In response to a recent article in Becker’s ASC Review listing the 2024 numbers making physicians nervous, we examined the issues from the perspective of physician recruiters. From insurance reimbursements to the hidden costs of joining a practice, here’s a look at the numbers and healthcare industry concerns impacting physician recruitment.
Medicare
Once again, the Centers for Medicare and Medicaid Services (CMS) proposed reducing fees paid to providers. Known as a multiplier or "conversion factor," CMS publishes the amount it reimburses providers for treating patients covered under traditional Medicare. CMS proposed reducing fees by 2.8% in 2025. This is on top of the 2024 fee schedule, which reduced reimbursements 3.4% less than what it was in 2023. Overall (when adjusted for inflation) there has been a 29% decline in Medicare physician payment since 2001, making many physicians feel like they’re getting paid less but being regulated more.
Physicians looking for new opportunities are likely bogged down with a myriad of challenges, in addition to reimbursements, when dealing with CMS as well as commercial insurance companies on top of other regulations imposed on them by their organizations. During the recruitment process, be transparent about how money is generated, how much of their salary will be dependent on insurance reimbursements and what would be expected of them in terms of navigating the codes and paperwork required by CMS and commercial insurance companies. It might be helpful to have examples of the average fluctuation of compensation among other physicians.
Physician independence
Historically described as the cornerstone of the medical profession, traditional private practices are slowly disappearing. From 2019 to 2021, more than 108,700 physicians left private practice for other employment opportunities. In fact, 77% of all physicians in America are employed at hospitals, health systems and corporate entities, according to a report from Avalere Health. Of the existing physician practices, 58.5% are owned by health systems or corporations as of 2023, according to research by the Physicians Advocacy Institute and Avalere. Many other private practices have adopted direct care and concierge medicine models, in which they have a limited patient base and don’t accept Medicare, Medicaid or most commercial insurance companies.
Money is a big concern for a remarkable number of physicians, regardless of whether they’re employed or run their own practice. According to recent report by Medical Economics, 36% of licensed physicians earned extra income from side gigs. These include consulting, teaching, market research, speaking engagements and appearing as an expert witness.
Physician recruiters trying to fill roles in a private practice should be prepared to discuss the organization’s stability. Recruiters at larger organizations should be prepared with data about local practices and why working at the larger facility is better for longevity, job security and broad range of clinical cases.
To address the concern about needing to earn extra income, recruiters should be transparent about the likelihood of increasing the recruit’s compensation. If it is not possible, don’t leave it there and risk losing a candidate. Instead, be prepared with helpful information, such as contacts at a nearby medical school, or with agencies who book medical consulting work and speaking engagements.
Power
Spending and negotiating power are the basis for more physician concerns. As with any business, the healthcare industry has significant costs. While some costs, such as malpractice insurance, are stable, others are rising. For instance, the cost of medical and surgical supplies increased 82% from 2022 to 2023, according to a report released from the Medical Group Management Association. Other modern costs of medical practices, such as telemedicine, can cost between $25,000 to $100,000 to fully set up and implement.
When talking to physician candidates, discuss the negotiating power of the negotiation. Include examples such as any role the organization might have played in changes to local or federal regulations. Explain how too often, individual physicians have no weight against insurance companies. If the physician candidate has already experienced this and is feeling defeated, let them know they are not alone. Nearly 80% of physicians who left private practice reported they did so because they need better leverage in negotiating reimbursements from insurance companies, according to a report from the American Medical Association.
Lawsuits
Lawsuits can be emotionally, professionally and financially debilitating, which is why recent numbers regarding litigation has physicians nervous.
CMS has aggressively pursued violations of the Stark law, a 1989 federal rule that prevents doctors from referring patients to entities in which they have a financial stake, such as labs, hospitals or pharmacies. In 2023, CMS claimed $12.6 million from Stark law settlements, a 552% increase from 2021.
Lawsuits by patients are also on the rise. According to a 2022 study by the National Library of Medicine, 1 in 3 clinicians will be sued for medical malpractice during their careers.
If malpractice insurance is part of the physician’s compensation package, be prepared to share how much and under what circumstances. Similarly, if your organization provides other forms of legal support, make sure you fully understand what the organization offers, and be transparent about its inclusion in the contract or if it’s a service provided on a case-by-case basis. If the practice doesn’t cover malpractice insurance, physician candidates may be concerned if their compensation will be enough for them to afford their own coverage and legal teams.
Georgia Scott
