In a tight market for talent, medical groups are raising wages to sustain their workforce

Medical practices don’t run properly without the right people, a painful reality that most healthcare leaders continue to live with amid a tight labor market and rising inflation.



An April 12, 2022, MGMA Stat poll asked medical practice leaders what their best tactic was to address staffing in 2022. The majority (56%) reported “raise wages,” followed by 29% who responded “flexible schedules.” Another 10% reported “other,” and 5% said “temp workers.”

The poll had 497 applicable responses. Among those who selected “other,” top responses included:

• Improved employee engagement efforts
• Improved benefits, such as more time off and reduced schedules
• Increased automation of administrative tasks and use of bots
• Outsourcing/offshoring for scribe work and medical coding
• Providing pre-emptive salary increases ahead of schedule
• More opportunities for remote work
• Taking on entry-level college students from local schools to build talent pipelines and developing those workers, such as preceptorships
• Adding referral bonuses for existing staff who help bring in new hires.

Very little letup on staffing shortages

Staffing was the top challenge heading into 2022 according to a Sept. 21, 2021, MGMA Stat poll, as three out of four medical practices reported making operational changes due to staffing shortages, per a Sept. 28, 2021, poll.

Lack of key practice workers continues, as an April 5, 2022, MGMA Stat poll found that medical assistants (MAs) and nurses are the two nonphysician roles that are most difficult to recruit right now. Stiffer competition in wages and benefits were the top cause of staff turnover in 2021, as a Feb. 2, 2022, poll revealed that almost half (41%) of medical group practice leaders said staff turnover rates worsened in the past quarter, compared to 33% who noted it was about the same as previous quarters, and 26% who said turnover slowed recently.

The latest jobs report from the Bureau of Labor Statistics paints a bleak picture, as well, as March 2022 was the slowest month of healthcare job growth since March 2021, with only 8,300 jobs added last month and an overall loss of 1,300 jobs from physician offices in the same period.

The increased competition among employers for workers already led to more than half of practices budgeting more than usual for workers’ cost-of-living (COL) increases for this year (per a Dec. 14, 2021, poll), with an average COL increase of 5%. That increase in staffing expenses has been compounded by rising inflation: The March 2022 Consumer Price Index (CPI) report detailed an 8.5% annual jump, making it the largest annual gain since December 1981.

The impacts to medical practices and patients

The emergence of staffing shortages was cited by nearly one-third of healthcare leaders polled on Nov. 16, 2021, as a reason why productivity goals were not reached in 2021. About 4 in 10 medical practice leaders said they missed their revenue goals last year, per a Feb. 22, 2022, poll, again citing staffing issues holding back patient volumes.

Aside from all these operational and financial considerations for getting staff turnover under control, there’s the most important reason: Patients notice.

A Feb. 10-15, 2022, CVS Health-Harris Poll National Health poll pointed to an increasing number of Americans expressing dismay over wait times for appointments and other impacts from staffing limits at their doctor’s office: “More than half of all Americans say they've directly felt the effects of healthcare worker shortages, from canceled appointments to delayed surgeries.”

Of course, the limited ability to hire the right workers for key roles has prompted a surge of interest in outsourcing and automation. A March 22, 2022, MGMA Stat poll found that revenue cycle (36%) and patient communication (33%) were the top two areas in which medical practices expect to outsource or automate in the next six months.

• Don’t miss MGMA’s on-demand online seminar, “Tackling Your Practice’s Biggest Challenges with Automation and Partnerships,” free to members.

Investing to maintain a sustainable workforce

Major health systems have added student loan repayments, referral bonuses, compensation increases and similar offerings to improve employee recruitment efforts. A 2021 survey of 150 health systems found almost universal (93%) focus on updating benefits strategies, including tuition reimbursement and improved health insurance coverage.

Did you know?

MGMA DataDive Management and Staff Compensation provides key compensation benchmarks for job titles throughout a medical group practice, from the C-suite to the front desk. Last year’s national survey included total compensation responses for more than 23,360 MA positions nationwide, as well as hourly rate data from 33,923 respondents. Learn more about this industry-leading data set.

JOIN MGMA STAT

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• Do you have any best practices or success stories to share on this topic? Please let us know by emailing us at connection@mgma.com.

Additional resources

• MGMA Staffing Resource Center — The latest updates, tools and resources to help your practice navigate through the tight labor market. 
• MGMA Stat: Measuring the Impact of the COVID-19 Pandemic — Find all our COVID-19 data stories going back to the start of the pandemic. 
• “Tips help private practices lessen sting of staffing shortages” (AMA)
• “Assessing place and time: Hybrid and remote work models provide growth potential for practices and flexibility for staff” (MGMA Connection magazine)
• “Using excepted-benefits health insurance plans to boost your benefits for top doctors” (MGMA Insight article)
• “Mitigating the many costs of turnover by investing in leadership” (MGMA Connection magazine)