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Physician staffing firms, flailing in the wake of a federal law banning surprise bills, are demanding extra payment from hospitals to stay afloat. Hospitals, desperate for doctors to staff their facilities, have little choice but to comply.
It’s a big topic of conversation on for-profit hospital earnings calls. Just last week, major hospital chains said those expenses, known as physician subsidies, were up 20% to 40% from last year. And experts say it’s just as bad at not-for-profit hospitals. It’s a complicated problem that’s gotten worse just as contract labor expenses — hospitals’ hallmark problem of the past three years — ease up.
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“This is the new contract labor,” said Whit Mayo, senior managing director with Leerink Partners. “This is the new cost issue that the industry is having to deal with.”
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