Hospital-Centric Healthcare

Physician Discontent With Hospital Employment Beginning to Boil

August 5, 2019

Perhaps it’s only anecdotal, but the several hospital executives and well-connected hospital-affiliated physician group leaders I’ve spoken within the past few weeks tell the same story: a spate of resignations by hospital-employed physicians.

Yet, at the same time, the healthcare industry press reports that more than half of the country’s physicians practice in hospital-affiliated groups. Perhaps that’s the problem.

Certainly, as the size of hospital-employed physician groups has grown, bureaucracy has increased. The stories of broken employment promises, the use of “quality” as an excuse for the reallocation of funds away from physician compensation, and so on, are leading to increasingly disgruntled physician employees.

This, at the same time that CMS (e.g., as in their several proposed regulations released July 29, 2019) (1) keeps expanding the list of procedures that can be performed, that is performed and reimbursed, in ambulatory surgery centers, (2) demands (high) price transparency on the part of hospitals, and (3) continues to recommend the reduction in rates paid to hospital outpatient departments, with the ultimate goal being parity with ASC fee schedule rates, which will be, for all intents and purposes, the end of the hospital outpatient department.

So what does this mean for you?

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.

There are tremendous opportunities to gain patients lost in the shift of physicians leaving hospital-affiliated groups. Many of those patients are already themselves upset by the bureaucracy of hospital-affiliated practices and, especially, by the revolving door of medical care. They, too, are increasingly unhappy with hospital-centric healthcare. Yet, many of the physicians that those patients might follow outside of the hospital system will be unable or unwilling to take the entrepreneurial leap and thus pull their patients with them. Those “employee minded” physicians will be on the hunt for new jobs, too, with regular paychecks and little to no desire to ever become partners.

Additionally, the trend continues to show that surgeons as well as physicians performing what some might call “surgery-like” procedures but which are, for all intents and purposes, surgery, that is, interventionalists, for example interventional radiologists and interventional cardiologists, should all be considering the development of, or investment in, outpatient facilities, that is, in ambulatory surgery centers.

And, hospital-based physicians, certainly anesthesiologists and radiologists, must significantly expand their scope to include outpatient facility based practice. If not, the number of cases remaining within the hospital setting will require a vastly different way of staffing (i.e., fewer physicians) and of organizing your group.

Change is in the air. For most that means the smell of fear. But for others, it’s the smell of opportunity.

Leave a Reply