Former model Judith Berger doesn't look much like a headhunter -- not, at least, to her clients. "I'm never what they expect to see," admits the 36-year-old founder and president of MD Resources Inc., a Miami-based physician-recruiting firm that has doubled in size (to 30 employees) and revenues (to $766,000) over the past year. "Being a non-MD and female, it's not easy establishing yourself. But health care is becoming more of a business. Doctors are realizing that the old-boy network doesn't work for them anymore."
A new woman among the old boys, Berger took her six years' experience with executive search firms and a specialty in medical recruitment and parlayed them into a business of her own. With financing from her parents, she set off in 1979 to recruit doctors for hospitals, universities, community clinics, and other medical groups. "None of my [former] clients were told I was leaving, but three of them followed me anyway," says Berger. "Still, we were undercapitalized, and we lost a lot of money in the beginning. We did a lot of work for free."
On the other hand, that free work helped build Berger's reputation, a reputation that became her most valuable asset as competition in her field grew more fierce. In 1973, there were 3 physician search firms; today, there are nearly 50. "It's a growth I wouldn't have predicted," says Dr. Donald Fisher, executive vice-president of the American Group Practice Association (AGPA). The 40% increase in the number of practicing physicians over the past two decades "should mean there are plenty of doctors," but, he says, the demand for quality and cost-effectiveness is forcing group practices to keep staff generating revenues by doing what they do best -- practicing medicine -- and leaving the resume-reading and screening to someone else.
That is where Berger's firm comes in. MD Resources was recently chosen by the AGPA (representing 17,000 physicians and 300 group practices) to do all its recruiting. Berger predicts the endorsement will give her "at least 20" new clients this year.
Typically, clients pay MD Resources a flat fee of $18,000, a third of which is paid up front. Another third is collected within 45 days, the remainder when the search is completed. Berger deliberately chose not to follow the common practice of charging a commission, usually about 30% of a recruit's starting salary. In her case, that practice would pose a potential conflict of interest, since she also advises medical groups on how much they should pay their physicians.
"I never wanted to be this big," Berger avers, "but there is such a demand for our services. Now I delegate almost everything else and do what I do best, which is marketing." Berger's top management team includes an industrial psychologist, a former administrator of a group practice, and an organizational psychologist.
But while Berger may have been content to keep MD Resources small, she is not one to let business opportunities slip by. Recently, she formed a partnership called Health Management Resources Inc., a service company that recruits clinic and hospital management, and she has become half-owner of National Health Search Inc., a reference center for doctors looking to move on. What was the lure of starting another company? "I thought I'd better do it before somebody else did," she says. No second opinion seems necessary.