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Doctors as Employees

The days of doctors running their own offices and starting practice are coming to an end.  As this graph from today's Wall Street Journal shows, since 2005 more doctors are becoming employees of hospitals rather than owning their own medical practice.

The reasons are not that hard to understand.  Medicine has become a complex and difficult business.  Dealing with dozens of different insurance companies, Medicare,  Medicaid and the hassles of being an employer are not what doctors are trained to do.  The days of the simple medical practice with a receptionist and a well trained (smart and loyal) nurse at the doctor's side are long gone. 

Why don't doctors in the U.S. have electronic medical records, as does much of Europe and other developed countries?  They cannot afford to capitalize the technology or  support the IT infrastructure.  A hospital organization can!

In my medical community only one of the recent Internal Medicine residents stayed in private practice.  And he joined his dad!  The rest leave to work for Kaiser Permanente or be employed as hospitalists.  The young doctors know they cannot survive with the insurance reimbursements for primary care.  They are not established enough to set up concierge (retainer) practices so a steady paycheck with benefits, insurance coverage, cell-phone, electronic medical record, time off for continuing medical education looks like a very nice deal.  In fact it looks like a nice deal for doctors that have been running their own practices and they are leaving for employment in record numbers too.

Why do hospitals across the country want to employ physicians?  Everyone knows that the doctor is the entry portal for patients.  Even hospitals lose money on primary care services.  But our insane reimbursement structures pay for procedures, imaging, tests, scans, days in beds,  and lots of stuff that generates billings.  Primary Care becomes the lost leader.

Until we get a grip and place value on prevention and primary services for patients that pays for "thinking" rather than "doing", we will never get our financial house in order.  There is nothing wrong with employment as long as it is designed to produce real benefits and improve quality for patients.  Aligning different specialties of physicians with hospitals to drive efficient quality care could lower costs and improve service.  Time will tell if that is a direction that we are going.  Right now it is the same system with a different owner on the shingle.


Sonam Sen said…
Heart disease is one of the most dangerous disease which takes thousands of life every years all over the world. If we know its symptoms and Treatment for heart disease. We can prevent is to large extent.
Anonymous said…
I had heard that doctors can't work directly for a hospital but have to be hired and paid from a separate agency, and there was a reason for this. Is this accurate?
Do you think that employed physicians will consistently provide equivalent service compared with private physicians?
Toni Brayer, MD said…
Pammi: quit spamming my site.

Anon: In California physicians who see patients cannot be employed (except by academic centers or community health centers). Physicians join groups (like Permanente) and they are employed through Foundations (like Kaiser or Sutter Health). In other states physicians are directly employed by hospitals or companies.

Michael: I think it depends upon the employment model and the culture of the organization. I don't think there is any question that employed physicians can provide equal or better service. Look at Mayo, Geisinger, Cleveland Clinic, and many other employment models that are at the top of quality and service.
DrPaula said…
There is definitely something broken in a system that pays us to do more tests and procedures. It seem that if a physician has less patients he/she does more tests/visits etc. to each one. How do we manage this?

As a specialist I do not see any incentive to be "hospital owned" I work in different settings and can give better care in my private office as Dr. Michael Kirsh expresses concerns about.
The reasons are not so difficult to understand. Medicine has become a complex and difficult. Trading in dozens of different insurance companies, Medicare, Medicaid and employer does not have the hassle of what doctors have been trained to do. simple day medical practices with the receptionist and a good education nurse doctor side are long.
Anonymous said…
Crystal River Package holidays 11:11 5:43 AM: You are just copying what Dr.Brayer wrote in her Blog post from her second paragraph and trying to advertise your spam.
Toni Brayer, MD said…
Anon: You are correct. I am seeimg more and more of these spams that use nonsense words to get their links in. I try to delete them when I can. There seems to be no way to stop this but it is obvious when someone is a real commenter compared to these.
linkwheel said…
Glorious info here. This interesting put up made me smile. Perhaps should you throw in a few footage it'll make the whole thing extra interesting. Anyway, in my language, there are not much good supply like this.
link wheel said…
Daniel, yea I can see what you did there. I actually liked that part, but hehe I'm not that harsh like my dad with these things. He at all times tells me crazy stories again in the day and calls me a loser. I assume it's time I transfer out of my parents' basement LOL. Aaanyways, what about you? what does your dad assume xD" Anyway, in my language, there usually are not much good source like this.
sim so dep said…
Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I'll be subscribing to your feed and I hope you post again soon.
so dep said…
Can I make a suggestion? I feel youve bought something good here. But what should you added a couple links to a web page that backs up what youre saying? Or possibly you would give us one thing to take a look at, one thing that may connect what youre saying to something tangible? Only a suggestion. Anyway, in my language, there aren't a lot good source like this.
It cannot have effect in actual fact, that is what I think.

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