March 8, 2009

1. Association of Medical School Pediatric Department Chairs (AMSPDC) March 8, 2009 Douglas L. Edgeton Executive Vice President Wake Forest University Baptist Medical Center

2. Agenda I. These Economic Times II. Wake Forest University Baptist Medical Center (WFUBMC) Overview III. Faculty Attrition IV. Recruitment and Retention V. Non-Compete VI. Questions

3. I. These Economic Times

4. II. WFUBMC StructureBrief Overview

5. III. Faculty Attrition

6. III. AttritionFinancial and Non-financial costs • Recruiting. • Lost productivity. • Lost efficiencies of other employees. • Lost revenues. • Increased workload for other faculty members. Various studies have estimated costs at $110,000 To $900,000 per faculty replacement1 1Source: Lowenstein SR, Fernandez G, and Crane LA. Medical school faculty discontent: prevalence and predictors of intent to leave academic careers. BMC Medical Education 2007, 7:37. The financial and non-financial costs of faculty attrition are significant.

7. III. AttritionDepartures from Practice 1Source: Cjeka Search and AMGA 2006 Physician Retention Survey. The greatest “at risk” time frame for departures from a physician practice is within the first 3 years. Percentage of Departures by Tenure With Practice1

8. III. AttritionTrends and Issues • Relative stable attrition rates overall (38%) and among selected subsets. • Assistant professors more likely to leave academic medicine than overall average (43% versus 38%) • Assistant professors more likely to switch medical schools than overall average (13% versus 10%) 1Source: June 2008 AAMC Analysis in Brief, Volume 8, Number 4. The Long-Term Retention and Attrition of U.S. Medical School Faculty. Attrition refers to faculty leaving academic medicine. A recent AAMC study reviewing 10-year attrition rates for faculty from 1980 to 1997 found similar results.1

9. III. AttritionTrends and Issues 1Source: Cjeka Search and AMGA Physician Retention Surveys from 2004, 2005, 2006. Compensation and “fit” within the practice are two of the most commonly cited factors for physician attrition and recent years. Most Common Factors for Voluntary Physician Attrition1

10. III. AttritionTrends and Issues • Lack of constructive and timely feedback from department leadership. • Absence of mentoring. • Lack of reward for / recognition of teaching and clinical service. • Perception of inadequate institutional facilities and services. • Problems balancing family and career commitments. • Lack of strong academic community and satisfying colleague relationships. • Politics / disagreements with leadership. • Workload / lack of academic time. • Low salary. Various studies conducted by individual SOMs revealed fairly consistent predictors of discontent and reasons for leaving academic medicine.

11. IV. AttritionWFUBMC Attrition Statistics

12. IV. Faculty Recruitment and Retention

13. IV. Recruitment and RetentionExecutive Summary • Due to funding pressures on physician practices driven by declining reimbursements and increased operating costs, it is incumbent upon AMC’s to assure that their future is secure by attracting and recruiting new specialist, individuals with an emphasis on high quality care, citizenship, mentorship, research and academics. • Approach is consistent with our business and strategic goals, meets a community need … a well defined recruitment model will enhance our partnership while creating a ‘fair and equitable’ arrangement which emphasizes our areas of excellence while fostering a culture of trust, accountability and respect.

14. IV. Recruitment and RetentionRecruitment Council Fund Principles • Compliance • Clarity • Transparency • Ease of Administration • Positive Working Relationships • Accountability • Community Need • Equitable • Actionable • Eliminate Leverage • Faculty Recruitment • Funding Sources • Philanthropic Support

15. IV. Recruitment and RetentionWFUBMC Funding of the Recruitment Fund • Dedicated fund for the recruitment of top clinical talent helps deliver a promising future for our Medical Center • Goal is to create a $50 million fund. • Seeding the fund with equal, annual contributions from both the Hospital and Medical School. • Aggressive philanthropic goals to support recruitment are being established. These monies will supplement the fund. • Fund managed separate from both organizations financial statements by the University Treasurer. • All requests for support from the fund are required to complete a business justification application that is reviewed and approved/denied by the Recruitment Fund Council.

16. IV. Recruitment and RetentionRecruitment of “Star” Fellows and Residents • Loan forgiveness program – structured as a forgivable loan paid off by working. • Full amount would be forgiven over 5 years. • Amortization schedules suggested – 5% year 1, 10% year 2, 20% year 3, 30% year 4 and 35% year 5. Those before full repayment – must repay balance not written off by work, plus interest. • Targeted Growth Areas. High priority given to our own residents / fellows, but also offered to others outside our program. • $150,000 maximum offered per individual.

17. IV. Recruitment and RetentionRecruitment Council Fund • Community and Medical Center focus. • Targeted to meet Medical Center’s Strategic Plan. • Must meet a legitimate community need: • Health awareness, new services, underserved populations, improved access, training for community providers, et al. • Funds are for ‘start-up’ period only. • Productivity actively managed. What are the general criteria of a request likely supportable by the Fund?

18. IV. Recruitment and RetentionRecruitment Council Fund • The Department must provide at least 20% of the package. • Department must actively manage the recruit to the point of self-sufficiency. • Appointment letter includes “protective covenants.” Special Conditions

19. IV. Recruitment and RetentionRecruitment Council Fund • Created December 31, 2008 • Approved 52 established faculty and 12 stars, 34 whom have arrived by 12/31/2008. • Contribution to the Fund by WFUHS and NCBH: $12.0M • Commitments to recruits = $15.8M • Actual payments = $6.3M <slide pending additional updates> Orthopedics 9 Physicians Pediatrics 11 Physicians Urology 7 Physicians CT Surgery 2 Physician Ophthalmology 1 Physician Neurosurgery 3 Physicians General Vascular 4 Physicians Otolaryngology 5 Physicians Other Specialties 22 Physicians Re-cap of Accomplishments to Date

20. IV. Recruitment and RetentionRecruitment Council Fund Success Stories: • Pediatrics • Revitalized emphasis on Health Education • Emphasis on Research for Pediatric population • Urology • Resignations and Retirements • Recruitment of Visionary Chair • Orthopedics • Precipitous decline was halted • Reenergize existing faculty with new faculty additions

21. Non-Compete (a.k.a. Cost Share and Non-Solicitation)

22. V. Non-Compete ClausesHistory • In the 1990’s WFUBMC began using: • Geographic clause: 26 county service area • 2 year timeframe. • ‘To sue or not to sue’ • Around 2000, WFUBMC these clauses were removed from faculty contracts. • In 2007, ‘Cost Share and Non-Solicitation’ language introduced • To date, WFUBMC has not had occasion to apply the ‘cost share’ provision, but several of these provisions have been upheld in the State of North Carolina as well as other states. Seem to be viewed as more enforceable since they are not ‘preventing’ a physician from providing services to the community.

23. VI. Questions “ Only a life lived for others is worth living.” -Albert Einstein