The universal rule of cause and effect says everything happens because of something else happening first. The effects of healthcare policy on physician employment are no different. From Congress enacting the National Practitioner Data Bank (NPDB) to reduce healthcare fraud, to the U.S. Department of Health and Human Services’ re-definition of Dreamers, federal and state policies have a way of trickling down to the physician recruitment and hiring process. 

Here are a few examples of the impact of healthcare policy on physician employment:

Criminal and educational background checks

Thorough background checks in healthcare are now commonplace as organizations try to uphold patient safety and minimize risks. Their prevalence rapidly spread after Title 34 of the U.S. Crime Control and Law Enforcement policy mandated offense-specific background checks of physicians working directly with patients. These include a national criminal search, national sex offender search, identity verification check, drug screening, previous education and employment verification and a federal exclusion search, which impact the organization’s ability to receive federal funding through Medicare and other programs.

These are usually done during onboarding, which can affect the physician’s ability to actually stay employed at a new practice. Physicians who are aware of certain alerts in their background might seek employment in states such as Alaska, Connecticut, Hawaii, Missouri, New York and Rhode Island where background checks aren’t a condition of the physician’s initial licensure. Even so, healthcare organizations might still insist on the checks. In which case, physicians can hire attorneys and dispute the findings.

National Practitioner Data Bank (NPDB)

In 1986, Congress established the National Practitioner Data Bank (NPDB) that reveals any damaging performance from out-of-state practitioners. Ten years later, the Healthcare Integrity and Protection Data Bank (HIPDB) was established to help combat healthcare fraud and abuse. The two were consolidated in 2010, making it today’s NPDB.

Together they look for any adverse actions or findings against the provider by private organizations, federal or state licensing and certification agencies, healthcare-related civil judgments or criminal convictions and exclusions from federal or state healthcare programs.

While physicians can still be hired, negative results can damage their careers. For instance, they can be excluded from health plans, denied or have restricted medical staff privileges and be forced to pay more for liability insurance premiums.

HITECH Act

The 2009 Health Information Technology for Economic and Clinical Health (HITECH) Act encouraged the use of electronic health records by providing financial incentives to organizations and providers who implement and demonstrate “meaningful use” certified EHR technology. The federal government invested $36 billion over a decade toward widespread EHR adoption and implementation. 

As a result, the nation’s healthcare system was blindsided by clinician burnout, which included emotional exhaustion, depersonalization and adverse clinical outcomes.

During the COVID-19 pandemic, physicians and other healthcare professionals left in droves, forcing organizations to scramble to either hire new talent, limit patient intake or take other measures to restructure how they do business.

Medicare and Medicaid

Medicare and Medicaid were established in 1965. Medicare provides health coverage to those with a disability and to seniors 65 and older, including non-citizens who worked, or whose spouse worked, in the U.S. and paid Medicare taxes. In 2023, the number of enrollees in Medicare, Medicare Advantage and other Health Plans totaled 65,636,490.

Medicaid, on the other hand, covers very low-income citizens, lawful permanent residents and some immigrants. In January 2024, enrollment in Medicaid & the Children’s Health Insurance Program (CHIP) totaled 84,041,447. 

The sheer volume of Medicare and Medicaid means any policy regarding which organizations can participate, what treatments qualify for reimbursement and how much, and who is eligible to enroll dramatically impacts the finances and employment capabilities of healthcare organizations. 

Dreamers

The U.S. Department of Health and Human Services’ policy toward unaccompanied, undocumented children and undocumented children of illegal immigrants also effects physician employment. As recent as March 2022, these children—recipients of DACA (Deferred Action for Childhood Arrivals), also known as Dreamers—totaled 578,000. They were designated as “not lawfully present” which prevented them from being able to purchase most health plans. 

In an important reversal, the HHS recently modified the DACA definition to “lawfully present.” Effective November 1, 2024, the new designation means tens of thousands of newly insured DACA recipients can now seek medical attention. This particularly impacts physician employment in California, which is home to nearly 30% of Dreamers.

Minimum wage

In 2023, California became the first state to increase the minimum wage for healthcare workers. While physicians don’t work for minimum wage, California’s policy effects a healthcare organization’s support staff, which can influence a physician’s workload and quality of life.

Physician mental health

Licensing applications to state medical boards have long included questions considered intrusive with regard to a physician’s mental health. However, talking about or seeking behavioral health care would have to be revealed on the license application, which could lead to a loss of credentials and the physician losing hospital privileges.  As a result, at least 40% of physicians reported reluctance to seek formal medical care for treatment of a mental health condition. 

The impact on physician employment and quality of life was severe enough for nearly two dozen state medical boards to recently make changes to their licensing applications, and officials in at least a dozen other states are working toward to do the same. 

Equity and diversity

Several federal and state policies intended to improve social equality as well as healthcare equity and diversity exposed biased behaviors and physicians. California, for instance, passed a policy forbidding the use of “excited delirium” as a cause of death, which was found to be increasingly used in deaths of minorities in police custody.

Taking it much further, Virginia pushed through a state bill intended to force physicians and nurses to complete unconscious bias training in order to obtain and keep their licenses. Massachusetts allocated $415 million in additional reimbursements to hospitals that achieve certification for healthcare equity programs.

Competition

In April, the Federal Trade Commission voted to enact a total ban on noncompete agreements, which directly impacts all for-profit hospitals and practices, as well as indirectly impacts exempted non-profit healthcare organizations. Even though the ruling is being challenged in courts, several states including Louisiana, Delaware, Massachusetts and Rhode Island have already implemented, or are in the process of implementing, their own noncompete provisions. 

Another policy that impacts healthcare competition comes from a Justice Department task force on monopolies and anti-competitive behavior in healthcare. The Task Force on Health Care Monopolies and Collusion was set up to guide policy advocacy, investigations and criminal and civil enforcement. Specifically, the task force will “identify and root out monopolies and collusive practices that increase costs, decrease quality and create single points of failure in the healthcare industry.”

Roe v Wade

State and federal laws regarding abortion have very strong supporters and detractors, which can have unyielding and visceral impacts on physician employment. Physicians with deeply held beliefs that abortions violate their conscience are known as conscientious objectors.

Others who feel just as strongly about a woman’s right to choose may not necessarily be staunch supporters, but they contend they have the right to provide essential, sometimes life-saving medical care to any woman who needs it. When deciding where to work, physicians on both sides of the issue not only consider which healthcare organization is the best fit, but also, which state.

Accreditation

Not all healthcare policies are governmental. Healthcare facility accreditation comes from The Joint Commission on Accreditation of Healthcare Organizations, a nonprofit organization that inspects, evaluates and accredits healthcare organizations and programs. The designation is so powerful that organizations are automatically deemed as meeting all the health and safety requirements for Medicare and Medicaid participation. 

Receiving a citation from the Joint Commission won’t necessarily impact employment, but if a hospital or other healthcare organization fails to get accredited or in very rare cases, has their accreditation revoked, they could lose patients, millions of dollars every year in funding and the opportunity to hire or retain top talent. 

Social, political and medical policies directly or indirectly drive crucial behaviors and practices in order to protect physicians, healthcare organizations and patients. Throughout the physician employment process, it’s aware for both sides to understand the scope of these policies and how to best navigate them.