Higher pay isn’t fixing the staffing crisis in medical practice

Staffing pressures are hitting physician practices from every direction in 2026. Rising minimum wages, aggressive competition from large health systems and persistent turnover are driving up costs, but higher pay alone isn’t stabilizing the workforce. For small practices and rural hospitals operating on thin margins, the result is growing operational strain that often lands directly on physicians.

Medical Economics sat down with Rihan Javid, D.O., J.D., a psychiatrist and co-founder and president of Edge, to explore how staffing challenges are playing out on the ground. In the conversation — featured in a recent episode of “Off the Chart: A Business of Medicine Podcast” — Javid discusses why certain roles are becoming harder to replace, how frequent turnover disrupts workflows and revenue, and what practice leaders should be rethinking as they plan budgets and staffing for the year ahead.

He also explores why flexibility — including remote staffing solutions — is becoming a critical tool for practices trying to adapt to a rapidly changing labor market.

The following transcript was edited for style, brevity and clarity.

22 states have plans to raise their minimum wage in 2026. From what you’re seeing, how is that actually landing inside physician practices and health care organizations?

A lot of physician practices and health care organizations run on very tight margins, especially rural hospitals and small physician offices. When minimum wage goes up by 10%, 15% or 20% — which we’re seeing in some states — that can hit pretty hard.

In some states, minimum wage is increasing by $3 over a year or two. That can be a 25% or even 30% increase. Unless a practice has planned for it and really thought about it, it can have a big impact. We see about 50% of practices planning and budgeting for it, and the other 50%, including small practices and rural hospitals, getting hit hard and saying, “This is destroying our budget.”

It’s great for workers. Staff work really hard. Sometimes one person is doing the job of two or three people. When people get sick, the work still has to get done. Patients are still coming in. So it’s good for staff. But unless practices plan for it, it can be a big impact.

Many health care organizations already pay above minimum wage for most roles. Why are they still losing people as wages rise?

Minimum wage really isn’t enough for health care. I’m in California, where minimum wage is around $16.50 or $17 an hour. But for health care workers at organizations with 50 employees or more, the minimum wage is actually $25 an hour.

That’s just the bare minimum. Small practices and rural hospitals are competing not just with each other, but with large systems — University of California health systems, the state, universities in Texas, Baylor, Rice. They may only pay $2 or $3 more per hour, but they also offer pensions, 401(k) contributions and benefits.

So that $25 an hour can quickly turn into $30 plus benefits, which can be another $5 or $10 an hour. All of a sudden you’re competing with organizations paying $35, $40 or $45 an hour. That becomes very difficult for small practices to keep up with.

When staff leave for relatively small pay increases elsewhere, what roles are practices having the hardest time replacing?

I don’t know if it’s just one role in particular, but some roles are definitely more critical than others. Patient-facing roles are very important. If you don’t have medical assistants to check patients in, patients back up in the waiting room, they’re unhappy, and that frustration moves downstream.

Billing roles can be just as critical. You can still see patients, but if bills aren’t submitted on time, you don’t get reimbursed. Then you have trouble paying staff and covering expenses.

So it’s not really one role. It’s a combination. Some specialized roles — billing, coding, claims submission, prior authorizations — can be especially hard to fill. Overall, staffing across the board is tough.

Practices often respond to staffing shortages by bumping pay, only to find themselves back in the same position just months later. What’s happening there?

Yeah, all the time. You increase pay by $2 an hour. The practice down the street loses staff, so they increase pay by $2 or $3. Then you have to increase it again. It goes back and forth.

The answer isn’t always just raising salaries. You have to have a good work environment and be employee-friendly. But people will leave for an extra $1 or $2 an hour — and $2 an hour is about $4,000 a year, which is significant. They’ll also leave for a shorter commute.

What you really want is a core workforce — whether in person or remote — that you know will be with you long term. If you have 10 staff members, you want six or seven who will be with you for the next three to seven years. If one or two transition out, that’s manageable. But if you’re losing six or seven people a year, the practice won’t succeed.

What day-to-day operational problems do physicians feel first when turnover becomes a problem?

Physicians end up with more work on their plate. Medication refills, prior authorizations, billing — tasks staff used to handle get pushed onto the physician.

If billing isn’t done on time, reimbursement is delayed. All of that starts to fall on the doctor, and we see that happen a lot.

As practice leaders look ahead to the rest of 2026, what staffing or budgeting assumptions need a second look?

You have to have a flexible budget. You need to look at minimum wage, market wage and living wage. In health care, market wage and living wage are often the same.

You also need to budget for pay increases. If you don’t, you’ll lose people, and it’s much cheaper to retain and retrain staff you already have than to interview 10 people to hire one.

If you had to give physicians one piece of practical advice on retention right now, what would it be?

Treat employees well and pay them well. That goes a long way. Be clear about job duties so expectations are clear and surprises are limited as much as possible.

If bumping pay isn’t always the answer, what’s the appropriate response when staff leave for higher wages?

First, look internally. Are people leaving just for pay, or are there internal issues? Pay increases happen everywhere, but internal problems need to be addressed.

Second, look at your community. A lot of times there just aren’t enough people to hire locally. That’s when practices need to look externally. We’re seeing more practices turn to remote employees, both in the U.S. and internationally.

Some practices need Spanish-speaking staff who can handle billing, scheduling and patient communication. Remote staffing can help fill those gaps. The goal is building a core group you know will be there for the next three to five years.

This isn’t pre-COVID health care anymore. It’s 2026, and practices have to plan differently.

Is there anything we missed?

It’s important for practices to look at which roles can be remote and which need to be in person. Some specialized roles, like billing, can often be handled remotely.

As turnover happens — and it will — practices should be prepared to move roles, move resources and stay flexible. That flexibility helps a lot.