Demand and Salaries for Physicians 'Have Rebounded Dramatically'

Merritt Hawkins, which is the largest physician search firm in the country, shows strong starting salaries and rising demand for physicians in latest annual report.

After being suppressed during the first year of the coronavirus pandemic, the job market and starting salaries for physicians appear to be rebounding, according to an annual report from AMN Healthcare and its physician search division, Merritt Hawkins.

Demand for physicians slumped in 2020, as health systems and hospitals suspended elective surgeries to accommodate COVID-19 surges and patients avoided healthcare settings because of fear of coronavirus infection. Downward pressure was exerted on physician compensation, and some physicians faced furloughs or reduction in working hours.

AMN Healthcare's newly released 2022 Review of Physician and Advanced Practitioner Recruiting Incentives indicates the worst impacts of the pandemic on physician demand and compensation may be over. "Demand for physicians, and the salaries they are offered, have rebounded dramatically from the height of COVID-19," Tom Florence, president of physician permanent placement for AMN Healthcare, said in a prepared statement. "Virtually every hospital and large medical group in the country is looking to add physicians."

The 2022 Review is based on a representative sample of 2,695 permanent physician and advanced practitioner search engagements that AMN Healthcare and Merritt Hawkins had ongoing or conducted from April 1, 2022, to March 31, 2022. The report has several key findings.

• Physician starting salaries show a rebound from the downward pressures of the first year of the pandemic, with the starting salaries of 14 physician specialties up year-over-year and only three down.
   
• Orthopedic surgeons were offered the highest starting salary for physicians at $565,000.
   
• Pediatricians were offered the lowest starting salary for physicians at $232,000.
   
• Signing bonuses increased compared to the 2021 Review, with the average signing bonus for physicians rising from $29,656 to $31,000 and the average signing bonus for nurse practitioners (NPs) and physician assistants (PAs) rising from $7,233 to $9,000.
   
• For the second year in a row, NPs were the most requested search engagement, which reflects a shift from physician office primary care delivery settings toward more convenient settings such as urgent care centers, retail clinics and telemedicine that employ advanced practitioners.
   
• Nineteen percent of search engagements were for advanced practitioners such as NPs and PAs, which was up from 18% in the 2021 Review and 13% in the 2020 Review. This reflects higher demand for nonphysician clinicians.
   
• Primary care physicians accounted for only 17% of search engagements, down from 18% in the 2021 Review and 20% in the 2020 Review. This reflects the shift from physician office primary care delivery settings toward more convenient settings.
   
• Nearly two-thirds of search engagements were for physician specialists such as cardiologists, neurologists, and oncologists. This likely reflects the impact of an aging population that requires specialty care.
   
• The combined categories of anesthesia providers (anesthesiologists and certified registered nurse anesthetists) accounted for the third highest requested search engagements. This indicates that the number of medical procedures requiring anesthesia, which declined in the first year of the pandemic, is rebounding.
   
• Psychiatrists accounted for the fourth highest search engagements. This reflects the longtime shortage of behavioral health clinicians, which has been exacerbated by the pandemic.
   
• Demand for telemedicine clinicians was strong, with 18% of radiology search engagements for teleradiologists and 15% of psychiatrist search engagements for telepsychiatrists.

Interpreting the data and trends

The increasing number of specialist search engagements relative to primary care physician search engagements represents a significant trend, Florence said. "The market has done a complete about-face. Several years ago, primary care physicians were the priority for most hospitals and medical groups. While many still seek them, the emphasis has shifted to specialists."

After slumping in the first year of the pandemic, demand for clinicians is surging, the 2022 Review says. "During the initial months of the pandemic, the number of search assignments Merritt Hawkins was engaged to conduct declined by 30% year-over-year. For the first time in over 33 years of providing physician search services, we saw a significant number of physicians laid off or furloughed, while some physicians were unable to find jobs coming out of residency. The contrast between then and the completion of our 2022 Review could not be more pronounced. In the last quarter of 2021, Merritt Hawkins was retained to conduct more search engagements than in any other quarter in our history."

The number of physicians expected to leave the profession is alarming, the 2022 Review says. "The U.S. already faced a physician 'retirement cliff' before the pandemic, as close to 30% of active physicians are 60 years old or older. The fallout from COVID-19 is likely to accelerate physician retirements and otherwise drive exits from medicine as physicians become part of the 'Great Resignation' that has seen workers of all kinds leave their jobs."

Market disruptors such as retail clinics, insurance companies, and private investor groups are increasing demand for physicians and are likely to exacerbate physician workforce shortages, the 2022 Review says.

For example, CVS Health, which already has 1,500 Minute Clinics staffed mainly by NPs, is planning to open 1,500 HealthHubs that will shift from the episodic care provided at Minute Clinics to longitudinal care. "CVS has the stated aim of becoming the physician employer of choice, taking advantage of physician burnout and workplace disaffection to attract physicians seeking a more favorable practice model," the 2022 Review says.

Related: MGMA: Physician Compensation Rebounding Above Pre-Pandemic Levels