In this white paper, AMN Healthcare Physician Solutions (formerly Merritt Hawkins) examines the use of medical education loan repayment and recruiting/retention stipends in physician recruiting.
Medical Education Loan Repayment and Resident Recruiting/Retention Stipends
Medical Education Loan Repayment and Resident Recruiting/Retention Stipends: Emerging Trends in Physician Recruiting
Overview In this white paper, AMN Healthcare Physician Solutions (formerly Merritt Hawkins) examines the use of medical education loan repayment and recruiting/retention stipends in physician recruiting. According to the Association of American Medical Colleges (AAMC), the United States is facing a shortage of up to 124,000 physicians by 2033. This includes a shortage of up to 48,000 primary care physicians and 76,000 specialists. As demand for physicians increases, and as the supply of doctors remains static, recruiting physicians is becoming an increasingly difficult challenge. In response, hospitals, medical groups, and other facilities have become more aggressive and creative in crafting physician recruiting incentive packages. A wide range of data regarding the starting salaries offered to physicians, average signing bonuses and other incentives is reviewed in detail in AMN Healthcare’s annual Review of Physician and Advanced Practitioner Recruiting Incentives . This paper focuses on two important recruiting and retention incentives: educational loan repayment and recruiting/retention stipends for medical residents. As physician recruiting becomes more competitive, and as the candidate pool continues to be stretched thin nationwide, AMN Healthcare Physician Solutions has observed continued offers of educational loan assistance to candidates, along with an increase in “retention” monies dispersed to providers as part of their employment contracts. Included in our 2023 Review is data on the number of hospitals, medical groups and other facilities offering educational loan repayment as part of the physician recruiting incentive package (see next page).
© AMN Healthcare 2024
AMN Healthcare.com | 2
Medical Education Loan Repayment and Resident Recruiting/Retention Stipends: Emerging Trends in Physician Recruiting
AMN Healthcare’s Search Engagements Offering Educational Loan Repayment
2020
2023
2022
2021
2019
2017
2018
18%
16%
21%
24%
31%
18%
25%
Source: AMN Healthcare’s 2023 Review of Physician and Advanced Practitioner Recruiting Incentives.
As these numbers indicate, the number of facilities offering educational loan forgiveness has fluctuated over the years, from a high of 31% in 2019 to a low of 16% in 2022. Often, this is a result of the types of physicians being recruited. Facilities recruiting graduating medical residents or younger physicians are considerably more likely to offer educational loan forgiveness than are those recruiting older physicians who may already have paid off their educational loans.
Offering loan repayment is one way to make a practice opportunity stand out from the many others that doctors may be considering. In today’s market,
Number of job solicitations received by U.S. Medical Residents during their training
0 -10
3%
11 – 25
5%
26 – 50
14%
56 – 60
22%
OVER 100
56%
Source: AMN Healthcare/Merritt Hawkins 2023 Survey of Final-Year Medical Residents
As these numbers show, 68% of 2023 final-year medical received over 51 job solicitations during the course of their training, while 56% received over 100 job solicitations, underscoring the competition for newly trained physicians.
In the past, educational loan repayment was offered to new physicians primarily through the National Health Service Corps in exchange for their commitment to practice in a medically underserved area. Today, healthcare facilities not located in underserved areas also are offering to repay candidate’s educational debt, “upping the ante” when it comes to attracting physicians
© AMN Healthcare 2024
AMN Healthcare.com | 3
Medical Education Loan Repayment and Resident Recruiting/Retention Stipends: Emerging Trends in Physician Recruiting
Medical Student Debt Burden: Educational loan repayment is becoming a more important incentive to consider as the burden of medical education debt rises. As indicated in AMN Healthcare/Merritt Hawkins’ 2019 Survey of Final-Year Medical Residents , the average self-reported educational debt among final-year residents is as follows:
What Do You Owe In Student Loans?
2019
2017
2014
2011
2008
$0
31%
24%
25%
25%
10%
$50,000 OR LESS
6%
10%
9%
10%
17%
$50,001-$100,000
6%
7%
9%
13%
19%
$100,001-$150,000
6%
7%
8%
11%
29%
$150,001-$200,000
9%
11%
14%
22%
19%
$200,001 OR MORE
42%
41%
35%
19%
6%
Educational debt among final-year medical residents is higher when international medical graduates, who often have little or no educational debt, are removed from the equation. While 58% of U.S. trained medical residents surveyed by AMN Healthcare/Merritt Hawkins indicated they owe over $150,000 in educational loans, only 31% of international graduates indicated they owe a similar amount. According to the Association of American Medical Colleges, the average overall educational debt of U.S. medical school graduates today is approximately $200,000.
© AMN Healthcare 2024
AMN Healthcare.com | 4
Medical Education Loan Repayment and Resident Recruiting/Retention Stipends: Emerging Trends in Physician Recruiting
Loan Repayment Amounts In its annual Review of Physician and Advanced Practitioner Recruiting Incentives , AMN Healthcare tracks the amount of educational loan repayment offered by our clients to physician candidates. Numbers from the previous five years are indicated below:
Low, Average and High Medical Education Loan Repayment Amounts
YEAR
LOW
AVERAGE
HIGH
2022/23
$10,000
$98,665
$400,000
2021/22
$10,000
$101,572
$400,000
2020/21
$25,000
$104,630
$800,000
2019/20
$10,000
$101,590
$300,000
2018/19
$10,000
$101,571
$300,000
Source: AMN Healthcare’s 2023 Review of Physician and Advanced Practitioner Recruiting Incentives.
Term Of Educational Loan Repayment AMN Healthcare’s annual Incentive Review tracks the term over which medical educational debt is paid by our clients. As the chart below indicates, the amount is typically repaid over a period of three or more years.
3 Years+
1 Year
2 Years
%
%
%
Source: AMN Healthcare’s 2023 Review of Physician and Advanced Practitioner Recruiting Incentives.
© AMN Healthcare 2022 © AMN Healthcare 2024
AMN Healthcare.com | 5
Medical Education Loan Repayment and Resident Recruiting/Retention Stipends: Emerging Trends in Physician Recruiting
ADDITIONAL CONSIDERATIONS There are several additional factors to consider when structuring educational loan repayment, including:
• Many facilities forgo “direct-to-the-lender” loan payoffs and pay the provider. • Most payments are in annual disbursements, rather than a lump sum. • If the money goes to the provider directly, it is taxed as income rather than as a bonus, thus, shielding the physician from a higher tax burden in most states. • Most groups are targeting a 4-5 year commitment/ retention window for the physician.
• If monies are paid, either pro-rated annually or in a lump sum, there typically is a protection clause requiring the physician to pay what they have been advanced if they break the agreement early. o This claw back may or may not include an interest accrual • Many organizations determine disbursement based on when the physician completed their training, and many offer the same package to all new hires regardless of years of experience.
Resident Compensation Medical residents are paid a salary/stipend by the residency programs where they obtain their training. Level of compensation varies by year. The table below presents summary data on national resident/fellow stipends for each of eight post-graduate years as indicated in the Association of American Medical Colleges (AAMC) 2023 Survey of Resident/Fellow Stipends and Benefits Report.
MEAN UNWEIGHTED STIPEND
YEAR OF TRAINING
INSTITUTION COUNT
25TH PERCENTILE
75TH PERCENTILE
MEDIAN
STIPENDS AS OF JULY 1, 2023
PGY 1
326
$63,800
$59,602
$62,722
$66,918
PGY 2
324
$66,350
$61,843
$65,306
$69,431
PGY 3
322
$69,084
$64,168
$67,763
$72,679
PGY 4
259
$72,665
$67,009
$71,235
$76,493
PGY 5
235
$76,163
$70,235
$74,837
$80,521
PGY 6
212
$78,591
$72,465
$76,947
$83,617
PGY 7
171
$82,545
$75,982
$81,067
$88,055
PGY 8
125
$87,502
$80,308
$85,380
$92,664
© AMN Healthcare 2024
AMN Healthcare.com | 6
Medical Education Loan Repayment and Resident Recruiting/Retention Stipends: Emerging Trends in Physician Recruiting
Recruiting/Retention Stipends For Residents Monthly stipends for medical residents are another recruiting and retention incentive whose use appears to be growing based on what AMN Healthcare Physician Solutions is seeing in the market. Recruiting/retention stipends for residents typically are paid once the resident has signed an employment agreement, usually in the third year of residency, and are provided in exchange for the resident’s commitment to stay in the community for a given time. Stipends can be a welcome incentive because they provide residents income when many of them need it most – during training. As referenced above, many residents face a high level of educational debt, and though they commonly work 80-hour weeks, the median PGY1 resident salary today is just above $60,000, as the numbers above indicate. Hospital systems that have purchased medical groups may offer resident stipends in an effort to keep consolidated medical groups appropriately staffed. Stipends also are used by medical facilities in rural and other traditionally underserved areas that have historically found it difficult to recruit doctors. RESIDENT STIPEND TERMS The terms of resident stipends vary from facility to facility. The Schneck Medical Center in Seymour, Indiana offers a resident stipend of $2,500 a month for up to ten months, in addition to a sign-on bonus.
Other examples of resident stipend terms health facilities have offered that AMN Healthcare has observed include:
• Wisconsin - $2,000/month for up to 2 years • Ohio - $1,000/month for up to 1 year, with a 6-month housing stipend • Michigan - $2,000/month for up to 2 years • Missouri - $2,500/month for up to 2 years
These stipends typically require a commitment by the resident to stay in the community for two to five years. As with educational loan repayment, physicians must pay back stipend monies they have received on a prorated basis if they break the terms of their commitment. Often, the repayment is due 30 to 60 days after the physician leaves. It is important that residents receiving stipends be thoroughly vetted and that they thoroughly understand the terms of the employment agreement, particularly the call schedule. If not, they may feel trapped by the stipend and this can ultimately lead to poor retention when their commitment period is over, exactly the opposite effect stipends are designed to achieve.
© AMN Healthcare 2024
AMN Healthcare.com | 7
Conclusion As the physician shortage becomes more widespread, many healthcare facilities are considering new ways to attract physicians. While salaries, signing bonuses, relocation allowances, CME allowances and paid malpractice insurance are commonly offered recruiting incentives, an increasing number of healthcare facilities also are offering educational loan forgiveness and/or resident recruiting/ retention stipends. When properly structured and understood by candidates, these can be effective tools in today’s highly competitive physician recruiting environment.
AMN Healthcare Physician Solutions
AMN Healthcare Physician Solutions was originally established in 1987 as Merritt Hawkins. AMN Healthcare provides permanent physician, locum tenens and advanced practitioner, plus, leadership, language services, nursing, and allied staffing and search services to hospitals, medical groups, community health centers, telehealth providers and many other types of entities nationwide. As a thought leader in our industry, AMN Healthcare produces a series of surveys, white papers, books, and speaking presentations internally and produces research and thought leadership for third parties. For additional information about AMN Healthcare’s Physician Solutions services, white papers, speaking presentations or related matters, visit AMNHealthcare.com , or call 800-876-0500 or email physiciansolutions@amnhealthcare.com
Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8Made with FlippingBook. PDF to flipbook with ease