Physician Shortage Drives Boost in Nursing, Physician Assistant Pay

June 21, 2018 - As the physician shortage worsens, provider organizations are increasingly relying on non-physician providers to fill the gap. And they are paying nursing staff, physician assistants, and other employees more to make up for it.

The healthcare industry is facing a significant physician shortage, the Association of American Medical Colleges (AAMC) recently reported. The organization estimated a shortfall of up to 121,300 physicians by 2030 as the aging population seeks additional healthcare services and aging doctors retire.

With substantial physician shortages in both primary and specialty care, organizations are increasingly demanding non-physician providers to ensure their patients receive high-quality care even when physicians are short.

As demand increases for non-physician providers, so does this median compensation, according to MGMA’s recently released 2018 DataDive Management and Staff Compensation report.

The national median total compensation for staff in nursing positions has grown from just $48,000 in 2015 to $57,000 in 2018, representing a 19 percent increase, the study of over 139,000 professionals in 2,650 provider organizations showed.

“As evidenced in the MGMA DataDive Provider Compensation data released last month, the United States’ growing physician shortage has led to an increased reliance on non-physician providers,” stated Ken Hertz, Principal Consultant at MGMA. “Consequently, this has driven more demand for staff in nursing positions and, in turn, is part of the reason we see this increased value the market has placed on staff in these positions.”

Provider organizations are also seeking physician assistants to support the shrinking physician workforce, the National Commission on Certification of Physician Assistants (NCCPA) recently reported.

The analysis of over 112,000 physician assistants uncovered that the profession has grown 53.8 percent in the last seven years.

Notably, the profession has recently significantly expanded into specialty care, with the number of certified physician assistants practicing in surgical sub-specialties seeing the largest growth, increasing 70 percent since 2013.

As provider organizations across the care continuum sought more physician assistants, average compensation for the non-physician provider increased, the report added. The average salary for a certified physician assistant rose 12.7 percent in the last five years, reaching $107,718.

While non-physician providers are in higher demand, provider organizations are also turning to non-clinical staff to help bridge the gap created by the growing physician shortage, MGMA reported.

The study found that compensation for 11 of the 12 staff positions studied saw total median compensation increases since 2015.

Provider organizations are offering greater compensation to nursing staff, physician assistants, and other support staff to attract and retain qualified candidates, MGMA’s Hertz explained.

“We’ve seen this trend continue across medical practices for several years now: demand for qualified staff is growing, while supply is shrinking,” he said. “Aging staff across the healthcare industry are retiring at a higher rate than new ones are being trained to replace them. While medical practices of all sizes are struggling to keep up, many are trying to stay ahead of the curve by offering higher wages and more incentives to attract and retain the talent they need.”

Recruitment is a major challenge for provider organizations of all sizes. A recent MGMA Stat Poll showed that 61 percent of healthcare leaders experienced a shortage of qualified applicants for non-clinical positions in the past year.

Top reasons for the shortage included “finding medical assistants is difficult,” “recruiting millennials is very difficult,” “limited local pool due to an abundance of open positions in the community,” and “lack of future career advancements in the billing and coding field.”

Provider organizations are also struggling to retain their clinical and non-clinical staff. Approximately 37 percent of clinical and non-clinical employees plan to leave their current position in the next two years, and almost 69 percent expect to leave within five years, a recent survey found.

Greater compensation is one strategy healthcare organizations are using to attract and retain high-quality staff in the face of a worsening physician shortage. And this may help when it comes to hiring and retaining non-physician providers and non-clinical staff.

The NCCPA reported that insufficient wages given the workload was the second most frequently selected reason certified physician assistants were planning to their current position behind seeking another clinical position.

Provider organizations may also want to address management and senior leadership to reduce turnover, research firm SMD suggested. How healthcare management and senior leaders communicate with staff is a major factor contributing to voluntary employee turnover.

Practice and hospital leaders should boost communication efforts and acknowledge staff achievements to retain staff and make their organization more attractive to potential employees.