Workforce issues Concerning trends in primary care physician demand and compensation Merritt Hawkins report shows skyrocketing demand for nurse practitioners while the demand for family physicians dropped. Nov. 18, 2021Thursday Seger S. Morris, DO, MBA Contact segermorrisdo Facebook Twitter LinkedIn Email Editor’s note: The views expressed in this article are the author’s own and do not necessarily represent the views of The DO or the AOA. COVID-19 altered the supply-demand curve in many professions, and health care is no exception. Physicians, nurse practitioners and physician assistants alike saw significant changes in demand for their services based on geography, specialty and other factors, according to a recent Merritt Hawkins report on health care professional recruiting incentives. Importantly, this review provides a better indicator of the demand side of the economic curve than other compensation-based surveys (such as the Medical Group Management Association’s and the American Medical Group Association’s) because this Merritt Hawkins review focuses on the starting salary (as opposed to actual earnings), sign-on bonuses and other incentives that are offered to recruit clinicians to take on new roles. Broad COVID-19 impact on health care Salaries of physicians in a growing number of medical specialties are subsidized by hospitals and other large medical groups that have historically been positioned to recover those subsidies via other services (such as hospital stays, diagnostic testing, and procedural services) that generate excess revenue. Hospital medicine is the most common example: according to the 2020 State of Hospital Medicine Report by the Society of Hospital Medicine, the average hospitalist group practice receives a subsidy exceeding $170,000 per full-time hospitalist. This trend in increasing subsidies in the face of impending cuts to physician pay rates by CMS is fueling concerns that we’re in a physician compensation bubble. Meanwhile, many reports document the fact that health care as a whole was adversely impacted by the COVID-19 pandemic due to decreased use of surgical, diagnostic and elective health care services. Evidence suggests many patients delayed essential health care services due to concerns of contracting COVID-19 in the health care setting. Naturally, this resulted in an overall decreased demand for physician and other clinician services. Faced with decreased use of services in the setting of increasing subsidies, there were many reports of physician layoffs and cuts in salary during the early months of the COVID-19 pandemic. The most concerning trend for primary care and hospitalist physicians, however, is that this Merritt Hawkins report suggests physicians are being replaced with nurse practitioners as demand for services begins to return. The AOA is engaged in multiple efforts to combat nonphysician clinician scope of practice expansion efforts. A closer look at the data One year does not represent a trend; however, when viewed in the context of the macroenvironment outlined above along with the five-year trend line in the graph below showing positions recruited, the demand for family medicine, internal medicine, and hospitalist physicians is clearly slowing. Further exemplifying a decreased demand for these physician specialties is the trend in compensation. Family medicine physicians were essentially flat at a 1% increase year over year, while internal medicine saw a substantial decline of 12%. While the variance was higher this year than in the past, the five-year trends in compensation are upward for nurse practitioners, flattening for family medicine and flat or downward for internal medicine. Slowing demand, or being replaced? A fundamental inquiry at the root of this Merritt Hawkins report is: is the demand for primary care physicians slowing because of the COVID-19 pandemic, or are they simply being replaced by non-physician clinicians? Faced with increasing subsidies, declining (or at least unpredictable) demand for services, a trend toward expanded scope of practice for non-physician clinicians, and progressive pressure for parity in reimbursement rates, it seems hospitals and other large employers may be simply choosing to recruit nurse practitioners instead of physicians. This was likely exacerbated by temporary expansion of scope of practice in many areas due to COVID-19. Not only was the number of searches up 24% year-over-year for nurse practitioners, this was in a year that the overall number of positions recruited was down by 24%. In contrast, searches for family medicine physicians dropped 37%. Other notes Despite extensive data available in this report, many details are unknown, and questions remain. What percentage of nurse practitioners are being recruited for primary care, urgent care, emergency medicine, hospital medicine, or medical/surgical specialties? While it’s common to group all nurse practitioners together, the profession is becoming increasingly specialized, suggesting the need for separate survey data by specialty. This will help better assess shifting demand for types of clinicians in given specialty areas. Notably, there was a significant change in the mix of position type this year, and academic positions were more heavily represented. This may reflect the job security found in academic medicine because of the rigid requirements of accreditors for dedicated faculty regardless of clinical productivity. Due to less reliance on clinical productivity, these positions were less likely to be affected by the COVID-19 pandemic. Additionally, this change may explain some or all of the negative compensation trends for physicians in primary care specialties, given that academic positions tend to have lower compensation than non-academic positions. Primary care physicians who want to best position themselves for employment can consider developing additional expertise in teaching, administration, policy and other areas. This article from 2019 explores some of these options in more detail. 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As long as there is a up-front cheaper alternative with an acceptable margin of risk, most people (and by extension corporations) will choose the cheaper alternative. There are enough studies out there suggesting outcomes are similar, malpractice claims are similar, and lord knows how often we get told NPs are great because you can “make more money and focus on the complex patients.” It makes more sense to hire 4 NP than 3 doctors, dollar for dollar. I love family medicine, but already see myself being shown the door by compassionate bean-counters Nov. 19, 2021, at 8:02 am Reply
Looming on the horizon is AI replacing many of the tasks performed by physicians! Thus, between NPs/PAs, and Artificial Intelligence, the “out” door is opening wider everyday. Nov. 19, 2021, at 6:03 pm Reply
Quality of care will diminish as providers are increased and physicians are replaced. Not going to be safe for the public. But knowing corporate medicine they will always only care about their bottom line. Nov. 20, 2021, at 4:11 pm Reply