Data Mine: Falling behind — The nursing pay gap between physician-owned groups and hospital/IDS systems

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1/1/2025

After years of relative stability, the nursing labor market is undergoing a significant shift in favor of hospital systems, while private practices struggle to recruit and retain clinical staff. A national shortage of nurses has exacerbated this issue, driven by the basic economic principle of low supply and high demand, which puts upward pressure on wages — something hospital systems are better positioned to accommodate than private practices.

Since examining this issue with the aid of MGMA DataDive survey reports in an April 2023 Data Mine article,¹ the problem has worsened significantly. Multiple sources, including conference roundtable discussions and comments within the MGMA Member Community, indicate persistent concerns over staff compensation and retention. Additionally, recent MGMA Stat polls addressed this topic:

A May 28, 2024, poll found that 35% of medical group leaders reported worsening conditions in nurse recruitment.²
A July 16, 2024, poll reported that 43% of medical group leaders hired alternative staff to cover open medical assistant (MA) positions.³
A Sept. 10, 2024, poll indicated that 35% of practice leaders expect to budget more than usual to keep pay competitive in the current labor market.⁴

A national nursing shortage has emerged as the result of a “perfect storm”: rising demand for clinical staff across hospitals, ambulatory facilities and doctors’ offices, a large portion of nurses nearing retirement age and insufficient nursing school enrollment to meet future demand.

According to the 2022 National Sample Survey of Registered Nurses, 23% of registered nurses (RNs) working in outpatient, ambulatory and clinical settings have retired or plan to retire over the next five years,⁵ while the Health Resources and Services Administration (HRSA) Health Workforce Analysis projects a shortage of 78,610 full-time RNs in 2025 and a shortage of 63,720 full-time RNs in 2030.⁶

The most comprehensive insights into current nurse compensation trends can be found in the 2024 MGMA DataDive Management and Staff Compensation report (based on 2023 data) and historical data from past reports. Figure 1 illustrates the 10-year (2014-2023) trend in compensation for RNs.

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Written By

David N. Gans, MSHA, FACMPE

David Gans, MSHA, FACMPE, is a national authority on medical practice operations and health systems for the Medical Group Management Association (MGMA), the national association for medical practice leaders. He is an educational speaker, authors a regular Data Mine column in MGMA Connection magazine and is a resource on all areas of medical group practice management for association members. Mr. Gans retired from the United States Army Reserve in the grade of Colonel, is a Certified Medical Practice Executive and a Fellow in the American College of Medical Practice Executives.