More doctors forgo independence of private practice
Doctors used to pride themselves on their willingness and ability to stand solo.
They owned their practices, worked brutal hours and called the shots.
But now they’re running for the shelter of health systems, where they draw salaries, work scheduled shifts and accept decisions from above.
“We avoided the trend for as long as we felt we could, because we were tied to the idea of independence and running our own shop. … In retrospect, we wish we would have done this years ago,” says Dr. Bret DeLone of Kunkel Surgical Group, now owned by Holy Spirit Health System.
DeLone and his partners are happy to be free of burdens such as dealing with insurers and recruitment. They can focus more on patients.
Yet there are many questions about where the trend will lead, in the long run, for doctors and patients.
The trend toward “employed doctors” is occurring nationwide.
In the Harrisburg region, one of the most noteworthy examples took place this year, when PinnacleHealth System acquired Moffitt Heart & Vascular Group.
Other Pinnacle acquisitions include Susquehanna Surgeons, Capital Area Surgical Associates and Women’s Cancer Center.
Holy Spirit, in addition to Kunkel, has acquired Cardiovascular Surgical Institute and the former Family and Internal Medicine.
It now employs about 100 doctors, more than twice the number five years ago.
Executives at Pinnacle and Holy Spirit say they expect the trend to continue.
It’s driven by many forces.
Payments from private insurers and government programs such as Medicare have been flat, or they’ve shrunk. The expense of running a practice continues to rise.
The economic downturn and changes in health insurance plans have cut into patient volume, especially for elective procedures, which in turn has cut into doctors’ incomes.
On top of that, the federal health care reform law, passed in 2010, puts additional pressure on doctors to invest in electronic medical records, another financial strain.
The law, which fully kicks in 2014, will tie government payments to quality. This could favor larger organizations that can use data to improve medical outcomes, and use size to gain financial efficiency.
Beyond that, there are shortages of many specialists.
That makes it hard for practices to recruit new members. This can strain doctors at work and in their personal lives.
“Most of the health systems are reacting to the doctors knocking on our doors and saying, ‘We’re having a hard time of it, and would you consider having us come into your system?’” says Chris Markley, Pinnacle’s senior vice president of strategic services.
The cost of malpractice insurance has increased the appeal of working for health systems, which typically provide the malpractice coverage.
Pinnacle and Holy Spirit executives stress that they’re not trying to corner the market on doctors. They say that their employed doctors are free to hold privileges at other hospitals.
Markley says Pinnacle bases acquisition decisions mostly on whether its involvement is needed to ensure an adequate local supply of the various specialties.
Rick LaVenture, a senior vice president at Holy Spirit, said ownership is not the only means for hospitals to support local practices and ensure the full range of specialists are available in a community.
He says Holy Spirit, in addition to taking ownership, is using vehicles including recruitment help, professional services agreements and joint ventures.
LaVenture and Markley say their systems’ main goal is to make sure the full range of medical services remains available in the communities they serve. They’re also optimistic that tight relationships with employed doctors, combined with the resources their systems can provide, will be good for everyone.
Still, the Pennsylvania Medical Society is watching the situation warily.
Last year, it launched an initiative to return doctors to leadership in matters of quality and value in medical care. It’s based on the premise that doctors have surrendered much of their leadership to insurers and the government.
Dr. Gus Geraci, a vice president for the medical society, is watching to see whether doctors will be included among the top decision-makers at the systems that employ them, or become subservient to organizational goals.
But he also stresses there are other arrangements, beyond ownership, that health systems can use to raise overall quality and value, while also supporting independent physicians.
Geraci says he’s heard from employed doctors who complain their health system places the emphasis on patient volume.
However, some independent practices have been guilty of putting volume and revenue above quality.
“There are good actors and bad actors on both sides of that equation,” he says. “The ultimate answer is to somehow align incentives — it doesn’t matter if the doctors are employed or independent — so that everyone is working toward the same things.”
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