The COVID-19 pandemic has had an unprecedented impact on the physician job market.
The COVID-19 pandemic has had an unprecedented impact on the physician job market. Medical Economics sat down with Travis Singleton, an executive vice president with Merritt Hawkins, to discuss what physicians need to know as they approach finding a good career fit.
Will the recent trend of physician furloughs and layouts continue? Will health care utilization return? Watch our in-depth interview with Singleton to find out.
The following transcript has been edited for length and clarity.
Medical Economics: How has the COVID-19 pandemic impacted the physician job market?
Travis Singleton: Essentially, it's flip flopped in 60 days. And I don't think that's an understatement to say. We did a survey to final residents, students, medical residents in 2019. And 45% of them were getting over 100 solicitations each year. So to me, it was like they were the number one draft pick a week before the draft. This was the world they were used to. And frankly, the physician space has been robust if you go all the way back to (the creation of) Medicare and Medicaid.
Now we've got words like furlough and layoff and these are not words that physicians are used to hearing. Certainly they're there in other industrial sectors. And I do hear other people kind of give them the ‘welcome to the club.’ We're all laid off, right?
But I like to remind people that not many occupations have over $200,000 of debt just to be able to practice their occupation — and then to be unemployed. So sometimes it's not apples to apples, but it's as if we went from one position looking at 15 different opportunities to literally the inverse, it's 15 opportunities for every one position. And in that, there's no guarantee that that one opportunity looks the same way it did before we went into COVID. So it's a complete reversal.
Medical Economics: What advice do you have for either new graduates or younger physicians looking for a career change?
Singleton: A lot of them, especially early in residency, are having a specialty conversation, right? Does this change the type of medicine I wanted to practice? And what I would do is to get them to think of it not so much in terms of changing specialty, but maybe the setting in which they practice may change.
Look, there's no surprise that those who own and operate private practice in the physician market space have been hit hard. Most of them have seen a 50% reduction or more in revenue. And honestly, I'm not even sure that we've seen the end of those balance sheets. It's going to take a while to align AR, it's going to take a while to align whether they get PPP funding, utilization patterns, all those types of things.
We worked in conjunction with the Physicians Foundation and we did a survey. Early indications are we're going to lose up to 30% of our private practices. That's a staggering number to lose. Now, that's going to vary by market, obviously, and vary by specialty. But what this has done is essentially poured gas on an already burning consolidation or merger/acquisition fire, that was going on well before COVID. So that in turn pushes employment.
And this is what I mean by the setting of care they want to practice in. So now you have a 95% chance — regardless of who you go work for — you have a 95% of being chance of being employed (instead of independent). And that is going to have real ramifications to the structure of your pay, the structure of your scope of practice, and what technology you use.
There are some positives, some light at the end of the tunnel when you want to look at what opportunities might there be that weren't there pre-COVID. I think one of the most well documented cases of this is telemedicine, obviously, sort of the low hanging fruit. I don't think it's an overstatement to say that COVID has maybe given us four years of maturity in that market in four months. That isn't because now we have the technology we didn't before. Now physicians want to use it, and patients want to use it to get care. And it, frankly, wasn't even really because health care systems didn't trust it or adopt it. We had that before.
The change was this pandemic eliminated these archaic regulatory patterns and reimbursement patterns that would have taken years to get rid of — maybe in today's Congress, decades. So I think physicians’ ability to practice virtually has made it easier for some specialties, easier for some scopes of practice, than others. That's going to materially affect how many opportunities they can have during this COVID outbreak.
Same could be said about health systems now when you're evaluating different employers. Health systems that had a track record of innovation, that had a firm telehealth foundation as a core delivery of care in place, those have fared much better through COVID. And, frankly, will come out of COVID much faster if you want to look for a more stable employer. There's been great examples of those from provider led organizations like a Kaiser or Cleveland Clinic, which are not the only examples, but great examples there.
So again, I think the setting in which they want to give care is what they need to pay attention to more than just the specialty if that makes sense.
Medical Economics: Let's talk about physician compensation. What have you seen when it comes to pay during this pandemic?
Singleton: We’ve seen utilization and productivity go in the tank, right? So anytime you see that ,you see hospitals that are not growing and, at worse, they're laying off. Most of them are in between.
So you're going to see a reduction in recruitment, therefore, you're going to see a reduction in recruitment incentives. Clearly, you're going to see a reduction in productivity patterns, specifically for those that rely on elective procedures or fee for service.
As I mentioned before, if there's anything we didn't need a reminder of but the pandemic gave us one, is that for all our talk about quality, all of our talk about restructuring healthcare, we're still way too reliant on fee for service pathways. So of course, you're going to see a dip in that somewhere around 10% to 15%, depending on the specialty now. What are some factors that could mitigate that? So those specialties that can adapt to telemedicine, that can adapt to virtual health care faster, obviously, they'll be able to maintain a larger percentage of their practice, health system or not, private practice or not.
Those that are in direct COVID care clearly might actually see a spike in utilization, a spike in productivity and ultimately a spike in compensation. And even those that have been innovating and being able to adapt their scope to give COVID care. There's been great examples of emergency medicine physicians now managing care teams on floors, up into the hospital, working with different leadership structures and technologies that they never worked with before. Even physicians that have gone to care for vulnerable populations like homeless or nursing home or transitions of care. These t are innovations that hopefully will pay off. But if you're not in a position to do that, you're going to take a hit. I think the long standing hit to compensation — I'm not sure if we're going to know the full ramifications of that, maybe for a year or two.
Watch more episodes of Medical Economics Pulse on various topics, including: