Best of 2024: Physician job market: Doctors on the move

The physician job market: ©Fizkes - stock.adobe.com

Editor's note: 2024 has been a year of innovation in primary care, from advancements in artificial intelligence to the growing role of value-based care. As we close out the calendar year, our "Best of 2024" series highlights Medical Economics' coverage of the past year's health care trends that have paved the way towards better patient care.

The population is aging, the demand for medical services is increasing and the need for skilled physicians has never been higher. Across specialties and regions, job openings for physicians are proliferating, offering solid prospects for both seasoned practitioners and those just embarking on their medical careers. As hospitals, clinics and health care organizations strive to meet the escalating demand for care, salaries for physicians are steadily climbing, reflecting the critical role they play. In fact, the entire job market is changing from what were the norms just a few years ago.

“It’s changed dramatically, especially since COVID[-19] onward,” says Leah Grant, president of AMN Healthcare’s Physician Permanent Solutions division (formerly Merritt Hawkins). “We’re seeing that from our in-demand specialists, we’re seeing the most in-demand requests from hospital systems groups, and we’re even seeing a change in who is recruiting. Recruiting is still extremely hot in the sense of you now have more players in the market targeting the same group of physicians.”

In the past, most physicians were recruited by either a hospital system or a private practice. Now the market has changed and physicians are also being recruited by insurance companies, private equity groups, urgent care centers, retail clinics, federally qualified health centers and telemedicine groups, who are all recruiting from the same pool of candidates, notes Grant.

“Recruitment is at its peak right now,” she says, adding that all aspects of recruiting are changing. “We’re seeing changes within compensation models, we’re seeing changes in demand and who is requesting what and we’re seeing some incentive trends that are breaking records compared to when we started tracking incentives back in 1991.”

And all the trends are favoring physicians. Here’s what physicians need to know about the current job market.

The physician shortage impact on the job market

Primary care is seeing the same job market effects from the physician shortage as the other specialties – everyone is hiring, according to Helen Falkner, regional vice president, recruiting, Jackson Physician Search. And with the shortage expected to worsen, the demand for primary care physicians will continue to be high in future years.

A look at the numbers for family medicine illustrates why the demand will likely remain high for primary care. There is no surplus of family medicine physicians now, and there are only about 3,200 family medicine residents entering practice each year. According to Falkner, only about 7% of practicing physicians will make a job change in any given year, which creates a candidate pool of about 10,800 physicians, but that is for the entire United States. Divide that pool by 50 and you get about 200 family medicine physicians per state. When you start applying filters based on individual physician needs, the pool shrinks further.

“Are they interested in hospital medicine? Do they have some other sub-specialty interests that they want to pursue? What do they want in a call schedule, a general schedule, compensation, loan repayment needs, geographic preferences, spousal or family needs, visa requirements? Then your pool … shrinks to single digits by state,” Falkner says. “Then you look at the open number of family medicine jobs in the United States and there are almost 3,000 open jobs. So the market is incredibly … competitive and that’s been the case for a very long time – and we see this with almost all specialties.”

In fact, some employers may just be giving up on their search efforts.

“One of the things we noticed in some of last year’s data is that we’re seeing increases now in the number of positions that are cancelled or put on hold, which sort of gives us some indication that perhaps the search is taking too long,” says Carey Goryl, CEO, Association for Advancing Physician and Provider Recruitment, the professional organization for in-house recruiters.

“Employers might be abandoning the search or putting it on hold indefinitely. The number of physicians entering the workforce is not enough to keep up with the growth in demand, and we haven’t made enough progress in our immigration policies that would allow for a greater influx of international medical graduates or foreign-born physicians to be able to practice in the United States.”

Goryl adds that this means doctors can be more choosy about their positions. Many job seekers want more work-life balance and greater flexibility and don’t want the long hours physicians have traditionally worked. The employers that cater to this are more likely to find a match.

How the increase in NPs affects primary care jobs

As the number of nurse practitioners (NPs) and other advanced practice providers (APPs) increases, many primary care physicians think their job opportunities may be shrinking as a result, but experts say that is not the case. There is just too much need for primary care and not enough providers.

“I think the demand is always going to be there,” says AMN’s Grant. “With the rise in demand for urgent care centers and retail centers that are largely staffed by an [APP], the demand for primary care providers, I won’t say decreased, but fell flat when you look at the numbers because those for APPs have now been increased. But it’s still our No. 2 requested specialty.”

Falkner says primary care doctors have nothing to worry about when it comes to employment prospects.

“We have an aging population that is getting sicker, and the demand continues to grow in metro markets [and] suburban and rural markets,” says Falkner. “The most underserved [population] does tend to be rural, and that’s where we see the greatest utilization of nurse practitioners. Typically, the reason that occurs is because it’s so difficult to recruit a physician to those markets, and those hospitals have to utilize nurse practitioners to be able to provide adequate care and coverage for their patients.”

Liz Mahan, director of professional development and solutions, Association for Advancing Physician and Provider Recruitment, agrees that in many cases, employers have no choice other than to hire NPs because they can’t find physicians to work in their area.

“The number of physicians [who] are coming out of residency in internal medicine and then following a primary care track is limited and it’s never going to meet demand,” she says. “Organizations still need to figure out how to staff practices with providers to meet the demands of patients.”

But overall, she says there is no concern that organizations will stop looking for primary care physicians or seek to replace them with NPs and physician assistants unless they are faced with no other choice.

Who is hiring?

Not long ago, primary care physicians either worked in private practice or worked for a hospital-owned practice. The options have increased dramatically as more players have entered the primary care space. Retailers like CVS and Walgreens have entered primary care, as has Amazon via various partnerships. Urgent care centers are on the rise, and telehealth is bigger than ever.

“So you have a new front door to the health care system where many patients now have an option of where they’re going, but with these options, we of course have to staff them up accordingly with the providers,” says Grant.

Also new to the space are private equity firms, which are buying up practices.

“Between 2019 and 2022, there was a 9% increase in the number of hospital-owned physician practices, but in the same time frame, there was an 86% increase in the number of corporate-owned physician practices, and private equity spent about $260 billion on 1,400 health care acquisitions in 2021 and that increased in later years,” says Grant. “Private equity practices are popping up where now they also have the demand for physicians – it’s no longer just hospitals or private practices – and you now have a ton of different competitive groups all inside the same pool of providers seeking to pretty much fish in that same pool.”

Although private equity’s growth numbers are large compared with other segments, they were also starting from scratch, unlike hospitals and health systems. Falkner says that although private equity firms are part of the hiring pool, it is still hospitals that are doing the bulk of the hiring.

Goryl adds that although her organization doesn’t specifically track private equity trends, any organization in a growth stage is going to be hiring. And whereas the big growth numbers for private equity look great, there can also be a downside.

“One of the things we sort of hear anecdotally is that when it comes to private equity, they sometimes are also the quickest to lay off,” says Goryl. “So just because they are hiring doesn’t always mean they are keeping.”

What is happening with salaries and incentives?

Basic economics says that when demand outstrips supply, prices go up. With a physician shortage that is getting worse, that basic principle has mostly held true. Falkner says that she has been recruiting physicians for 12 years and that the majority of organizations are offering starting salary guarantees at or above the Medical Group Management Association median. Many compensation models are base plus production, or base plus production plus some sort of quality or citizenship bonus.

“I think a lot of organizations feel the pressure to fund their compensation in one of the highest percentiles in order to be competitive,” says Goryl. “We look at the data from many of the compensation sources out there, and those that we follow show that yes, pretty much across the board, compensation is increasing.”

This also works to a physician’s advantage in another way: The need to negotiate salary may not be required.

“Maybe a few years ago, there would be a little bit of negotiation, but now, the market is so competitive that if an organization is making an offer to a physician, that offer is almost always the best offer that they can put on the table,” says Mahan.

The wage disparity between primary care and other specialties is well known, but is the increasing demand for primary care closing that gap?

“No, it’s just a sad reality,”
Mahan says.

Overall, salaries are on the rise, but that is not all: The value of incentive packages being offered are also increasing. Falkner says that a decade ago, some sort of sign-on bonus and relocation package, and in some cases student loan repayment, was fairly standard.

“What we’ve seen really in the last two to three years has been this move toward a substantial recruitment package, where in a lot of cases it’s six figures,” says Falkner. “And in fact, last year, about 55% of our family medicine placements had recruitment packages that were $100,000 or greater, and 65% had signing bonuses or recruitment packages that were $50,000 and greater.”

She says organizations are creative in how they can help entice physicians. Maybe they will pay rent while the doctor looks for a permanent home, or offer flexible schedules and more paid time off – and some have offered additional paid time off for mission work or sabbaticals.

AMN’s Grant says that 62% of openings they handled offered some relocation allowance, with the average amount being $12,000, but it has gone as high as $150,000. Signing bonuses were offered by 63% of client organizations, with an average of $37,473 and a high of $570,000. A continuing medical education allowance is also a common incentive, with 93% offering the perk.

“More and more organizations are also looking at the retention side of things on how they keep providers, and sometimes that means longevity bonuses or incentives to stay with the practice,” says Mahan. “We’re starting to see organizations evaluate how they address work-life balance, so maybe they are offering flexible schedules or reduced clinic hours or an option to do telehealth in addition to in-person visits. Five years ago, those were perks that weren’t considered or discussed.”

The overall trends are definitely in favor of physicians and appear to be improving, says Falkner. “In the 12 years I’ve been doing this, year over year, physician comp[ensation] across the board continues to climb. It may be relatively flat some years, year over year, but generally speaking, it seems like the salaries are getting higher and the packages are getting more generous.”

Find the right fit for you

The demand for physicians may be at an all-time high and the dollar figures being bandied about can be eye-popping. But recruiting experts recommend you consider all the factors before making a decision about a job, including what makes you happy about practicing medicine.

“A lot of primary care offices are moving toward a team-based care model – is that something that is of interest to you as a provider?” says Mahan. “Another consideration that is a driving factor in physician job satisfaction and burnout is the support staff that a practice or an organization can offer. It’s important to look at a full picture of the practice, then get a full understanding of how the day-to-day [setup] works.”

Grant agrees, saying it’s most important to find the right practice that is the best long-term fit. “It’s really a question of narrowing down your options to finding what really matches your personal and professional needs,” Grant says. “It’s a buyer’s market for doctors; I can’t think of another profession where there are 100 recruiters trying to get ahold of you while you’re just about to get out of training. So you have a pretty good opportunity today to find specifically what you are looking for through a careful diagnosis of the market. Just like you would diagnose a patient, just diagnose what is out there and be very thoughtful about how you proceed. If you feel like you want to make a change, this is a good time to do it.”