More than 300K healthcare providers dropped out of the workforce in 2021, report finds

Nearly 334,000 physicians, nurse practitioners, physician assistants and other clinicians left the workforce in 2021 due to retirement, burnout and pandemic-related stressors, according to new data.

Physicians experienced the largest loss, with 117,000 professionals leaving the workforce in 2021, followed by nurse practitioners, with 53,295 departures, and physician assistants, with 22,704 departures. About 22,000 physical therapists also left the healthcare workforce and 15,500 licensed clinical social workers, according to a report from commercial intelligence company Definitive Healthcare.

Among physician specialties, the biggest declines were seen within internal medicine, family practice and emergency medicine fields. "Like clinicians and registered nurses, providers in these three specialties frequently worked on the frontlines during the pandemic, risking exposure and facing many of the same pressures and stressors as described earlier," the report authors wrote.

In 2021, 15,000 internal medicine doctors left the workforce, followed by 13,015 providers who left family practice and 10,874 who left clinical psychology.

Definitive Healthcare's report leverages data from more than 2 million physicians and nurses, 9,200 hospitals and IDNs and 128,000 physician groups.

Among high levels of burnout, many healthcare providers are nearing retirement age, the report noted.

 According to Definitive Healthcare data, many physicians across several healthcare specialties are on the verge of retirement or will be near that age soon. Research from the American Association of Medical Colleges (AAMC) found that nearly 45% of doctors are older than age 55, and more than 40% of active physicians will be 65 or older in the next ten years. The average age of a nurse is 57, the report said.

To address staffing shortages, hospitals are spending more on pricey contract labor. According to a Kaufman Hall report, hospitals have seen their per-patient labor expense increase dramatically in recent years, from $4,009 in 2019 to $5,494 in 2022.

In 2020, large hospitals with more than 250 beds spent nearly $11 million on average for contract labor, according to Definitive Healthcare's data. 

Hospitals and health systems are spending more money to hire and retain healthcare workers, the report found. These facilities are increasing salaries, offering sign-on bonuses, and expanding benefits to lure in new workers. Hospitals nationwide spent a total of about $97.3 million on employees and physician salaries in 2020, compared with $82.7 million in 2016, according to data from the October 2021 Medicare Cost Report.

Rural hospitals are feeling the pressure from the ongoing current labor crunch. "As larger hospitals in urban areas lure nurses and other healthcare workers with hefty bonuses, rural hospitals are struggling to compete. In contrast, rural hospitals offer smaller salaries, further enhancing the attractiveness of pursuing opportunities elsewhere. Staffing shortages have pushed many small hospitals in rural areas to refuse the admittance of patients, close inpatient wards and limit or suspend outpatient services, the report authors wrote.

The report found that South Carolina experienced the highest level of staffing shortages, with almost 29% of hospitals reporting a critical staffing shortage. Similarly, about 20% of hospitals in Georgia, Vermont, Delaware, and Michigan, experienced critical staffing shortages in 2021.

Definitive Healthcare researchers offer a number of strategies to combat staffing shortages.

Healthcare organizations can invest in technologies and services like telehealth to keep doctors and nurses focused on what’s most important: treating patients. Providers can use telemedicine to treat patients with conditions that might not be severe enough to warrant an in-person visit, mitigating some of the negative consequences of staffing shortages. Treating patients over the phone or a video call has also been linked to a reduction in facility operating costs and lower readmission rates. 

Hospitals and healthcare facilities also can invest time and resources into programs that promote mental and behavioral health through education and training, according to the report. The Dr. Lorna Breen Health Care Provider Protection Act, which became law in March 2022, empowers healthcare entities through awarded grants to tackle these challenges right now.

The report's authors also suggest fundamental changes to how Graduate Medical Education (GME) programs work to help the healthcare industry diversify and expand the workforce. "The availability and capacity of GME programs are capped by Medicare, which can be particularly detrimental to hospitals in rural areas. Raising the cap can help replenish the depleted healthcare workforce and offer providers the additional training they need to be better prepared to respond to the next pandemic," the report authors wrote.