Salaried physicians become more politically progressive

A recent article in the New York Times noted a steady migration of doctors from private practice to hospital-owned health systems. The main driving force appears to be economic, that it is too difficult to run a business, especially when much of that entails fighting multiple insurance companies for reimbursement.

Some of the older physicians interviewed expressed “puzzlement” at younger doctors who chose salaried positions rather than private practice, with the suggestion that salaried doctors are somehow less committed.

When I chose to be a salaried physician after my training, I viewed it as a natural choice to express my commitment to medicine. After all, I wanted to practice medicine, not run a business. One beautiful thing about being salaried is that I have absolutely no financial conflict of interest with regard to my patients’ care. Nothing that I recommend or prescribe alters my income. This is very reassuring both to me and to my patients.

What intrigued me most in the article was the observation that “as doctors move from being employers to employees, their politics often take a leftward turn.” The article noted that the American Medical Association finally gave a “tepid” endorsement of the Obama healthcare reform.

With the shift toward the left among physicians, perhaps there will be a stronger momentum toward a single-payer-plan. Nearly the entire world has found this to be the most equitable way to deliver healthcare, to ensure that health care is available for everybody.

Only in America is health care a profit-driven enterprise. Though this may finally be changing.

Danielle Ofri is an internal medicine physician and author of What Doctors Feel: How Emotions Affect the Practice of Medicine.

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  • Dragon

    “This difference is unique and an essential part of the American identity. ”

    The American identity is built on the idea if you work hard, you will be successful. It follows logically that if you are not successful, you didn’t work hard. We have no compassion for those who fail, or perhaps were dealt a bad hand. We feel that if you need help, you are the scum of the earth. We are so afraid that someone that didn’t earn it will take our ability to buy cheap plastic stuff from China away. Instead of pulling together as a community, whether locally, nationally, or globally, we hoard our money, pursuing selfish goals. That’s the American way.

    Perhaps we as a community should cherish our doctors. Increase compensation because we care about our doctors and understand their sacrifice. But as both doctors and patients value money above all else, it’s just a business transaction and most Americans want a good deal. And why work in an environment that limits your compensation? Isn’t it the American dream to be wealthy? Isn’t that why doctors are afraid of a universal health care system?

    The issues with health care are pervasive throughout our entire culture. To treat medicine as a business and expecting the American population to not act like consumers is short sided.

  • The Notwithstanding Blog

    Salary is not a panacea for currently warped payment incentives. While nothing that you recommend or prescribe may directly affect your income, the financial conflicts of interest are there every bit as much as with other models of physician payment; the difference is that they’re well-hidden.

    As a salaried employee, you may be legally or ethically accountable to your patient, but for all practical purposes your job depends on the happiness of your boss (i.e. the practice owner), who could be another physician or even a hospital administrator depending on who owns the practice. This could mean restrictions on your ability to refer outside a certain network of specialists, to perform certain treatments that you think are better suited for your patients, or to spend more time with individual patients at the expense of practice revenue (this last decision is one that isn’t currently incentivized, but in private practice it’s the physician’s decision to make). Your ability to do what you think is in your individual patient’s best interest is subject to yet another layer of second-guessing and restriction that may or may not be useful.

    As a salaried employee, your incentive to “go the extra mile” in terms of availability, hours, taking vs. turfing tough/late-night calls or cases, and similar ‘customer service’-type things comes solely from your boss’s policies (and the rigour of their enforcement), and from your own professionalism or altruism. These can be, and I would imagine often are, sufficient enough to motivate most physicians to do “the right thing” in those circumstances (whatever the right thing may be). However, much of the debate around physician payment, including Dr. Ofri’s assertion that salaried payment frees her from conflicts of interest, inherently assumes that these other motivating factors are insufficient to overcome the mis-directed incentives of FFS payment. If the argument policy and professionalism are outweigh these financial incentives in the case of salaried payment, I would imagine that it applies equally well to FFS payment.

    I’m not trying to say that either mode of paying physicians is inherently superior, merely that salary is not the be-all and end-all of physician payment models, and that it certainly isn’t any more free from financial conflicts of interest than FFS payment is.

    • concerned, educated patient

      Great response and great example of critical thinking.

      Thank you!

    • jsmith

      Well said. I used to be on salary at a health system in Minnesota. We had to use the consultants who used our hospital, and we had to send pts to that particular hospital when they needed inpt care.

  • MD

    You are oversimplifying things. If we go to a single payer system that controls physicians’ salaries, we must also invest in subsidizing medical education–just like how it is in countries that have a centralized health care system. Why should anyone pay over $200,000 for a medical education, enter the workforce in their 30′s, only to become an “employee” with a ceiling of income?

    Comparing our system to Europe is not a fair or scientific comparison. Our educational, political, and health care delivery systems are setup very differently. This difference is unique and an essential part of the American identity.

    Considering that less than 10% of health care dollars go to physicians, we must turn our attention elsewhere if we are really serious about reducing spending. Of course, since physicians have no political power and no real representation, their voices have been rendered irrelevant in heath care reform debates.

    The private insurance industry has successfully turned the reform equation to their favor with a mandate to buy their products while physicians continue to face declining reimbursements and threats to their independence as professionals and, it can be argues, human beings.

  • PeterW

    Perhaps not surprising. Economic conservatives are generally more tolerant of risk and inequality in the pursuit of economic growth, while liberals prefer more equality even if it’s less economically efficient. Salaried physicians are insulated from the hurly-burly of the market, and therefore can afford to be more concerned about egalitarianism since they’ll draw a paycheck either way.

    I discussed a graph of professions ranked by political inclinations here: (

  • Ed

    “I have absolutely no financial conflict of interest with regard to my patients’ care. Nothing that I recommend or prescribe alters my income.”

    So you have no patient quota, explicit time limits to exams, bonuses for meeting therapy goals (which may not be individualized to the patient), you don’t have formulary and practice guidelines that your employer mandates for you to maintain your job?

    Either you are employed but the the most benevolent employer and I want to be your co-worker, or you are simply sweeping your financial conflicts under a rug and pretending they don’t exist.

  • DrLemmon

    I am employed and I have not drifted left in my politics. When I negotiated my contract I considered what I was worth and what they offered. It seemed profitable for me and so I took the job. Had there been a better opportunity I would have taken it. If things deteriorate, pay cuts etc. I will move on if a better opportunity is available. Is this not what it is to profit in health care or any endeavor? I assume then hospital evaluates me similarly and work hard for them, which of course means I work hard for my patients.

    There are some patients that would be secure in the knowledge that their physician had a financial incentive in providing them quality care. These types of patients find independent, for profit physicians, and pay them for what they consider to be better care.

  • ninguem

    If doctors are going to be nothing more than employees, then there should be no reason to force noncompetes on them. The doctors should be able to offer their services to any employer they want, without restrictions, no different than the nurses or lab techs or anyone else.

  • DrL

    “With the shift toward the left among physicians, perhaps there will be a stronger momentum toward a single-payer-plan. Nearly the entire world has found this to be the most equitable way to deliver healthcare”

    The entire world does NOT have a single payer system. England and Canada do. But most european countries have regulated private insurance. And there is now private health care in Canada and the UK for some of the population.

    This is a common mistake…I’ve heard it from other physicians. It is a sad testimony to the success of single payer advocates that they have convinced American doctors that every other country has a single payer system.

  • Amy

    I was both an employee and a practice owner. My salary is lower now than it was when I was an employee. I know my patients better, I am more available to them, refer to specialists less and I know exactly who can afford and what, because I see every bill and return. I understand better the flow of money and how the system works. And most important : I feel free.
    Employed physicians are shielded from many things, including very often their patients. They are at the mercy of a clinic manager or hospital administrator. They have to go to meetings, read memos, work with incompetent and poorly trained MA’s, take calls for 6-7 other doctors (with patients unknown to them), read pages and pages of policies and procedures.
    Almost all these big groups are a revolving door for physicians, every few years half of the group changes. Continuity of care is a myth. There is a compassion on the surface but deep down, when the administration treats patients like a number, not many employed physicians stand up for their patients. I guess that compassion only goes so far…
    You can’t understand the issues completely just by reading, you have to live both realities and feel the difference. Then , you can judge.
    Pointing fingers and saying “Look how generous and pure I am”, is childish. Sure, you are generous, as long as the salary comes. But would you work for free ?
    When I take care of a poor patient (which I do every day), when I see that patient knowing that I won’t get paid anything, I provide true charity. When you see a poor patient, you don’t, because you still expect a salary at the end of the month. And that’s neither charity, nor a true sign of compassion.
    And then, there is the pride of being on your own : when you unlock the doors in the morning and then you see the 2-3 people you employ. Those are people who have a job because of your guts and brain, those are people who can sleep at night while you can’t.
    And the feeling of freedom is priceless… But you can’t understand that, because you’ve never been there.

    • jsmith

      Excellent post. Meetings and memos, that was my summary of working for Kaiser in the early 90s. Bad MAs, bad administrators, even some bad docs. My life has been immeasurably better since I left there.
      You’re gonna have some downsides, feel some pain, alone or grouped up. Take your choice.
      I have been out of corporate medicine since 2002. Is it true that it’s still a revolving door most places? Or just where you worked?

  • VK

    “Only in America is health care a profit-driven enterprise.”

    People say this like this is a bad thing. Food is a profit-driven enterprise. Housing is a profit-driven enterprise. Multiple people go hungry every night. Multiple people don’t have a home to go every night. Yet nobody’s clamoring for governmental takeover of housing or grocery stores. Boggles my mind…

    • BC

      This depends on your definition of health. If it is considered an inalienable basic human right such as liberty and freedom – which are protected under the U.S. government – then by all means the government has a responsibility to ensure their citizens have access to health care. On the other-hand you can see health as a commodity, such as food and housing, to be relegated by the open market. The problem with corporate healthcare is the inherent conflict of interest. It should really be called fair weather care because that’s what creates the most profit. It creates a paradox where the sick get sicker due to certain circumstances beyond their control such as genetics, happenstance, and/or environment. How is it fair that an employee loses his job due to an accident or a health condition and can’t afford to pay his medical bills or insurance? How can you deny a person the basic right to live so that they may have a chance to not go hungry or buy a house and pursue the things that are so great about the U.S.? Because it’s not profitable??? That to me…boggles my mind….


    This right-to-left shift may just reflect the gender shift of medicine.
    As a general rule, men tend to be more conservative than women. There are lots more women in medicine now, and in my experience, most look for employment.

  • DrL

    So, essentially, the government passes laws that make it harder for physicians to have private practices. That leads more physicians to be on salary, and to support more government laws, eventually leading to a single payer system.

    that’s a sneaky way for single payer advocates to weed out their opponents…and unfortunately it just might work.


    Salaried docs are doing the same things that the “last of the independents” are doing, looking out for their own best interests. Both pursue the model that best meet their needs.

    I would like to see more independents able to keep it going. Proprietorship, whether a doctors office or a cheese shop, brings levels of service and satisfaction you just cannot get in the big box stores. If the playing field were level regarding independents and hospital owned practices abilities to stay afloat, I believe more would seek the autonomy they once had with ownership.

    In my small city, the primary care docs were unable to keep their doors open because of shrinking reimbursements and increasing costs. The single hospital in town bought them on the cheap by offering guaranteed salaries and paid them only for their depreciated hard assets. They now sit in their offices and process patients and polish up the charts for maximum hospital based billing. The hospital bills at a significantly higher rate than private docs and they get paid significantly more for the same services (see H-pass). They also get paid for “facility fees”, another perk of being a hospital.

    When a patient calls with an urgent problem, even during the working hours, they are sent the the Hospital’s ER or the Hospital’s Urgent Care Center. They pay a premium for this while they are seen by a stranger. What could have been a simple office visit is now charged very highly with at least $250 just to walk into the Urgent Care Center. If the Urgent Care Center feels the true ER is needed, the patient is discharged from the Urgent and admitted to the ER and the money soaking starts anew. All the while “their Doctor” sits in his/her office polishing notes to maximize billing and meeting financial quotas while their patients are being irradiated, and decended upon by the hospital owned hospitalists and specialists.

    The independents (mostly specialists) are now mandated through the single hospital’s bylaws to avail their emergency and consult services for free…no risk to the hospital…what a deal. When your practice is neutered enough (even the cardiologists because the hospital built a cardiac care center and has its primary care docs refer to it rather than to the docs that have been there for years seeing their patients), the hospital then, being the white knights that they are, swoop in and buy the troubled cardiology group and assimilates them into “The Borg”.

    They (the docs) are not morally, ethically or idealogically drawn to this practice paradigm, they are essentially given an offer they truly cannot refuse (see Vito Corleone).

    The latest reimbursement schedule for Medicare A and B show the sweet heart deal hospitals stole from us to further the dismantling of the independents. Our own CMO (whose once independent practice is now hospital owned) told me that he believed the tacit collusion between government and the hospitals to further corral the docs (also known as herding bees) and ultimately control them is a faite de complete (sp).

    So, you see, the cards are stacked against freedom and autonomy. Me, I will continue to work in the paradigm that best suits my needs as long as I am able to make that decision.

    If what you are doing is working for you, good. Regardless, WAKE UP PEOPLE!

    • DrLemmon

      Paul, your analysis was perfect.

      Something Dr. Ofri missed were financial incentives not to do something. My understanding is that healthcare reform includes the formation of Accountable Care Orginazations starting in 2014. Primary care physicians will then receive bonuses based on tests and referrals and medications they did not order over the course of the year. I wonder how patients will feel about that?

    • Dawn

      You described what is happening in Orlando. One hospital system has bought out independent practices, but even worse has brought in docs from other states, set them up as hospital owned practices, disguised that fact from the public, and funneled all the referrals to them. In 3 months an unknown surgeon brought to the area was able to perform more breast surgeries than the most respected and high performing established independent — including those who sent most of their patients to that hospital system.

      I have statistics from the state that show the corresponding decline in independent practices as the hospital owned practices increase. It is about market share and revenue, not community need.

      Like you said, then, as the struggling independents are gasping in the face of declining reimbursement (made even worse by the fact that the hospital uses it’s 18 hospital system to negotiate reimbursement rate for its own doctors and insurance, to maintain itself, likely cuts reimbursement to independents, unable to sustain volume, the ‘benevolent’ system starts hovering like vultures to aggressively recruit the struggling practices.

      The system has over 200 of its own physicians and now the remaining competing hospital is doing the same.

      How can physicians and patients save independent practice? As a patient who cares about my own well-being and that of my physicians, I am furious and deeply concerned.

      The ‘other’ hospital just bought out my Mom’s cardiology group. They failed to tell her they will no longer accept her supplemental insurance or that costs for coumadin checks, pacemaker checks, and office visits would more than double because of ‘facility fees’ that are hidden. A formerly $55 pacemaker analysis is now $195 plus the $275 office visit. Bills that once had CPT codes on them now say things like ‘cardiology services and supplies’. There is NO transparency. To me, it is unethical and unless patients and physicians band together as a more unified voice, we will all stand by and watch independent practice disappear in areas like ours.

      How can patients help stop it? How can physicians help stop it?

  • jsmith

    Yikes, you paint a bleak picture Paul. I will try not to move to your town.


    I would like to tell you what town in New England that I live and practice in but I would fear retribution from the 800 pound gorilla (the hospital). On the other hand, the overall medical staff is quite expert and the care commensurate. The good news is that the administration of our hospital is very good at what they do. The bad news is that the administration of our hospital is very good at what they do.

    One of my goals in practice is to educate my peers but stay out of the sights of the Bergermeister Meisterberger that runs our local hospital. As Dr. Mary Johnson continuously states, it’s no fun getting tangled up with the likes of administration, politics and the law.

  • Levelset

    There’s no doubt that the money of medicine clouds judgment. The challenge is for all sides to rise above their personal interests.

    • Amy

      “The challenge is for all sides to rise above their personal interests.”
      So, what should human beings do ? Disregard their personal interests ? OK, let’s create a society where people don’t have any personal interests. But let’s not be unfair and limit this goal to physicians, let’s apply it to teachers, government employees, truck drivers…
      Basically, you’re saying “let’s change human nature”. Other people tried that before, want their names ? Look in the history book.

  • Paul MD

    @ AMY

    Thank you. Institutions/laws that defy human nature are unsustainable and destined to fail. Ultimately, “the utility of the agent” will trump “total utilitarianism” if enough pressure is brought to bear.

    Mutually beneficial and sustainable conditions need be met to both tame our innate selfishness and sustain a society that allows us to pursue and sometimes obtain objects of self interest.

    Boiled down to its near rawist form, “you don’t kill me and I won’t kill you”.

  • Sharon

    KevinMD, I’m interested in your opinion on the Community Health Center movement.

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