Should physicians work for hospitals?

A physician I have known for many years recently told me about his decision to enter the world of concierge medicine. His reasoning was telling, saying that it came down to a very simple decision on staying independent or becoming a hospital employee. He liked being an independent solo practitioner, and that was his primary motivation: to maintain independence in a time of consolidation.

Richard Gunderman, writing for the Atlantic, tackled this question head on in a recent piece titled, “Should Doctors Work for Hospitals?” The article reflects on the dramatic shift in physicians either seeking or being forced by market pressures to join hospital systems as employees.

Barring occasional periods of hospital consolidation, the independent practice of medicine has defined the American health care model almost as long as physicians have existed. There are many reasons for that, including the desire to control how you manage your own business and the freedom, as well as responsibility, to provide care as you see fit. These are touchstones on which medical care has operated for decades.

There are no doubt many benefits to joining larger groups. The chief one is perhaps better exchange of information, either personally or via information technology, to better manage patients and provide better care. Although, I must confess that as an emergency physician I have seen very little benefit from the millions of dollars spent on cutting edge hospital information systems. None of them have made me more efficient, nor have any allowed me to provide better quality care through the use of improved algorithms and pathways to best practices. At best, the notes look better and are more easily searchable. At worst they require the clinician to be a high-priced data entry tech.

The Atlantic article raises other concerns, including the fact that after purchasing a physician practice hospital systems are able to charge facility fees for the same office visit or procedure at, in some cases, double the cost. The tragedy is that if the physician had been able to collect a slightly higher fee in the first place they would probably have never considered being acquired by a hospital system.

There are certainly other advantages to joining a larger entity. One especially important one is the ability to negotiate better rates as opposed to being in solo practice. Hence my friend’s decision to join the ranks of concierge doctors, which require a yearly fee for the ability to see your provider for longer office visits and rapidly when needed due to the management of much smaller panels of patients.

We have seen consolidation of physician practices before, followed by wholesale divestment of these practices as the environment changed. The argument for consolidation today is that we have much better tools and data to manage costs and quality across large health systems.

Managing physicians is always a delicate process. We need to respect the years of training and sacrifice that physicians have invested and the core belief of most physicians that they are there to serve our patients. Striking that balance in the right structure requires numerous levels of ongoing communication on what is best for the patients, system and providers. A delicate balance indeed.

Angelo Falcone is chief executive officer, Medical Emergency Professionals (MEP).  He blogs at The Shift.

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  • Dr. Drake Ramoray

    “Managing physicians is always a delicate process. We need to respect the years of training and sacrifice that physicians have invested and the core belief of most physicians that they are there to serve our patients. Striking that balance in the right structure requires numerous levels of ongoing communication on what is best for the patients, system and providers. A delicate balance indeed..”

    I am a die independent or retire first type of physician This last paragraph sums up quite nicely why I feel that way.

    I don’t want to be managed. Management tells me they respect my opinion and years of training before they tell me that things can’t be done the way I want because someone else who isn’t a doctor says I can’t practice that way. I’d prefer not to strike any balance with “the system.” I prefer to just do what is best and right for my patients. There isn’t a need for a delicate balance to be acheived until non-physician, non-patient, entities get involved in healthcare decisions.

    • NPPCP

      I agree Dr. Drake. Not interested in being hovered over. Will never happen.

    • Joe

      The first point is absolutely true. The amount of reimbursement is becoming more and more irrelevant. There are so many obstacles between the point of care and actual compensation for the work done that many can’t do it alone anymore. How many other industries have such ridiculously high transaction costs?

  • Steven Reznick

    How can you be an advocate for your patient if you are an employee of a hospital system? It is a conflict of interest no different than the conflicts Pete Stark legislated against and Arnold Relman spoke against from his bully pulpit as editor of the New England Journal of Medicine

  • guest

    “Managing physicians is always a delicate process.”

    It’s delicate, because it’s not a process that should be in place. Physicians are professionals, and true professionals don’t need to be “managed.”

    In this regard, lawyers are much more clever than we are: when was the last time we heard any discussions about “managing lawyers?”

  • HJ

    When I got sick almost 15 years ago, I floundered under the care of my independent primary care provider. After much suffering I chose to pursue my care at a hospital based medical center. I received superior care at this medical center mostly because of the communication between providers. My chart (paper at the time) was available for all the doctors I saw and I never felt the doctors were trying to make money off me.

    I have seen doctors in independently practicing setting who been aggressive in there recommendations even thought there was no clear benefit to me. I guess owning your own MRI makes a difference.

  • MrsDoc

    Is there any advice out there for physicians who are currently employed by a large medical center and want out? Are there any examples of physicians resigning and getting out? I have a loved one who is being managed to death (not to mention the patients) and it is indeed a conflict of interest and it goes against his nature as a professional. I would love to support him in such a move, we are both capable people

    • Dr. Drake Ramoray

      There are ways. Start a direct pay practice (watch out for the non-compete), use your expertise for evil (work in hospital admin), get your MBA, start an entrepreneurial or consulting firm. My plan is to get things in order financially to start a direct pay low cost practice and live on half my current salary. Maybe even work part time (my volume may only support part time work).
      The first step is to get your financial house in order so you don’t need the doctor money, in my case the plan looks to be delayed a few years till our children are older as my wife wants to go back to work.
      There are ways, and it is increasingly happening. I have noted several posts on here from medical students and residents who are clearly aiming for a non-patient care admin, or entreprenurial route.
      The key for those out of training (or in training) is to expand your horizons on what you want to do and live in such a way that your lifestyle doesn’t need the salary.

      • MrsDoc

        Thank you Drake! I don’t have the earning power that my husband does after 13 years home with the kids but I am also going to get local licensure and get back in the game. I am a J.D./M.H.A. and am capable of doing a much better job than these folks currently crushing my physician/scientist husband’s soul! I hear you about getting our financial house in order. We will pay off our home in a handful of years and our expensive daughter will become independent. I will read your links. This could be fun and we could do people some good. Good luck with your direct pay practice. I looked up the term and it is just what it sounds like. Beautifully simple.

      • MrsDoc

        Ha! I just remembered where I have heard the name Dr. Drake Ramoray before. Very funny. Matt LeBlanc’s new show is pretty good too.

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