By James Bowden
A large number of the clients I work with are for-profit healthcare companies, and a significant percentage of those clients focus on providing healthcare in non-urban areas. Nonprofit healthcare providers in rural America face a number of very significant challenges, including substantial difficulties in hiring and retaining good physicians and growing amounts of bad debt caused by an unfavorable ratio of patients receiving unreimbursed care to patients covered by private health insurance. For-profit healthcare companies are well-suited to alleviate theses problems. Three of the most notable benefits that for-profit healthcare companies can offer non-urban healthcare providers are (1) access to the capital markets to obtain working capital and cash for necessary capital investment, (2) economies of scale to diffuse back-office costs and management expenses, and, most relevant to this post, (3) more effective physician recruiting and retention programs.
A large amount of thought around recruiting and retention is built around physician compensation, which is a very difficult topic considering the restrictions on physician compensation presented by the federal Stark and Anti-Kickback laws. The impact of these restrictions are all the more important in non-urban healthcare recruiting. Put simply, the economics and the regulatory environment that non-urban healthcare providers operate under restrict the ability to draw talent with large compensation packages. That is why my ears perked up to this story about "mission-focused medicine" at a hospital in Ashland, Kansas. The logic is beautifully simple: physicians that are willing to be healthcare providers in rural America often aren't particularly motivated by money--they are happy to take a pay cut to work in a setting where their help matters to the community. The answer is similarly elegant: the Ashland Clinic now offers eight weeks off to do overseas missionary work. It looks like the plan is working--the clinic has physician staff where it had none prior to the implementation of mission-focused medicine.
What the Ashland Clinic is doing is interesting. Instead of asking how much they are willing to pay for the people that they want, they are instead asking what traits they are looking for in people they hire and what things those people are driven by and recruiting accordingly. The type of people that a company seeks to hire and the manner in which the firm compensates them can have profound effects on the behavior of the employees. I think the most profound example is presented by hotel staff at the Taj Mahal Palace Hotel in Mumbai, India. When that hotel was attacked by terrorists in 2008, hotel employees who had every opportunity to flee with their lives instead stayed to help the guests. The kitchen employees formed a human shield behind which hotel guests escaped to safety; in the process each was shot to death. The general manager kept working to save the hotel patrons even after his family died in the fire set by the terrorists. A Harvard business professor traced the selflessness of the Taj employees to recruitment and reward--the hotel is owned by a family that puts a high value on social justice, and employees are hired from small communities on the basis of their educator's recommendation that the recruits were respectful and empathetic. The employees are then rewarded promptly for acts of kindness towards guests. The unintended consequence appears to be that the Taj Hotel unwittingly hired a staff chock full of real heroes.
So how does this post have anything to do with young lawyers? Well, frankly, our recruiting model doesn't hold up quite as well as those of the Ashland Clinic and the Taj Hotel. I don't think I have to get too deep into it, either, but I think it is pretty safe to say that the lures large firms generally hold out to recruits are generally twofold: money and power. That may be dangerous in a profession where instilling trust and showing dedication are of paramount importance, and selfishness is an Achilles heel. It might also explain the old saying that the best students in law school end up becoming law school professors.