Competition for Physician Recruitment is Fierce in some Urban Areas

According to an analysis by Rich Daly of the Healthcare Financial Management Association, the competition for hiring physicians has gotten so fierce that urban entities are seeking hiring help. A report by the national placement company Medicus provides data to support this assertion.

Among all of the placements in 2015, nearly 37% were recruited in urban areas. This differed markedly from 2013 when only one quarter of the placements were in urban areas.

The healthcare industry underwent a historic hiring surge in 2015—a sign of increased competition. Jason Farr of Medicus said how it was “a little bit of a treat” for them to be marketing to larger communities, because it was easier to make them appear attractive compared to the small, rural areas and medium-sized communities that Medicus had been catering to.

The competing firm Merritt Hawkins is seeing the same trends in the demand for physicians and advanced practitioners:

  • 40% were in communities of 100,000+
  • 38% occurred in communities of up to 25,000
  • 22% were in midsized communities

This increasing demand results in higher relocation bonuses, and the Medicus report reported the average relocation offer as being the highest since 2011. Average signing bonuses also increased and were the highest since 2012.

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Medicus reported that hospitals remain the dominant recruiter. The figures among employed placements reveal:

  • 69% were hospital employees
  • 25% were employees of physician’s groups
  • 5% were employed in unknown or “other” practice settings

This hospital hiring trend reflects the change in physician employment from being independent practitioners to becoming employees. Medicus found that 92% of the 2015 placements were in employed settings, while 8% were in private practice. A 2014 survey by the Physician’s Foundation identified the same trend, although they found that 53% of physicians self-identified as employees.

While this employment shift has resulted in a number of positive aspects such as enhanced quality of care, greater clinical integration, and cost efficiency, the change has also brought challenges. Negative aspects of the shift include increased turnover, potential financial losses on some acquired physician practices, decreased physician productivity, and a change in the essential character of the medical profession.