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COVID-19 is reducing physician compensation, job options

Demand for physicians, as gauged by the number of new search engagements, has declined by over 30% since March 21.

Jeff Lagasse, Associate Editor

The coronavirus pandemic has significantly altered the job market for physicians, leading to the temporary reduction of both starting salaries and practice options for doctors, according to an annual report tracking physician-recruiting trends. 

Prepared by physician-search firm Merritt Hawkins, the 2020 Review of Physician and Advanced Practitioner Recruiting Incentives tracks a sample of 3,251 physician and advanced-practitioner recruiting engagements the firm conducted from April 1, 2019, to March 31, 2020. It includes analysis suggesting that the previously robust job market for physicians has softened since the emergence of COVID-19.


While there was an increase in physician-search engagements over the 12-month period ending March 31, demand for physicians since March 31, as gauged by the number of new search engagements, has declined by over 30%. At the same time, the number of physicians inquiring about job opportunities has increased, which has created an opportune market for those healthcare facilities seeking physicians.

The soft job market for physicians is a result of the devastating economic impact COVID-19 has had on the healthcare industry. The American Hospital Association reports that hospitals and health systems lost $200 billion in the first quarter of this year. The Medical Group Management Association indicates that physician-practice revenue has declined by an average of 55%, since patients have been either unable or unwilling to seek medical treatment.

As a result, fewer physician practices and hospitals are seeking physicians as they struggle with lower revenues and a focus on treating COVID-19 patients.

The decrease in demand for doctors is likely to be temporary, though. The various underlying dynamics driving physician supply and demand remain, including a growing and aging population, a limited supply of newly trained physicians and an aging physician workforce. COVID-19 will not permanently change these market conditions, and demand for physicians will begin to rebound before the end of year, the report projects.

The report also tracks physician starting salaries and other incentives based on data gathered mostly prior to the emergence of the coronavirus. The data shows an average starting salary for family doctors of $240,000, compared to an average of $423,000 for radiologists, $464,000 for urologists, $640,000 for invasive cardiologists, and $626,000 for orthopedic surgeons.

Physician starting salaries are likely to decrease temporarily as a result of COVID-19, though it's difficult to project by how much. The way physicians are compensated is also likely to change, with physician bonuses increasingly tied to their use of telehealth and with more physician reimbursements based on monthly payments, rather than on average daily patient or work volumes.


This projection is in line with a report released by the Association of American Medical Colleges on June 26. The AAMC report projects a shortage of up to 139,000 physicians by 2033, an increase over its 2019 projection of 121,900 doctors by 2032. The AAMC report suggests that COVID-19 will contribute to the physician shortage by, among other things, interrupting the training of new doctors.

The 2019 Survey of Temporary Physician Staffing Trends from AMN Healthcare, released in February, indicates that 85% of hospitals, medical groups, and other healthcare facilities used temporary physicians in 2009; known as "locum tenens" doctors, they're typically hired to maintain services until permanent physicians are found, and to fill gaps caused by turnover.

Locum tenens physicians are filling openings that last from a few days to over a year while healthcare facilities seek difficult-to-find primary care physicians and specialists. They also can be used to fill in when healthcare facilities experience turnover on their medical staffs – an event made more likely by the growing employment of physicians by hospitals and other healthcare facilities.

Twitter: @JELagasse
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