The physician recruitment landscape is never static, but the past year has brought an unusual level of disruption. A combination of federal policy changes, economic uncertainty, and persistent clinician shortages is reshaping how healthcare organizations build and sustain their workforces.
For rural healthcare organizations in particular, the stakes are especially high. In my role as Senior Vice President of Recruitment, my team works with clients throughout the Midwest who are facing department closures if they can’t hire a physician or advanced practice provider. For proof, just look at the number of labor and delivery departments forced to close in the past few years. Now, recent policy changes — including provisions in the One Big Beautiful Bill Act (OBBBA) and increased fees affecting international visas — are adding new layers of complexity to an already challenging physician recruitment environment.
A recent report from Jackson Physician Search, The New Physician Recruitment Reality: Current Trends and the Road Ahead, explores the trends impacting physician recruitment nationally, including a section focused on rural healthcare. Drawing on those insights, I’ll summarize how federal policy changes are influencing physician and APP recruitment in rural America — and how healthcare leaders can respond.
The Baseline Challenge: Persistent Physician Shortages
Demand for physicians and APPs continues to outpace supply. Population growth, an aging patient base, and a wave of physician retirements are all increasing the need for care. The Association of American Medical Colleges projects a national shortage of up to 86,000 physicians by 2036, with primary care and several specialties facing the most acute deficits.
At the same time, demand for primary care clinicians has surged. According to Jackson Physician Search placement data, primary care demand has risen 56% since 2020. Team-based care models — where physicians collaborate with nurse practitioners and physician assistants — are becoming a critical strategy for sustaining access to care.
Healthcare organizations across the country are battling supply-and-demand issues, but rural organizations typically feel workforce pressures first and most acutely. Location challenges, smaller candidate pools, and tighter budgets already make rural physician recruitment more challenging, and now many leaders fear federal policy shifts may amplify these obstacles.
Medicaid Changes and Financial Pressure on Rural Hospitals
One of the seemingly most impactful policy developments is the One Big Beautiful Bill Act, a sweeping federal law enacted in 2025 that includes significant changes to healthcare spending and coverage programs.
Among its provisions are new eligibility requirements for Medicaid and marketplace plans, restrictions on provider taxes, and limits on state-directed payments in Medicaid managed care. Analysts estimate these changes could result in more than 10 million Americans losing health coverage over the next decade. For rural hospitals — many of which rely heavily on Medicaid revenue — the implications are significant.
Coverage losses can lead to increases in uncompensated care, placing additional strain on already thin operating margins. When financial pressure mounts, healthcare organizations may delay service expansions, reduce hiring plans, or freeze recruitment altogether.
However, the demand for care does not disappear. Healthcare leaders must therefore balance financial caution with the reality that pausing recruitment can create longer-term access problems and revenue losses tied to vacant provider positions.
Rural Transformation Funding: A Potential Opportunity
While much of the discussion around the OBBBA has focused on spending reductions, the legislation also includes a $50 billion Rural Health Transformation Program to support innovation in underserved areas. The program allows states to develop tailored transformation plans that may include investments in telehealth, workforce development, and new technologies. According to an article for NPR, states’ proposed uses for the funds include housing and childcare for healthcare workers, workforce mapping and planning tools, and expanded residency and fellowship opportunities. However, the program is clear that the money is not to be used to cover operating costs. Only 15% may be paid directly to providers.
Criticism abounds regarding the amount of funding, how it will be distributed, and limitations on how it can be used. Perhaps the biggest critique is the discrepancy between how much funding rural organizations are projected to lose as a result of the other changes and the amount of rural transformation funding awarded.
That said, the funding could support a continued shift toward team-based care, where physicians work alongside APPs and other clinicians to expand access and improve efficiency.
In many rural markets, this model is already essential. APPs help extend physician capacity in primary care, emergency medicine, and hospital-based settings. As workforce shortages continue, integrating APPs into physician-led teams will likely remain one of the most effective strategies for maintaining service lines.
Immigration Policy and the International Physician Pipeline
Another policy change with direct recruitment implications is the increase in federal fees for H-1B visas, which are commonly used by international medical graduates (IMGs). Recent changes raised the H-1B visa fee to approximately $100,000, compared with roughly $3,500–$5,000 previously. The increase has significantly reduced the financial feasibility of using traditional visa pathways to recruit international physicians.
For rural healthcare organizations, this is particularly concerning. According to the American Medical Association, nearly two-thirds of International Medical Graduates practice in medically underserved or health professional shortage areas. This means rural communities are disproportionately dependent on IMGs to fill critical gaps.
For now, the J-1 visa waiver program is not impacted by the fees, but uncertainties about the future have many rural health leaders feeling hesitant to pursue international candidates, and they are thus left with a significantly smaller candidate pool.
Rising Compensation and Evolving Candidate Expectations
Federal policy changes are unfolding against the backdrop of an already competitive recruitment market. With clinician supply constrained and demand rising, physician compensation packages continue to grow. In fact, more than 80% of physician offers now include signing bonuses or other incentives, and flexible scheduling options such as four-day work weeks or block scheduling have become common expectations.
Recruitment strategies increasingly require not just competitive compensation but also compelling lifestyle advantages, strong community integration, leadership development, and efficient hiring processes. For rural organizations operating with tighter budgets, these non-compensatory perks are an absolute must. Organizations that move quickly and present a clear vision for professional satisfaction are far more likely to secure top candidates.
Moving Forward: Strategic Rural Physician Recruitment
Federal healthcare policy will continue to evolve, and the full impact of recent changes will unfold over the coming years. What is already clear, however, is that rural healthcare organizations must remain proactive in their workforce strategies. That means closely monitoring regulatory developments, evaluating financial models under new reimbursement structures, and adapting recruitment tactics to meet changing workforce realities.
Above all, healthcare leaders must remember a key takeaway from the Jackson Physician Search report: organizations that continue to invest in recruitment — even during periods of uncertainty — are the ones best positioned to meet patient needs and maintain access to care. For rural communities, that commitment is more than a staffing strategy. It is the foundation of healthcare access itself.
For more physician recruitment trends, download the full report: The New Physician Recruitment Reality: Current Trends and the Road Ahead
If your organization is facing difficulty hiring physicians, the team at Jackson Physician Search has the experience and expertise to accelerate your efforts. Reach out today to learn more about the benefits of partnering with Jackson Physician Search.
About Tara Osseck
With over 15 years of experience in the healthcare industry, Senior Vice President of Recruiting Tara Osseck specializes in matching healthcare organizations with physicians who are a strong cultural and professional fit. Her healthcare career began as a physician liaison. It quickly expanded to include physician recruitment, strategic planning, and business development, working for various hospitals throughout Memphis, Tennessee, and St. Louis, Missouri. Based in St. Louis, Osseck leads the firm’s Midwest Division, placing providers across the Midwest and Upper Midwest. She earned a bachelor’s degree from Truman State University and a master’s degree in healthcare administration and management from the University of Memphis.
