Recruiting and retaining talent remains one of the top challenges for healthcare organizations as labor costs rise and patient demand soars.
A growing and aging population, post-COVID-19 physician burnout and a less-than-full pipeline of physicians joining the field is adding pressure for employers struggling to operate in a high-inflation environment with growing expenses.
As a result, employers are taking a harder look at the starting salaries and incentives to stay competitive in the industry, according to staffing company AMN Healthcare's annual recruiting report, released this week. The report draws data from nearly 2,700 searches for physicians and advanced practitioners from April 1, 2022, to March 31, across hospitals, medical groups, academic organizations and other healthcare settings.
Here are five trends to watch.
1. Healthcare organizations want specialists.
Sixty-four percent of AMN's searches were for physician specialists, including radiologists and anesthesiologists, among others. Average starting salaries for specialists were generally up year-over-year, reflecting demand for specialists amid an aging population and employers' heightened efforts to find them. Average starting salaries for dermatologists, for example, were up 22%, while starting salaries for psychiatrists were up 19%. Salaries for orthopedic surgeons rose 12%.
2. Demand for primary care physicians is leveling off.
Seventeen percent of AMN’s searches this year were for primary care physicians, the same as a year ago. Average starting salaries did not fluctuate greatly. Starting salaries were up just 2% for family physicians and unchanged for internal medicine doctors. Pediatricians saw starting salaries rise by less than 1%.
However, the seeming decline in demand for primary care physicians is relative to peaks in recent years, according to AMN. Many healthcare organizations continue to recruit these physicians. Family physicians were the second-most requested position in this year's searches.
3. Signing bonuses and other incentives are critical.
The average signing bonus for physicians was nearly $37,500, compared with $31,000 the previous year. Bonus offers rose as high as $570,000, up substantially from a $400,000 peak a year ago. Nurse practitioners and physician assistants saw bonuses ranging from $2,000 to $25,000.
Other popular incentives are continuing medical education (offered in 93% of employee searches), relocation allowances (62%) and student loan forgiveness (18%).
4. Retail clinics are getting popular.
Large retailers such as CVS and Walmart are aggressively moving into the healthcare space, filling in care gaps left by more traditional providers. About 61.5 million U.S. adults received in-person care at a retail clinic in 2021, and that number grew to almost 80 million in 2022, AMN said, citing an Insider Intelligence study from December.
Retailers typically enter the market via primary care services, given the lower barriers to that entry, but they are also increasingly exploring options to provide multispecialty care. Walgreens-backed VillageMD, for example, recently snapped up Summit Health-CityMD in an $8.9 billion deal to expand its footprint in primary, urgent and specialty care—a move coinciding with VillageMD's rapid clinic expansion nationwide.
5. Private equity firms like physician practices.
Private equity acquisitions accelerated during the COVID-19 pandemic as private physician groups sought financial assistance. From 2019 to 2022, an 86% increase occurred in the number of corporate-owned practices.
Private equity firms are showing the most interest in specialty care such as gastroenterology and urology. Cardiology, radiology and oncology are other areas of interest.
The American Medical Association released a report in July showing fewer physicians are owning practices—44% of physicians did so in 2022, compared with 53.2% a decade ago. Nearly 47% of physicians reported working in private practices in 2022, down from 60.1% in 2012, the AMA report found.