Job growth at physician offices, hospitals expected this year

The outlook is that health system reform combined with some temporary increased stability in Medicare pay may lead to expansion.

By Victoria Stagg Elliott — Posted July 26, 2010

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Hiring at doctors' offices is expected to grow despite a recent slowing of job creation in this part of the economy.

"We are guardedly optimistic," said Stuart Wilkinson, vice president of human resources at the Memphis, Tenn.-based UT Medical Group Inc., the private practice division of the University of Tennessee Health Sciences Center faculty. "We continue to scan the horizon to determine how the environment is changing reimbursement rates."

UTMG -- which already employs approximately 360 physicians; 100 mid-level employees, such as nurse practitioners, physician assistants and other health care professionals; and 600 support staff -- is currently hiring a few dozen people. New hires include physicians, nurses, coders and administrators.

Industry watchers say health system reform, an apparent end of month-to-month Medicare payment fixes and the influx of new physicians finishing their residencies in July has increased the willingness of health care facilities to add positions. In addition, the hiring freezes that some organizations put in place to survive the latest economic downturn also mean that some practices are staffed as low as they can go.

"Most practices are running pretty lean already. You want to cut the fat, but you don't want to cut the muscle," said David N. Gans, vice president of innovation and research for the Medical Group Management Assn. "You have to optimize the number of staff to meet the needs of the doctors and the business needs of the practice."

MGMA surveyed its members from Feb. 12 to March 5 and released the results June 29 on the challenges faced by medical practices and how they were handling the recession. Compared with this time last year, fewer practices were implementing hiring freezes, although more were cutting staff hours and putting a hold on salaries. Fewer were postponing physician recruiting plans as well.

Numbers down from last year

Approximately 3,600 jobs were added in physician offices in the first six months of this year, according to the Bureau of Labor Statistics. These numbers are down compared with the first six months of 2009, when 8,000 jobs were created.

But most experts interviewed expect these numbers to rise in part because Medicare payments are anticipated to stabilize. Managing finances with the uncertainty of Medicare rates jumped from the No. 5 concern in the 2009 MGMA survey to second in this year's survey on the biggest challenges faced by medical practices. The survey, released June 29, was compiled as Congress was passing Medicare pay fixes that were as brief as a month.

The recently enacted 2.2% Medicare physician pay increase lasts through Nov. 30 and reverses a 21% pay cut under the sustainable growth rate formula.

"The SGR was a major issue," Gans said. "Our members were hunkering down and being very careful."

The anticipation of increased hiring also stems from the expectation that health system reform will lead to a rise in the number of people with health insurance, which in turn will lead to a greater demand for medical services.

Analysts say hospitals and large health systems are expected to add staff -- including physicians -- to prepare for the expanded demand for services that is likely as the Patient Protection and Affordable Care Act is implemented. A total of 3,200 jobs were added to hospital payrolls in the first six months of 2010. This was more than the 1,600 created in 2009, and experts expect hiring to continue.

"Hospitals are really trying to better position themselves for 2012 and beyond," said Brian McCartie, vice president of business development for Cejka Search, a health care executive and physician search firm based in St. Louis.

More jobs predicted soon

The Bureau of Labor Statistics job numbers also are expected to inch up over the summer as physicians finish residencies in July, enter the work force and require staff to support their practices.

"You're going to see an influx of hires to accommodate these new doctors," Gans said.

The anticipation of increased hiring is supported by other data. The monthly report on online job demand issued June 30 by global research association the Conference Board found that the number of ads for health care professionals and technical staff grew by 51,900 listings to 592,300. This was more than any other category, and the board said it was driven primarily by a growth in advertising for physicians as well as registered nurses. Advertising for health care support staff grew by 2,100 to 113,900.

Another survey, released July 12 by CareerBuilder, an online job search and recruitment company, found that 18% of the 270 health care employers surveyed planned to increase the number of full-time permanent employees. This was true for only 15% of those surveyed at this time last year. The company launched its Miracle Workers website listing clinical and nonclinical positions with health care organizations on July 14.

"There's a lot of demand, even with the recent recession, and a lot of growth," said Ben Jablow, managing director of the Miracle Workers website.

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Recession's effect on medical practices

The Medical Group Management Assn. surveyed its members in the first few months of 2009 and 2010 to determine how practices are affected by, and how they are handling, the latest economic downturn. Here is a breakdown of how members responded:

Said this was likely or had happened
2010 2009
Improvements in billing and collections 74.8% 74.4%
Revenue decline 70.3% 68.4%
Increase in uninsured patients 68.0% 74.1%
Capital expenditures postponed 59.0% 65.1%
Operating budget cut 58.1% 61.0%
Staff salaries frozen 57.2% 48.4%
Wellness, preventive, elective visits cut 57.0% 59.5%
Commercial payer contracts cut or renegotiated 55.8% 50.4%
Appointment reminders enhanced 55.2% 48.9%
Hiring frozen 55.0% 58.6%

Source: Medical Group Management Assn.

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