For physicians still adapting to a health care environment in flux, the
decision to become a salaried physician with a larger group or hospital can be
seen as one way to escape increasing administrative burdens or achieve a more
satisfactory lifestyle. The potential benefits of private practice are
numerous; however, unseen problems inherent in both options could prove costly
in the long run if proper attention is not paid.
John A. Bergfeld, MD, works with the Cleveland Clinic in
Cleveland, Ohio one of the foremost models for the salaried employment
structure. He said in an interview that he feels the advantages of the large,
salaried group structure are many.
There are lots of advantages, Bergfeld said. I am paid
a salary, which I negotiate every year
that does not mean I am not
strictly cost-accounted I and the clinic know what my contributions are
but I do know what I am going to make, and I can negotiate that.
If I am not happy with what I am being paid, I can challenge
that, he added. Often, a challenge that is presented right will
result in more money.
Regardless of the difficulties inherent in making a decision, physicians
have noted a definitive trend toward salaried employment. It is a trend being
pushed from both sides.
The fallacy in many cases is that this has been portrayed as an
issue where hospitals are out there aggressively looking to purchase practices
to gain market share, and in reality in many cases physicians are looking to
sell their practices to hospitals to get out from under their administrative
burden and their rising overhead, Kevin J. Bozic, MD, MBA, said.
It is a complex issue because it depends on the circumstances, but
the big picture is that physicians have been feeling squeezed by rising
overhead, flat reimbursements and increasing administrative and regulatory
burdens and they really like the thought of being able to outsource
their practice management to someone else
and focus on patient
care, he added.
A hospital seeking employed specialist physicians may be looking to
stabilize their medical staff and have a consistent number of specialists among
varying clinical disciplines cover ED call; provide indigent care (which is a
requirement for not-for-profit hospitals); rationalize large capital
investments (such as electronic health records); control operating costs;
implement quality initiatives through better alignment with their physicians;
and prepare for anticipated changes related to health reform, including
accountable care organizations (ACOs) and bundled payments, Bozic added.
Hospital-physician partnerships are far from the only option, however,
as the shift away from small private practice continues to grow and further
possibilities are explored.
There is a definite trend for physicians to be salaried as part of
a foundation, large clinic or governmental agency, said Douglas W.
Jackson, MD, an orthopedic surgeon in Long Beach, Calif.
Currently, the salaried positions are competing against the
fee-for-service (FFS) model. If the number in FFS decreases, the amount paid
for the salaried positions will decrease. It is simply whatever the supply and
demand is for the salaried positions.
According to Bergfeld, younger physicians and residents just entering
practice are a significant part of the trend toward salaried employment, as
many of them are opting into positions where they know they can cater to needs
that differ from those of previous generations at similar walks of life.
I think there is a whole different culture compared to 20 years
ago, Bergfeld said. Almost all of the residents coming out now are
married, almost all of them have children. Lifestyle is very important to
Their argument is they have to have some family time, he
added. I think they carry that over when they decide to go into practice.
They are looking for a group because the group can allow them to do that.
Consistency of hours and a lifestyle that is easier to digest are
palatable to these younger physicians, Jackson said. Additionally, not having
to face the uncertainty or troubles associated with starting ones own
practice can look much better than the alternative.
My recent experience is that many young surgeons want a guaranteed
income, immediate patient load, less night and weekend work, and they do not
want to take on the risks of their own business and the uncertainties of
changes in medicine, Jackson said.
Given recent health care reform and numerous changes to regulations, a
physician looking to set out on his or her own could find the situation is more
difficult than he or she had envisioned.
For those who do not think risks and uncertainties are enough to warrant
opting away from private practice, the money typically associated with being in
private practice can be a significant benefit.
On the other hand, for salaried physicians who are comfortable with the
lifestyle their pay affords them, Bozic said one of the most challenging
aspects of the partnership or employment can be a loss of autonomy.
In general, physicians tend to be independent, autonomously
functioning people who do what they believe is in the best interest of their
patients, he said. There is a feeling, right or wrong, that somehow
being an employee gives you less professional autonomy and therefore less
ability to control your own destiny and that of your patients.
These physicians, according to Jackson, are not deterred by
starting their own business and taking some risk. They view the risk and
potential increase in work as an acceptable cost for full independence.
That independence can allow physicians to determine their own courses of
action regarding the hiring of staff, management of business and development of
a successful practice.
However, there are many difficulties associated with solo or small
group employment, Bert said. They include secured payor contracts
with other groups or HMOs in the area that may exclude [a physician] from
seeing a large percentage of patients, significant competition which could
decrease patient volumes, and difficulty in taking emergency call and patient
coverage when [the physician] is out of town.
Individual freedoms are one aspect trust is another. Physicians
who remain in private practice may simply not feel comfortable putting together
I think they feel they may not get a fair deal with someone
else, Bergfeld said. That is what has broken up a lot of groups:
The guys are good orthopedic surgeons, they just do not trust each other or
feel they are not getting a fair deal. The skeptical ones figure rather than
getting into all that, they will just make what they make on their own.
Money and lifestyle are only some of the dynamics to consider when it
comes to determining what path to take, according to Jack M. Bert, MD.
There are multiple factors that require analysis when a fellow or
resident is trying to determine if he wants to go solo, join a small practice,
join a larger group, join a multispecialty group, become a hospital employee or
join an academic practice, Bert said. It requires significant
personal introspection to decide which type of employment will fulfill the
physicians expectations. by Robert Press