The migration of physicians from independent to employed positions has been an ongoing trend for several decades. According to the 2014 AMA’s Policy Research Perspectives, in 1983, as many as 76.1% of physicians owned medical practices. In addition, most of these practices were solo in nature, a model that has fallen out of favor as medical offices adopt collaborative population health methods over the traditional single provider model. According to the AMA’s report, the only statistic that has remained relatively consistent is that of the independent physician contractor, representing 4-7% of the physician workforce over the last 20-30 years. Statistics on physician employment demonstrate that although physician ownership in medical practices has declined over the years, it is still quite prevalent. In 2014, 32.8% of physicians were direct employees of hospital systems, whereas 50.8% were either complete or partial owners. This was a reduction from 60.1% ownership in 2012. Of the physician owners, most were in surgical subspecialties, such as orthopedic surgery, and the least likely medical groups to retain ownership were pediatricians and emergency medicine physicians.
Regardless of the predominant employment structure for physicians, which surprisingly seems to still be that of ownership, the interest in business and entrepreneurial pursuits is clearly diminishing. Younger physicians tend to accept more employed positions as compared to their older predecessors. Women are also less likely to obtain ownership; based on the 2012 AMA Perspectives data, only 38.7% of women were owners, compared to 59.6% men. This is exceptionally significant considering that close to 50% of physicians today are women.
As hospital systems increase recruiting strategies to attract physicians and acquire privately owned medical practices, the motivation behind such power moves becomes crystal clear. Hospital systems require physician buy-in (talents and labor) in order to remain relevant in an unstable healthcare climate. These billion-dollar businesses are not immune to the changes in medical legislation and reductions in insurance reimbursements. Hospital systems want to not only stay in the game but to level the playing field. For the hospital system, employed physicians are great investments, helping to guarantee a referral base to surgical sub-specialists and for hospital admissions –the two highest income generators for hospital based networks. In addition, the hospital system inherits the patient volume from the primary care providers and effortlessly extends the client base and professional footprint.
The monopoly on healthcare may not be as obvious to the patient consumer or the bright-eyed, bushy tailed medical graduate, but to the well-trained eye of an experienced medical professional, is there still a benefit in working for “the machine”? Dr. April Boswell seems to believe so. Dr. Boswell practices as a dermatologist in Charlotte, NC, for a large hospital system, and she has first-hand experience working in both the private and employed practice models. “We were told in residency never ever join a multi-specialty or hospital system because you will never make what you should,” says Boswell. In her opinion, the benefits of working in a hospital system include, “a great retirement plan, flexibility in working hours, and providing great medical care for populations that would otherwise not be able to pay to see a private dermatologist.” In terms of flexibility, she feels that she has her physician administrators to thank for being strong advocates for work and life balance. “You can’t work part-time in private practice,” says Boswell. In private practice, physicians may work longer hours and experience more pressure to perform, and they are not always guaranteed to earn income, especially when starting a practice. The “employed model” has its disadvantages as well, such as less freedom in practice set-up and style, less contract negotiating power, and overall decision-making. Despite some of the negatives of working for a hospital system, Dr. Boswell’s sentiments in terms of better quality of life, guaranteed vacation time, and collegial atmosphere are shared nationally by thousands of physicians that have chosen to be an employee over owning a private practice.
Private practice is not yet extinct, but it has several challenges ahead if it plans to survive the ascension of the hospital system. As physicians look for employment, the bigger question looming in the background is are we truly choosing our practice environment, or is it choosing us? Physicians are confronted with mental fatigue and burn out, uncertainty, fear, and the curse of complacency. Most physicians want to practice medicine without taking on the responsibility of running a business. Unfortunately, our weaknesses are exploited, and our nightmares become a reality. We are disillusioned that we will escape the headache of private practice only to inherit other undeserving headaches. The fears of mastering customer service, accounting, managing non-clinical staff, and taking financial risks are still part of some of our daily responsibilities, but as employees we are no longer compensated for carrying out these tasks. Growing in ignorance of medical policies and lacking in business savvy and true professional autonomy only make us weaker members of the medical profession. Over time we become less valuable and easier to replace. I gaze upon the promises of the hospital systems with a half grin and side-eye, yet I am nonetheless empathetic to my physician colleagues, who just want to be happy and practice medicine. This, too, is my deepest desire — to be happy and just practice medicine.
Article sources:
Kane CK, Emmons DW. New data on physician practice arrangements: private practice remains strong despite shifts toward hospital employment. Chicago: American Medical Association; 2013. Available from: https://www.ama-assn.org/sites/ama-assn.org/files/corp/media-browser/premium/health-policy/prp-physician-practice-arrangements_0.pdf. Accessed July 30, 2014.
Peterson, L. E. et al. “Fewer Family Physicians Are In Solo Practices”. The Journal of the American Board of Family Medicine 28.1 (2015): 11-12. Web. 19 June 2016.
