Healthcare reform is leaving more hospitals in pursuit of physician employment and more physicians in pursuit of salaries, but this mutual interest doesn't signal the end to traditional fee-for-service behaviors, according to a New York Times article.
Last year, 64 percent of job offers filled through Merritt Hawkins, a physician placement firm, involved hospital employment. That stands in comparison with only 11 percent in 2004, and the firm anticipates a rise to 75 percent in the next two years, according to the report. Hospitals are on a "feeding frenzy" — as one economist called it in the report — as they bid for physicians and offer attractive employment deals with incomes that are sometimes greater than private practice.
Oakland, Calif.-based Kaiser Permanente and Salt Lake City-based Intermountain Healthcare are considered models for how the combination of salaried front-line physicians and specialists — all under one roof — can yield cost-efficient and coordinated patient care. These are the mainstays of population health and, more specifically, accountable care organizations.
But many of the more recent salary arrangements were spurred by hospitals looking for new revenue streams, and these are the ones that may have "the opposite effect" from the likes of Kaiser and Intermountain, according to the report. These arrangements could make care more expensive in the short term.
Hospital facility fees, for example, can make procedures like colonoscopies or stress tests cost much more. Many physicians with salaries are also offered bonuses hinged on the amount of billing they generate, which could encourage physicians to order more tests than are necessary. Even the renowned Mayo Clinic, based in Rochester, Minn., still rewards physicians for each procedure, according to one economist in the report.
The report does note that more hospitals are transitioning to performance-based bonuses, according to Mark Smith, president of Merritt Hawkins. But he said this will likely take time to gain traction. He told the NYT those incentives are analogous to "pennies, not enough to really influence behavior."
But hospitals' eagerness to employ primary care physicians and specialists is only half of the equation: Many physicians are feeling unsure about practicing in the changing healthcare environment, particularly as payers look to move away from traditional fee-for-service reimbursement.
Cathleen London, MD, is one physician who felt her practice was losing ground. She practiced family medicine for 13 years outside Boston, but her concerns were enough to leave her taking a pay cut with a salaried job at a Manhattan hospital, according to the report. "I think the days of what I did in 1999 are over," she said. "I don't think that's possible anymore."
The article also features insight from Kirk Moon, MD, a radiologist in San Francisco in private practice. "I think it's pretty clear that sooner or later we're all going to be on salary," he told the NYT. "I think there'll be a radical decrease in imaging, but that's O.K. because there's incredible waste in the current system."
More Articles on Hospitals and Physician Employment:
How Has the Rise of Physician Employment Changed Hospitals' Recruitment Strategies?
6 Top Reasons Physicians Move From Private Practice to Hospital Employment
Survey: Number of Hospital-Employed Physicians Up 6%