Some leaders of hospital-based groups, and I use the term “leader” broadly, believe that their groups are a function of the hospital. If the hospital no longer wants to contract with them, then that would be it.
It will be decades until society swings back away from “it takes a village” to “it takes a strong individual” and the price we’ll pay in the interim will eventually be rationing, death counseling, and other warm and fuzzy attributes of a so-called communal society. Heck, this makes its opposite, the so-called “greed” of rugged individualists, seem timid in comparison.
Ride along with Mark for a reminder about the danger of a "sure thing" as it pertains to hospital-based employment.
Over the past decade or so, hospitals have spent countless hundreds of millions of dollars “aligning” physicians. But now it's hospitals that are begging to be aligned.
The word “hospital” means “bureaucracy.” The epidemic of discontent among hospital-employed physicians is reaching all time high levels. Instead of seeing the outbreak as a negative, let's explores some of the opportunities that this trend presents.
Most of my clients are not hospital employees. They are large groups or highly entrepreneurial physicians who see these changes in the overall market as rocket fuel for their success.
Both Washington and Lincoln were exceptional. Thrust into lives that they wanted but didn’t want, from pasts of trial and error, and failure upon failure. Self-promoters whose careers didn’t follow a smooth arithmetic progression.
How is that even possible, you ask? After all, you were told that there’s safety in what is essentially hospital employment.
Well, it’s not only possible, it’s likely the tip of the iceberg, not only for “stand alone” captive physician groups like WSUPG with its 873 employees, but for entire hospital hospital systems made more fragile, not stronger, by their size.
Hospital systems across the country suffer from bloated fixed costs, huge payrolls, layers and layers of bureaucracy, and management by managers, not by entrepreneurial thinkers.
Instead of bringing what the proponents of hospital-centricity promised would be stability, the actual result is becoming much different: The larger the hospital-centric system is, the more sensitive it is to declining payments from private payors, and the movement of procedures out of their facilities to freestanding, and often independent facilities, from clinical laboratories, to imaging facilities, to ASCs. And now, the federal government is getting increasingly into the act: It has cut reimbursement to hospital outpatient clinics, and has signaled its decreasing support for outpatient surgery performed in hospital outpatient departments (“HOPDs”)as opposed to in freestanding ambulatory surgery centers.
Hospital employment was hardly ever a good deal for any physician. The difficulty in holding a hospital together is tough enough. The difficulty in holding a hospital system together is even greater.
But both pale in comparison to the challenges of holding a hospital system plus its directly or indirectly employed physicians together. A shock that could have been absorbed by the pure hospital-side of the business can be fatal to the enormously expense-ridden hospital-plus-physician structure.
Why You Need to Know
1. Employment, directly or indirectly, with hospitals is far from “safe.” In fact, it may be far riskier for physicians.
2. In the event that a tightly aligned physician group fails, the employed physicians have no offices, no patient records, no staff, no “nothing” readily available to them to re-start independent medical practice.
3. For outside groups, the failure of a hospital-controlled medical group presents the ability to cherry pick physicians who may be desperate for quick reemployment. That is, unless those physicians are barred from accepting employment in the area due to ill negotiated covenants not to compete, assuming that they are enforceable.
4. The failure of a hospital-affiliated medical group will disrupt referral patterns, presenting opportunities on both the services-side and the facility-side for independent physician practices and their affiliated facilities.
Comment or contact me if you’d like to discuss this post.
Mark F. Weiss