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Illustration of miniature doctor figurines standing on a stethoscope with a roll of money to the right. — Adobe

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.

“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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