As a result of the coronavirus pandemic and its financial impact, the number of physician recruitment searches conducted by Merritt Hawkins has dropped by 30% since March 31, the firm reports.
“Rather than having many practice opportunities to choose from, physicians now may have to compete to secure practice opportunities that meet their needs,” the authors write in Merritt Hawkins’ report on the impact of COVID-19.
Most of the report concerns physician recruitment from April 1, 2019, to March 31, 2020. The data were mostly derived from searches that Merritt Hawkins conducted before the impact of the pandemic was fully felt.
Family medicine was again the most sought-after specialty, as it has been for the past 14 years. But demand for primary care doctors — including family physicians, internists, and pediatricians — leveled off, and average starting salaries for primary care doctors dropped during 2019 – 2020. In contrast, the number of searches conducted for nurse practitioners (NPs) and physician assistants (PAs) increased by 54%, and their salaries increased slightly.
To explain the lackluster prospects for primary care before the pandemic, the authors cite research showing that patients were turning away from the traditional office visit model. At the same time, there was a rise in visits to NPs and PAs, including those in urgent care centers and retail clinics.
As a result of decreased demand for primary care physicians and the rising prevalence of telehealth, Merritt Hawkins expects primary care salaries to drop overall. With telehealth generating a larger portion of revenues, “it is uncertain whether primary care physicians will be able to sustain levels of reimbursement that were prevalent pre-COVID even at such time as the economy is improved and utilization increases,” the authors report.
Demand for specialists was increasing prior to the COVID-19 crisis, partly as a result of the aging of the population. Seventy-eight percent of all searches were for medical specialists, compared with 67% 5 years ago. However, the pandemic has set back specialist searches. “Demand and compensation for specialists also will change as a result of COVID-19 in response to declines in the volume of medical procedures,” according to the authors.
In contrast, the recruitment of doctors who are on the front line of COVID-19 care is expected to increase. Among the fields anticipated to be in demand are emergency department specialists, infectious disease specialists, and pulmonology/critical care physicians. Travis Singleton, executive vice president of Merritt Hawkins, told Medscape Medical News that this trend is already happening and will accelerate as COVID-19 hot spots arise across the country.
Specialists in different fields received either higher or lower offers than during the previous year. Starting salaries for noninvasive cardiologists, for example, dropped 7.3%; gastroenterologists earned 7.7% less; and neurologists, 6.9% less. In contrast, orthopedic surgeons saw offers surge 16.7%; radiologists, 9.3%; and pulmonologists/critical care specialists, 7.7%.
Physicians were offered salaries plus bonuses in three quarters of searches. Relative value unit–based production remained the most common basis for bonuses. Quality/value-based metrics were used in computing 64% of bonuses — up from 56% the previous year — but still determined only 11% of total physician compensation.
Pandemic Outlook
Whereas healthcare helped drive the US economy in 2018 – 2019, the pace of job growth in healthcare has decreased since March. As a result of the pandemic, healthcare spending in the United States declined by 18% in the first quarter of 2020. Physician practice revenue dropped by 55% during the first quarter, and many small and solo practices are still struggling.
In a 2018 Merritt Hawkins survey, 18% of physicians said they had used telehealth to treat patients. Because of the pandemic, that percentage jumped to 48% in April 2020. But telehealth hasn’t made up for the loss of patient revenue from in-office procedures, tests, and other services, and it still isn’t being reimbursed at the same level as in-office visits.
With practices under severe financial strain, the authors explain, “A majority of private practices have curtailed most physician recruiting activity since the virus emerged.”
In some states, many specialty practices have been adversely affected by the suspension of elective procedures, and specialty practices that rely on nonessential procedures are unlikely to recruit additional physicians.
One Third of Practices Could Close
The survival of many private practices is now in question. “Based on the losses physician practices have sustained as a result of COVID-19, some markets could lose up to 35% or more of their most vulnerable group practices while a large percent of others will be acquired,” the authors write.
Hospitals and health systems will acquire the bulk of these practices, in many cases at fire-sale prices, Singleton predicted. This enormous shift from private practice to employment, he added, “will have as much to do with the [physician] income levels we’re going to see as the demand for the specialties themselves.”
Right now, he said, Merritt Hawkins is fielding a huge number of requests from doctors seeking employment, but there aren’t many jobs out there. “We haven’t seen an employer-friendly market like this since the 1970s,” he noted. “Before the pandemic, a physician might have had five to 10 jobs to choose from. Now it’s the opposite: we have one job, and five to 10 physicians are applying for it.”
Singleton believes the market will adjust by the second quarter of next year. Even if the pandemic worsens, he said, the system will have made the necessary corrections and adjustments, “because we have to start seeing patients again, both in terms of demand and economics. So these doctors will be in demand again and will have work.”
Contingent Employment
Although the COVID-related falloff in revenue has hit private practices the hardest, some employed physicians have also found themselves in a bind. According to a Merritt Hawkins/Physicians Foundation survey conducted in April, 21% of physicians said they had been furloughed or had taken a pay cut.
Singleton views this trend as part of hospitals’ reassessment of how they’re going to deal with labor going forward. To cope with utilization ebbs and flows in response to the virus, hospitals are now considering what the report calls a “contingent labor/flex staffing model.”
Under this type of arrangement, which some hospitals have already adopted, physicians may no longer work full time in a single setting, Singleton said. They may be asked to conduct telehealth visits on nights and weekends and work 20 hours a week in the clinic, or they may have shifts in multiple hospitals or clinics.
“You can make as much or more on a temporary basis as on a permanent basis,” he said. “But you have to be more flexible. You may have to travel or do a different scope of work, or work in different settings.”
