In May 2020, the American Hospital Association released a report estimating that between March 1 and June 30, 2020, hospitals and health systems across the country will experience over $200 billion in losses because of COVID-19 expenses and lost revenue.
How will that impact physician job seekers?
Throughout this time, I’ve been on conference calls with in-house physician recruiters from hospital systems and large medical groups all over the country. We gather in national, regional and specialty professional groups on virtual meeting platforms like WebEx and Zoom to share best practices. Every call starts with a check in to share what is going on in our facilities and groups.
A handful of hospitals in unaffected areas are operating and hiring as usual, with just a pause in onsite interviews due to travel disruptions. Some health care systems in hard-hit areas closed practices and laid off physicians and staff. A lot of recruiters reported furloughs and pay reductions for physicians and staff as well as temporary shutdowns for clinical and administrative offices. Every single recruiter reported that their hospitals revisited their 2020 budget and revised physician recruitment planned expenditures for the remainder of the year and began adjustments to 2021. Even facilities that had not admitted a single COVID patient prepared for the lost revenue and expenses they would experience if the virus spreads in their community.
That said, we are all confident that physician hiring will recover long before other parts of the economy.
Here are a few of the impacts we saw as our health care systems’ leadership teams wrestled with the pandemic.
•COVID Cancel was a quick end to positions tied to new site expansions, new service lines or recruitments requiring major capital investments. Not "never," just not this year, not early 2021.
•Hold was a continuum - hold this one for 60 days. Revisit that one in 90 days. Look at this again at 120days. Facilities want to fill positions, but they don’t want to start new physicians until they know volumes are rebounding and patient confidence is strong.
•Push it Back was the directive for many retirement backfills. Whenever late-career physicians’ 401(k)s suffer, they second guess retirement timing, preferring to wait until retirement accounts recover before hanging up the white coat. This was bad news for 2020 residents and fellows who had interviewed and were working on contracts when the pandemic hit the community they hoped to join.
•Reduce It was one tactic to move forward within a drastically slashed budget. Full-blown hospital system income guarantee packages were reduced significantly. Large, established private practices helped reduce the burden on the hospital. Practice partners agreed to sacrifice perks like CME travel. Groups deferred bonuses in order to cover their new physician salaries during ramp up. Many graduating residents lost sign-on bonuses to the virus.
•Proceed as Planned was the welcome directive to continue with contract development for physicians recruited to practices with volumes unaffected by the pandemic.
The AHA number bears repeating: $200 billion in losses due to lost revenue and COVID expenses between March and June 2020. Going forward, hospitals and private practices are proceeding very, very cautiously. Some thoughts for physician job seekers in the pandemic physician job market:
•If they can, they should consider another year of fellowship or stay in the job they have until we are firmly in recovery. Any time employers are experiencing uncertainty, they react by tightening reigns on sign-on bonuses and starting salaries. Physicians’ negotiating position will improve when the economic indicators are strong and patients once again feel safe in hospitals and medical offices.
•Don’t leave a job without signing a contract for their next job. Pre-COVID, physicians in high-demand specialties were accustomed to leaving a job if they got mad at administration or just were not as happy as they thought they should be. "I’ll do locums or work PRN," they thought. When locums demand drops off and nobody is hiringPrn, those physicians are unemployed and ineligible for unemployment benefits.
•Keep multiple irons in the fire until they have a contract. In this hiring environment, it may not matter how fabulously a physician interviews or how great their references are. If patient volumes are not recovering quickly enough in the market where they interviewed, administration will hit the brakes.
•Defer the gratification of buying the biggest house, the nicest car. There will be a time to stretch, but this is not that time.
•A contract might not be what they hoped, heard or thought it would say. In times of financial uncertainty, employers are more conservative. Physicians should have a health care attorney review the formal draft so that they thoroughly understand if, when and how the contract could be rescinded or terminated.
•Understand that the starting salary, sign-on bonus and education loan repayment deal senior residents and fellows got pre-COVID is not relevant to what employers will be offering today. Candidates in 2020 are competing with a much larger than normal pool of displaced mid- and later-career physicians who lost jobs or are moving for personal reasons. There will be more physician candidates competing for a smaller pool of jobs.
Despite disruption today, our country still needs many more physicians than we have in the pipeline. The challenges and disappointments for this year’s job seekers will eventually be a blip in a successful career.