hold. Beyond ordinary job considerations like compensation packages or on-call requirements, physicians are considering factors outside the job more seriously in their decision-making process. 

Chasing the Cheesecake Factory

As a rural healthcare provider, Guthrie has seen lifestyle factors become a larger part of a physician's decision to join the system or not, especially over the past three or four years, according to Dr. Scopelliti. These factors go well beyond the job description and scope of the hiring organization. They include characteristics of place: an area's education system, the quality and availability of housing, recreational activities, social events, restaurants and shopping.

Mr. Patterson said he has observed a similar trend, referring to it as the "Cheesecake Factory" issue — that the ability for a healthcare provider to recruit top talent often hinges on local attractions, like whether there's a Cheesecake Factory, Costco or Trader Joe's nearby. National data support this: Early-career physicians rank work-life balance, location and culture among the top reasons they stick with a job.

"It's amazing the number of people that, when they do Google searches about specific communities, look for that kind of a thing," Mr. Patterson said. "If you don't have it, I think it puts you at a reduced position of trying to compete with other markets that do have those types of things in their area," he said. 

While the local restaurant scene may seem beyond a healthcare CEO's control, those on the call said they aren't leaving it up to chance. The CEOs have jumped into action, working more closely with community leaders, local organizations, and municipal and county governments to foster community development. Their efforts bear resemblance to the destination medical center model of community investment, though on a smaller scale. 

Perhaps most famously, Rochester, Minn.-based Mayo Clinic used this strategy to inorganically beef up local cultural offerings, build Rochester's clout, and attract more patients and physicians. For Mississippi Valley Health, this means working diligently alongside the chamber of commerce to draw Cheesecake Factory-like attractions to the Davenport market. Guthrie Healthcare has taken a similar approach with its community revitalization effort, which also examines local school systems, housing availability, quality-of-life initiatives and recreational activities.

"We're about two years in and have had a really nice engagement from all of those folks to lean into the problems of rural America and [make] rural America look more attractive to young professionals," Dr. Scopelliti said.

It's not just chain restaurants

Younger physician candidates are also more interested in how organizations support staff in giving back to the community on an individual basis, the CEOs observed. This checks out — surveys have long shown millennials prioritize corporate social responsibility above other generations.

"What was surprising to us is that [early-career physicians are] putting that into their decision matrix about whether they were going to take the job or not," Dr. Scopelliti said. "Prior to just recently, I wouldn't have put that high enough in the matrix to tilt the decision." 

Candidates ask about medical mission trips and volunteer opportunities. They want to know how they can get involved and if the organization supports that involvement, Mr. Patterson noted. While the trio agreed "it's healthcare; we're already [giving back]," all three of their organizations were involved in doing good beyond what's already inherent to being a community medical provider.

"We provide a thousand jobs to the community. We pay taxes and we're proud of that, and we actually give back to the community" through a philanthropic organization called the OrthoIndy Foundation, Dr. Dicke said. 

The CEOs are pushing more of this work to the forefront during the hiring process. "If the company is known to be generous and to be a community benefit, I think it increases the value of being part of that team," Mr. Patterson said. "You feel good about it even if you don't participate." 

While it's easier to showcase community involvement opportunities, not all aspects of a place can be engineered. Take OrthoIndy's market, for example. "Indianapolis is a great city," Mr. Dicke said. "We have a good living environment. We have the Costcos and the Cheesecake Factories and nothing can be denied there, but it comes down to … well, do I want to live with the weather?"  

Until CEOs have a grasp on that one, Dr. Scopelliti suggested giving recruits a North Face gift certificate as a signing bonus and calling it a day.

More articles on strategy:

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Former GE exec finds way to cut healthcare costs — and US hospitals are out of the equation

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