As they say, numbers don’t lie, so when a recent article listed the 2024 numbers making physicians nervous, we examined the issues from the perspective of physician job seekers. From insurance reimbursements to the cost of running a practice, here’s a look at the numbers and why healthcare industry concerns matter to physician candidates.

Medicare
Once again, the Centers for Medicare and Medicaid Services (CMS) proposed reducing fees paid to providers. Known as a multiplier or “conversion factor,” CMS publishes the amount it reimburses providers for treating patients covered under traditional Medicare. CMS proposed reducing fees by 2.8% in 2025. This is on top of the 2024 fee schedule, which reduced reimbursements 3.4% less than what it was in 2023.  Overall (when adjusted for inflation) there has been a 29% decline in Medicare physician payment since 2001, making many physicians feel like they’re getting paid less but being regulated more.

In some practices more than others, physicians are bogged down with a myriad of challenges, in addition to reimbursements, when dealing with CMS as well as commercial insurance companies. When considering your next job, it’s important to get a clear understanding about how money is generated, how much of your salary will be dependent on insurance reimbursements and what would be expected of you in terms of navigating the codes and paperwork required by CMS and commercial insurance companies.

Physician independence
Historically described as the cornerstone of the medical profession, traditional private practices are slowly disappearing. From 2019 to 2021, more than 108,700 physicians left private practice for other employment opportunities. In fact, 77% of all physicians in America are employed at hospitals, health systems and corporate entities, according to a report from Avalere Health. Of the existing physician practices, 58.5% are owned by health systems or corporations as of 2023, according to research by the Physicians Advocacy Institute and Avalere. Many other private practices have adopted direct care and concierge medicine models, in which they have a limited patient base and don’t accept Medicare, Medicaid or most commercial insurance companies.

Physicians interested in new opportunities have a lot to consider. Some physicians dream of opening their own practice. This path means not having to develop a CV or apply for jobs. It also means if your patient base uses CMS or commercial insurance, you won’t be able to set your own rates and may risk not making enough money to sustain your practice. You also have to be familiar with the entire manual of billing codes specific to each insurance provider. If you opt for employment, you must update your physician CV to reflect your skills, work with recruiters, find the right fit, negotiate  contracts, endure weeks of onboarding and study your new employer’s rules and regulations.

Money is a big concern for a remarkable number of physicians, regardless of whether they’re employed or run their own practice. According to recent report by Medical Economics, 36% of licensed physicians earned extra income from side gigs. These include consulting, teaching, market research, speaking engagements and appearing as an expert witness.

Power
Spending and negotiating power are the basis for more physician concerns. As with any business, the healthcare industry has significant costs. While some costs, such as malpractice insurance, are stable, others are rising. For instance, the cost of medical and surgical supplies increased 82% from 2022 to 2023, according to a report released from the Medical Group Management Association. Other modern costs of medical practices, such as telemedicine, can cost between $25,000 to $100,000 to fully set up and implement. 

When it comes to negotiating power, individual physicians carry little weight against insurance companies. Because of this, nearly 80% of physicians who left private practice reported they did so because they need better leverage in negotiating reimbursements from insurance companies, according to a report from the American Medical Association.

Lawsuits
Lawsuits can be emotionally, professionally and financially debilitating, which is why recent numbers regarding litigation has physicians nervous.

CMS has aggressively pursued violations of the Stark law, a 1989 federal rule that prevents doctors from referring patients to entities in which they have a financial stake, such as labs, hospitals or pharmacies. In 2023, CMS claimed $12.6 million from Stark law settlements, a 552% increase from 2021.

Lawsuits by patients are also on the rise. According to a 2022 study by the National Library of Medicine, 1 in 3 clinicians will be sued for medical malpractice during their careers.

Some companies cover malpractice insurance and provide some form of legal support. When looking for new opportunities, it’s important to find out what the organization offers and to understand any nuanced parameters within their policy. If the practice doesn’t cover you, will you get compensated enough to afford your own coverage and legal team?