Good news, bad news for physicians in 2024

From noncompete bans to pay cuts, here are three pieces of good news and three pieces of bad news facing physicians in 2024:

The good news

More states ban noncompetes

States have been increasingly changing noncompete laws, which affect between 37% and 45% of physicians, according to a June 13 blog post from the American Medical Association. These laws can limit career advancement and restrict ability to provide care in economically or socially marginalized areas. 

In the last year, Connecticut, Florida, Indiana, Maryland, New Jersey and Wisconsin have all tweaked their noncompete laws by creating bills for physicians or employees in general or adding certain restrictions.

CMS strengthens prior authorization policies

Recently, CMS finalized prior authorization and electronic health information policies that are expected to create approximately $15 billion in savings. The updates aim to ease administrative burdens on healthcare providers and improve care access by requiring payers to implement standardized programming interfaces and specific reasons for denials, among other stipulations. 

Prior authorizations are one of the biggest obstacles to physicians providing care. Ninety-four percent of physicians reported that prior authorization led to delays in patient care and has caused increased administrative burden, a March survey from the American Hospital Association found. 

Physician pay gap shrinks

Male primary care physicians made 19 percent more than their female counterparts, down from the average of 25 percent more over the past few years. This is the first time in five years that the salary gap between male and female physicians has narrowed, according to Medscape's "Physician Compensation Report" for 2023.

The bad news

CMS cuts physician pay

CMS cut overall physician pay by 1.25% for 2024. The rule updates the Medicare conversion factor to $32.74, a 3.4% decrease from 2023, but does improve pay for primary care and mental healthcare, according to its 2024 Physician Fee Schedule Final Rule released Nov. 2.

"This is a recipe for financial instability. Patients and physicians will wonder why such thin gruel is being served," American Medical Association President Jesse Ehrenfeld, MD, wrote in a Nov. 2 statement. "Physicians routinely have faced cuts in the last two decades. Yet, there is nothing routine about the past few years. Physicians have faced the COVID pandemic and subsequent burnout. They have seen the costs soar for running a medical practice, while Medicare payment updates have offered too little relief."

Additionally, some physicians could face additional cuts due to the cost-performance category of the merit-based incentive payment system, which could potentially reduce Medicare payments by up to 9%.

Physician ownership plummets

The number of physicians in private practice is rapidly declining — it dropped 13 percentage points over the last decade while the number of physicians working in practices with at least some hospital or health system ownership jumped 8 percentage points, according to a new report from the American Medical Association.

From 2019 to 2021, more than 108,700 physicians left private practice for employment opportunities, according to a report from Avalere. As of January 2022, nearly 74 percent of physicians reported being employees. 

Many leaders are worried about its effect on patient care and physician autonomy. Nearly 60% of physicians said nonphysician ownership of practices results in a lower quality of patient care, according to a survey from NORC at the University of Chicago. 

"This one factor makes physicians vulnerable to the whims of large corporations," Loay Kabbani, MD, a vascular surgery specialist at Detroit-based Henry Ford Health, told Becker's. "As physicians become more and more employed, we lose control of our practice and our patient-physician relationships. The new generation is more about timing in and out."

Physician burnout soars

Physicians are increasingly leaving the field: 40% of physicians said they had interest in leaving their current organization within two years, according to a survey from the American Medical Association that was conducted between 2021 and 2022. 

Burnout was cited as a major factor for why physicians are retiring. According to Medscape's "Physicians Eye Retirement 2023 Report," 74% of physicians want to retire at the age they have targeted due to burnout from medicine. Half of practicing physicians are reporting burnout in 2023. While burnout fell from its all-time high in 2021, it is a problem that is not going away, according to a survey from the American Medical Association.

"I am most worried about burnout and physicians, particularly those in the front lines such as primary care and emergency medicine, leaving medicine due to administrative burdens and unsafe environments and expectations," Vineet Sharma, MD, an emergency medicine physician in Los Angeles, told Becker's. "This is the most important thing that needs to be addressed in 2024 with rising medical school debt, the rising cost of becoming a physician and the rising unhappiness of providers. The shortage of front-line providers can drastically impact the U.S. as our population is aging. If we don't find proper means of compensating providers and make their jobs more enjoyable, we will be in a health crisis."

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