American Dollars And Medical Masks

The Underlying Costs of Physician Pay Cuts

Evan Winter

In the wake of the COVID-19 pandemic, many hospital systems and other medical practices are issuing pay cuts or furloughing employees in an effort to combat revenue drops. Already coping with burdens suddenly placed on the healthcare system, a large number of physicians are left with overwhelming stress as they navigate uncharted waters of both a pandemic and financial insecurity.

Overworked and underpaid

The short-term revenue fixes offered by decreased salaries are likely to have long-term effects on the quality and quantity of physicians in practice. Many doctors already find their positions undermined by a rise in nurse practitioners, who come at a lower cost to employ than licensed physicians and are therefore in higher demand for pandemic response. This combines with the growing sense that patients can receive adequate care from nurses or Internet sources, leaving doctors feeling grossly undervalued. The COVID-19 pandemic has further impacted morale as healthcare workers are forced to work longer, more difficult hours and constantly risk infection. Some doctors are paid by “relative value units” (RVU), which are roughly calculated based on the volume of patients treated. Since much of the population has been advised only to seek medical attention if they are experiencing extreme symptoms, medical professionals not only see fewer patients but spend a significant amount of time treating the most critically ill. Physicians are simply being forced to take on additional, challenging work for less pay. 

Is there another solution?

While faced with stress from the pandemic, and hit with significant pay reductions, physicians are not provided with easy solutions. Many are tied to their current positions through insurance contracts or their various specializations, such as intensive care, making it difficult for them to switch practices or leave entirely. A large quantity of physicians regularly struggles to make sizable, monthly student loan payments. Pay cuts not only inhibit the ability to fulfill payments but also make the venture of founding a new practice nearly impossible. Without the options to alter their career path or exit the system efficiently, physicians can become trapped in positions where they are undervalued with no feasible way out.

The unfortunate outcome

With an all-around strained healthcare system, decreases in morale, and lack of flexibility regarding career options, pay cuts are forcing physicians into a place where it is difficult to support themselves and still produce the quality of care expected on a daily basis. Reduced salaries will force many to leave their current practices or could push them out of patient care entirely, affecting the integrity of healthcare as a whole. In addition, young practitioners and students will be discouraged from entering a volatile system and likely choose a path outside of patient care or medical all-together. Providing adequate compensation for physicians, especially in this time of crisis, is crucial to maintaining superior care for patients now and in the future.

Physicians who are searching for a new position, or negotiating a contract, can reach out to Resolve for guidance. Even in these uncertain times, Resolve’s team of job search specialists and contract attorneys are consistently matching physicians with positions in their desired locations and maximizing contract value. Visit the job search or contract review pages to learn more.