Physician compensation is on the rise as provider organizations try to attract more doctors in a tight labor environment.
The industry is still responding to post-COVID-19 pandemic market dynamics, according to companies that responded to Modern Healthcare’s 2023 Physician Compensation Survey, which analyzes data from nine staffing and consulting firms. As patients return for deferred procedures, burned-out doctors are taking a step back from work and students are rethinking career options, creating supply-demand mismatches.
Find the full survey results here.
To recruit more physicians, providers are turning to higher base salaries, in addition to sweetening the deal with signing bonuses or educational opportunities. Productivity remains the largest factor in calculating total compensation, but employers are also incorporating quality metrics.
Here are five takeaways from this year’s Physician Compensation Survey.
1. Employers are upping the ante for incentives.
Hefty signing bonuses and other incentives—such as student loan repayment programs, relocation packages, more flexible work schedules and additional medical education opportunities—play a key role for employers looking to attract and retain talent.
Leah Grant, interim president of AMN Healthcare Physician Solutions, said she has seen employers offer signing bonuses up to $300,000 for medical director positions.
“In all my years of recruiting, this year I’ve probably seen the most significant numbers,” Grant said.
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Healthcare staffing firm Pacific Companies reported in this year’s survey that it has seen $100,000 to $200,000 signing bonuses in rural areas. Such bonuses are often awarded over multiple years.
Some employers offer housing stipends to help physicians relocate in tight real estate markets, said David Rubio, executive vice president at Pacific Companies, while others give lump sum amounts to physicians joining their team, with autonomy as to how the money is used.
2. Paychecks reflect quality metrics—sometimes.
As with previous years, quality measurements such as patient experience scores or timeliness in receiving care are being incorporated into physician compensation, as provider organizations continue to adapt to heightened public expectations.
Still, such metrics only account for 8% to 10% of total compensation for employed staff-level physicians across specialties, estimated Dave Hesselink, managing principal at consulting firm SullivanCotter.
Quality measures can be influenced by several factors outside a physician’s control, in contrast to the straightforward calculations for productivity measures. Timeliness of care, for example, largely depends on resource availability or the number of practicing physicians in an area.
Some employers are offering higher base salaries to give physicians the support needed to focus on quality, AMN’s Grant said.
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3. Primary care physicians are in demand.
More advanced practice providers such as nurse practitioners and physician assistants have been tapped to fill in care gaps at urgent care centers, retail clinics and other sites, consultants and recruiters say. But demand for primary care physicians remains high in some areas.
AMN’s Grant said the growing number of advanced practice providers is not materially impacting physicians’ salaries, but it could affect how many doctors are hired at a practice.
Pacific Companies’ Rubio said geography and local policy can make a difference in terms of primary care needs.
“Some [advanced practice providers] have more autonomy than others,” Pacific’s Rubio said. “In Wyoming, for example, nurse practitioners, they almost function identically to a physician as far as prescriptions that they can write and having their own patient panel. But that’s not every state in our country, so it’s a bit of a case-by-case [scenario].”
In general, total compensation for primary care physicians rose in the past year, SullivanCotter’s Hesselink said.
Mark Ryberg, physician workforce practice leader at SullivanCotter, said the Centers for Medicare and Medicaid Services is shifting reimbursements in favor of outpatient care. He said he thinks the trend speaks to primary care’s value and its impact on the overall cost of healthcare.
4. Provider organizations are trying to attract specialists.
An aging population is driving strong demand for specialty care, leading to increases in compensation.
“A pervasive theme in the market right now is this incredible tension between supply and demand, and we’re really starting to see—especially in some of the low-supply and/or aging populations in certain specialties—the impact that is starting to have in terms of an upward pressure on compensation as physicians start to debate whether they want to continue at this pace,” Ryberg said.
Many hospital-based specialists and behavioral health clinicians saw pay bumps over the last year, according to consulting and recruiting firms. Anesthesiologists, for example, are highly sought after, with average base salaries increasing 12.5% year over year, AMN Healthcare reported in this year’s Physician Compensation survey in conjunction with its subsidiary Merritt Hawkins.
Radiologists, obstetricians and gynecologists are also in demand, according to AMN’s Review of Physician and Advanced Practitioner Recruiting Incentives released earlier this summer. AMN and Merritt Hawkins reported an average base salary increase of 3.7% among radiologists and 10.5% for obstetricians and gynecologists in Modern Healthcare’s survey.
5. But some specialists are still hard to recruit.
Recruiters still have trouble filling some roles, even with such compensation boosts.
Provider organizations want more behavioral health specialists, especially as insurance coverage improves for these services, Hesselink said.
Dermatologists and ear, nose and throat specialists are hard to recruit, as those clinicians are more likely to shop around for higher offers because of the economic value they bring to provider groups, Rubio said.
Grant said she thinks urology and psychology professionals will become harder to find, in part due to the aging population. The recruiting challenges will depend on the market, however, and how much employers are willing to offer, she said.
