Clinician Starting Salaries, Signing Bonuses and Other Recruiting Incentives on the Rise

Staffing company says nurse practitioners have led employment searches for three consecutive years.

Recruiting incentives for physicians and advanced practice providers (APPs) have increased significantly over the past year, according to a new report from the staffing company AMN Healthcare.

The employment market for physicians and APPs is as tight as it has ever been. Traditional healthcare providers such as hospitals and physician practices are competing to employ physicians and APPs with market disruptors such as retail chains, urgent care centers, and telemedicine platforms.

The new report, "2023 Review of Physician and Advanced Practitioner Recruiting Incentives," was produced by AMN Healthcare Physician Solutions (formerly Merritt Hawkins). The report is based on a representative sample of the 2,676 permanent physician and APP search engagements AMN Healthcare Physician Solutions had ongoing or conducted from April 1, 2022, to March 31, 2023.

The report has several key findings.

• Nurse practitioners (NPs) were the No.1 requested provider search for the third consecutive year
   
• Average starting salary offerings for NPs increased 9% year-over-year
   
• AMN Healthcare conducted more searches for APPs than for primary care physicians, which reflects a patient shift away from primary care practices to retail chains, urgent care centers, and telemedicine platforms
   
• Although demand for primary care physicians has flattened, family physicians were still the second most requested search engagement in the new report
   
• Most of AMN Healthcare's search engagements (64%) were for physician specialists, with radiologists ranking third in the company's requested search engagements
   
• Obstetricians/Gynecologists ranked fourth on the list of AMN Healthcare's most requested search engagements, with starting salaries for OB/GYN's up 10.5% year-over-year
   
• Psychiatrists fell from fourth on the list of search engagements last year to sixth on this year's list, which likely reflects the shortage of psychiatrists and healthcare organizations turning to psychologists and APPs to fill behavioral health provider positions
   
• Average starting salary offers for many specialists increased, with starting salaries for dermatologists up 22% year-over-year, starting salaries for psychiatrists up 19% year-over-year, and starting salaries for orthopedic surgeons up 12% year-over-year
   
• Average starting salary offers for primary care specialties were flat year-over-year, with family physician starting salaries up 2% year-over-year, pediatrician starting salaries up less than 1%, and starting salaries for internal medicine physicians unchanged
   
• Orthopedic surgeons posted the highest average starting salary for physicians ($633,000)
   
• Pediatricians posted the lowest average starting salary for physicians ($233,000)
   
• The average signing bonus for physicians increased sharply from 2022 to 2023, rising from $31,000 to more than $37,000

Interpreting the data

Market disruptors are driving the demand for NPs, Leah Grant, MBA, president of AMN Healthcare Physician Solutions, told HealthLeaders. "Demand for NPs is being driven by the spread and increase of convenient care. We are seeing expansion of convenient care such as retail clinics, urgent care centers, and telemedicine—all of which are expanding using their APP staffing model, while before they depended on physicians."

NPs are also a cost-effective alternative to hiring physicians, she says. "APPs can provide many of the services that a physician can provide, and the number of states where they can practice autonomously keeps on growing. We are seeing more healthcare organizations take advantage of NPs than in the past because they often do not need to be paired with a physician. Now, nurse practitioners are the pillar of rural healthcare in many states."

The "Seven Ps" are driving demand for physician specialists, Grant says.

"First, there is population growth—the U.S. population is projected to grow from 332 million people today to 423 million by 2050. Second, population aging is a significant piece to the demand for physician specialists. By 2034, there will be more seniors over the age of 65 than children 17 years old or younger. Third is provider aging. While we are seeing the general population aging, we are also seeing providers aging. About 30% of physicians in active patient care are 60 or older. Fourth, we are dealing with provider burnout, with about 58% of physicians feeling burned out. Fifth, there is pervasive ill health. About 6 in 10 of American adults have a chronic medical condition such as diabetes, and about 4 in 10 have two or more chronic conditions. Sixth, there are pipeline problems. Federal funding for physician training was capped in 1997. So, we will continually see the effects of that as the years go on in terms of supply and demand. Seventh is changing practice styles. Many physicians are embracing different practice styles that reduce full-time equivalence with locum tenens work and part-time hours. Population aging is probably the most important piece in the demand for specialists."

A couple of factors account for the flat starting salary offers in primary care, she says. "They are just not as much in demand as they were several years ago, when everyone was setting up primary care networks or buying primary care practices. Family medicine is our No. 2 search, and I foresee that to continue. However, there is a ceiling for primary care salaries as opposed to specialists. The main reason for that is specialists can generate more revenue. Our physician billing report shows that an orthopedic surgeon can bill more than $9 million a year to commercial payers, while a primary care physician is going to generate half as much billing."

The No. 1 reason for the steep increase in physician signing bonuses is the demand for physicians, Grant says. "The demand for physicians has continued to increase. With that demand, a lot of healthcare organizations are trying to figure out how to be more competitive and how to get a provider in the door faster. The faster you can get a physician into your clinic or hospital, the more revenue you are going to generate. You can also decrease patient wait times, which are a concern in the market. Decreased wait times can make you stand out in the market as a preferred provider."

Market disruptors such as retail chains, urgent care centers, and telemedicine platforms are not only driving the market for APPs but also changing the healthcare landscape, she says. "The wait times to see a primary care provider have grown 24% since 2004. So, the market disruptors saw an opportunity presented by the physician shortage and the long appointment wait times associated with the physician shortage. There has also been a societal shift toward convenient care. The disruptors have realized that the healthcare market is increasingly about customer experience. If you are able to provide a better experience, you are going to have an advantage. Now, hospitals are moving to outpatient care and trying to compete with the disruptors."

Given the employment market conditions, offering recruitment incentives beyond starting salaries is becoming the norm, Grant says. "Signing bonuses are no longer a perk—they are an expectation. Nine times out of 10, the return on offering incentives such as continuing medical education allowances, relocation allowances, and medical education loan forgiveness is above and beyond the financial value of the incentives."

Related: MGMA Gauges Trends in Clinician Compensation and Productivity