Average starting salary offers for specialists zoomed up year-over-year, in some cases by double-digit percentages, a new report found.
In addition, entities such as retail clinics, urgent care centers, insurance companies, and private equity firms are vying with hospitals and medical groups for a limited number of doctors, according to AMN Healthcare’s 2023 Review of Physician and Advanced Practitioner Recruiting Incentives.
“We definitely saw some higher salaries for specialists,” Leah Grant, MBA, president of AMN Healthcare, told MedPage Today. Some of the largest year-over-year salary increases included:
- Psychiatry: $299,000 to $355,000, up 19%
- Dermatology: $350,000 to $427,000, up 16%
- Anesthesiology: $400,000 to $450,000, up 12.5%
- Orthopedic surgery: $565,000 to $633,000, up 12%
- Ob/gyn: $321,000 to $367,000, up 10.5%
Other physician specialities saw single-digit percentage increases in starting salaries: hematology/oncology, gastroenterology, urology, rheumatology, hospitalist, radiology, and pulmonology and critical care.
Only cardiology (non-invasive) and neurology reported decreases of 10% (from $484,000 to $433,000) and 1% (from $356,000 to $354,000), respectively. Starting salaries in primary care were flat or down year-over-year, according to the review.
Average salary offers made to nurse practitioners (NPs) also were up 9% year-over-year, from $138,000 to $151,000, according to the review.
Grant said a primary driver of the uptick is the aging population and their need for specialized care. “As the population ages, a growing number of specialists are required to address the consequences of aging hearts, lungs, bones, and other organ systems and body parts,” according to the review, which also cites CDC data that patients age 65 and older account for nearly 40% of medical tests and procedures even though they represent only 15% of the population.
The AMN data were in line with a recent Washington Post report that found U.S. doctors earn a mean of $350,000 a year.
‘Market Disruptors’
As for organizations competing to scoop up physicians and advanced practitioners (APs), the report refers to it as “a new ‘front door’ to the healthcare system,” because the “difficulty many patients have accessing medical services has created an opportunity for organizations that have not traditionally been active in significant levels of physician and AP recruiting.”
These organizations include retail chains, such as CVS/Aetna, which plans to open 1,500 HealthHubs to treat episodic to chronic care. It also includes urgent care centers that saw a 1,725% jump in utilization from 2007 to 2016, and telehealth platforms that took off during the pandemic.
Private equity companies have spent hundreds of billions of dollars on recent healthcare acquisitions, and insurance companies have also emerged as employers of physicians in large numbers, according to the review.
But there are still a limited number of candidates, Grant noted. “Now that we’re seeing these other facets come into the market, it’s only becoming more and more competitive to recruit a provider,” she said.
Grant explained that differences in practice styles offer providers more options. Plus, newer competing entities may dangle financial incentives that are “above and beyond” what is typical in order to build up providers, she said.
“Whether a healthcare delivery model is based on convenience, revenue generation or utilization reduction, physicians and APs are key to making the model work,” the report stated. “The market disruptors … are adding to the competition for these providers, which already was strong among traditional employers such as hospitals and medical groups.”
Driving Revenue
The average annual billing by physicians for 18 medical specialties to commercial payers was $3.8 million, according to the review. General surgery topped the list, with average annual billing approaching $11.7 million, followed by orthopedic surgery, at $9.8 million.
In addition, “NPs are direct drivers of revenue to their practices and employers,” with billing submitted by NPs to commercial payers coming in at:
- 25th percentile: $453,880
- 50th percentile: $777,393
- 75th percentile: $1,311,922
The reported noted that NPs “generate revenue and continue to represent a good return on investment in an era when many healthcare organizations are focusing on cost control,” although “they still earn considerably less than physicians.”
The AMN Healthcare report is based on a representative sample of 2,676 permanent physician and AP search engagements from April 1, 2022 to March 31, 2023.
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