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Bleak Physician Recruitment News for Smaller Markets, Independent Practices

John Commins, for HealthLeaders Media, July 12, 2010

"Under the current structure, primary care salaries are about what they can be," Singleton says. "They are going to go up a little more, but there is just no room. Without massive reform, you aren't going to see a huge difference."

"The more telling stat in this survey is the lows. We always focus on the average, but when you look at the lows, family practice compensation jumped up $20,000 (from $120,000 in 2008-09 to $140,000 in 2009-10) in one year. That is massive considering the total compensation. That tells us it is so competitive out there. There are no more oases. There are no destination cities. Everyone is somewhat on a level playing field, and that is scarier than the average going up."

Fifth, the numbers of physicians abandoning private practice for hospital employment has swelled from a trickle to a stream to a tsunami. "We are seeing it on a scale like never before," Singleton says, adding that the desire for employment is now coming from both physicians and hospitals.

"In the past it's been one side pushing an agenda—the hospital wanting market share," he says. "This time it's the hospitals realizing that to control costs and outcomes as best they can—but also in an effort to control their lifeblood, the physician—you have to have flexibility. And in today's market, there is no flexibility without employment."

As compensation becomes more competitive, Singleton says more hospitals will be even more incentivized to take up the employment model or something similar, especially as accountable care organizations come to the fore.

Synergy of care and bundling are examples of those things pushing down this funnel of employment. "Those larger organizations that have experience in that field are one step ahead," he says. "Some of these other smaller clients that know this is the outcome have never done it before. They are not equipped to employ physicians. If anything, the numbers of employed physicians will shoot up next year because that segment is now forced to join the game."

On the physician side, Singleton says it's a wonder that any private practices are left, especially in light of the ongoing uncertainty over healthcare reform and Medicare reimbursements.

"Think about the year that they just went through," Singleton says. "Imagine coming to work. The rules of the game could change on you at any moment. There is such a lack of stability and a lack of guarantees in their world right now. Anything that can give them both of those areas they are going to do. Employment does just that."

John Commins is a senior editor with HealthLeaders Media.

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