Empty doctors’ offices. Closed emergency departments. Postponed surgeries.
As the COVID-19 virus spread across the country, so too did its effects on medical providers. Fields that historically have been in high demand saw furloughs, while others saw pay cuts and even layoffs as elective procedures were restricted and patients delayed care to minimize exposure to the virus.
Physicians were not immune. Many saw pay or benefits cut. Among them were doctors at Mayo Clinic in Rochester, Minn., which in late April cut physician pay by 10% and physician executive salaries by 15% to 20%, depending on the position, a system spokesperson said. Those reductions lasted just shy of two months.
More broadly, an estimated 18% of physicians treating COVID-19 patients experienced furloughs or pay cuts, while 30% of those not treating COVID-19 patients had their pay reduced or were put on furlough, according to a report by physician staffing firm Merritt Hawkins and the Physicians Foundation.
While it’s hard to predict exactly how the mass reductions will affect long-term physician compensation, pandemic-driven changes in compensation could be harbingers of larger changes in the industry, experts say. If the current surge continues and another mass cancellation of elective procedures occurs, health systems will be less likely to be able to protect physicians financially, said Dave Hesselink, principal at SullivanCotter, a workforce consulting group.
For years, physician compensation had crept upward, and 2019 was no exception. Last year, most specialties saw a 2% to 3% gain, yet there weren’t corresponding productivity increases, Hesselink said.
Many employers that previously considered shifting away from fee-for-service and productivity-based models now may make that leap. Already in 2020, some of the larger health systems have started asking how to realign their compensation models now that volumes have crashed, Hesselink said. “One’s got to consider, as we worry about the economic fragility of the system, ‘Can we really sustain the end result of that model?’ ” said Mark Ryberg, a principal at SullivanCotter.