Is Physician Employment Here To Stay In This Post-Reform Environment?

Anyone who has worked in the healthcare industry for any substantial period of time has experienced, and adapted to, a seemingly endless array of changes, trends, and developments, not the least of which is the passage of the Affordable Care Act in 2010.

One paradigm shift significantly impacting the physician workforce, as well as the physician recruiting industry, is the growth of physician employment opportunities, and the decline in private practice ownership.

In 2015 thus far, 87 percent of The Medicus Firm’s placements were for employed opportunities. A mere 11 percent of physicians placed through the firm for the first half of 2015 were in private practice opportunities. Ten to fifteen years ago, the majority of physician searches were for private practices seeking to add an additional physician partner/owner, while a much smaller percentage of searches were for employed opportunities.

In 2014 the percentage of placements into employed opportunities was 82 percent, and 75 percent in 2013. About 65 percent of physicians were placed into employment in 2010. (The Medicus Firm, a national physician search company founded in 2001, didn’t begin to track the mix of practice settings prior to 2010.)

Will the pendulum ever swing back to private practice?

The prevalence of employment opportunities over private practice in the physician workforce is similar to what occurred during the HMO push of the 1990s. There is a similar trend toward physician alignment with hospitals and insurers again today, as there was with the HMO boom.

However, over the course of the 2000s, the larger health organizations and HMOs broke apart again, forming back into smaller, physician-owned private practices. Since 2010, history seems to be repeating itself with another wave of employment, perhaps even larger than that of the HMO push years ago. With sweeping health reform legislation now transforming healthcare, the most recent cycle of physician employment seems much more widespread and all-encompassing than before.

Will the proverbial pendulum swing back to private practice again, away from employment, as it did in the 2000s? Only time will tell for certain, but senior executives at The Medicus Firm agree that employment is here to stay for the physician workforce.

Jim Stone, president of The Medicus Firm, states “I think that the employment trend is going to last. The uncertainty physicians feel related to future income is real, and likely isn’t going away. Younger physicians often view practicing medicine as a ‘job’ vs. a career, and they don’t necessarily feel the need or drive to take on practice ownership. Meanwhile, older physicians, who are more likely to have experience in practice ownership, are retiring at unprecedented rates.”

Bob Collins, a co-founder and managing partner of the firm, agrees with his counterpart. “Barring a significant, unforeseen event, I think that physician employment will remain the prevalent job option for physicians well into the foreseeable future.” Collins adds that as long as ACOs are pushed as the desired structure of healthcare delivery, along with an emphasis on value over volume, employment will be preferred by healthcare systems, as it allows hospitals a bit more control over provider behavior.

“Health reform, ACOs, and population health require physician alignment with hospitals and insurers,” Stone adds. “The simplest way to accomplish that, is to employ physicians and compensate them in ways that drive them to achieve the goals of the employer.”

Steve Look, executive vice president of recruiting, adds that the growing burdens from CMS reporting requirements, ICD-10 implementation, and the move away from fee-for-service are more contributing factors which make employment a necessary, if not attractive, practice setting for many physicians.

Furthermore, many newer doctors who started practicing within the last five years have never owned or managed their own medical practice, and quite possibly, they never will have that ownership experience, if employment remains the preferred mode of engagement for the physician workforce, hospitals, and groups.

According to Look, physicians won’t feel they are missing out on the experience of practice ownership. “With doctors’ average student loan debt hovering around $150,000, there is an aversion among the ranks of many newer doctors to taking on any additional debt required to buy into a partnership or start a new practice.” He predicts that, in the near future, any remaining private groups will approach hospitals seeking acquisition or employment deals, as many already have.

In sum, three out of four healthcare executives agree that physician employment is the new normal, and it’s here to stay for the long term. A fourth executive was traveling at press time and couldn’t be reached for comment, so consider it a unanimous prediction that private practice is going the way of the dodo bird and dinosaurs.

The employment trend may contribute to the added mobility of physicians, who may not feel obligated to remain with an employer as loyally as if they were an owner or partner. It is much more cumbersome for a physician to change jobs if he or she must first close down his or her practice, or sell out his or her portion of the practice to the partners. As an employee, turning in a resignation and accepting a new position with a different employer is a much simpler process, although any job change is stressful to some degree.

“It’s not necessarily that younger, newer doctors are less loyal, but that today’s job market is vastly different than that of their predecessors,” concludes Bob Collins. “The excessive demand for their services, combined with the prevalence of employed practice structures, affords today’s doctors the luxury of mobility that their mentors did not have. However, the trade-off, of course, is the autonomy that came with practice ownership, before the increasing regulation and legislation of clinical practice by insurers and government entities eroded much of physicians’ control over their work.”

 

Andrea Clement Santiago is the Director of Communications and Media Relations for The Medicus Firm, a national retained healthcare recruiting company based in Dallas, TX, with an additional office in Atlanta, GA. A former healthcare and physician recruiter, Andrea also covers Health Careers for About.com.

Posted in News, Physicians.
  • Andy Clark

    This is a great article but actually this has been the trend for even longer than this piece describes. I recently “retired” after 35 years of practice: 27 years in a private, physician-owned, independent “eat what you kill” group, a year with a large hospital company as CMIO, and the past 7 in the urgent care setting as a provider and then CMO. My first realization that physicians were changing came in 1999 when I went to graduate school to get a Masters in Medical Management. Our class of physicians all bemoaned the new work ethic of physicians coming out of residency but the professors simply told us to get used to the new norm, adapt and move on, and here we are.

    New physicians we recruited for our growing practice in the 80s, 90s and beyond were all recruited and brought on with income guarantees and then we were shocked that they would often delay a month or more after completion of their training to start practice, worked shorter hours than we did, took more afternoons off, and lived happily on their inflated salaries. They all found out a year later that survival in a practice like ours meant working hard to garner new patients in order to generate an income that exceeded their office overhead once their salary guarantee was up. Most did and we all earned well above average incomes because we were motivated to practice efficiently, see more patients, stay late, work weekends, and yes, we even took care of our own hospital patients and answered phone calls at night. Unfortunately this often came at a cost of less family time, strained marriages, and exhaustion. I had never heard the term “post-call” until one of our new physicians told me she was too tired to come in after a long night on call! Up until then I just called this “the next day” since if I didn’t see patients I generated no accounts receivable!

    When I went into urgent care in 2008 it became apparent that the medical profession had changed, at least in primary care, and that more and more physicians were now employed and worked set hours, no weekends, and rarely admitted or rounded on their hospitalized patients. I was envious of their “banker’s hours”, though my late father was a banker and worked longer hours than they do! Then I realized what business school taught me – we had to adapt to the workforce we are presented since you can’t expect to motivate doctors who come out of residency with mandatory 55 hour work weeks and lower expectations for income and who place more value on being off than being “on”, which I don’t condemn at all but I do wonder how they will ever pay off that mountain of student debt.

    The real beneficiary of this change in the physician workforce, I believe, has been the urgent care industry where doctors and other providers see those patients who could not get in to see their PCP who is working a 35-40 hour work week. When I was in private practice I resented these so called “doc in a box” clinics but when I went into urgent care I realized that while doctors like to think that they own their patients and are their “medical home”, families with both parents working or single parents holding down multiple jobs need care when it’s convenient for them, not their doctor. Hence the rise of the next healthcare revolution of anywhere, anytime access to care with retail-based clinics such as CVS, Walgreen’s, Target, Walmart and the rapid rise in telemedicine as a viable and reliable source for care for the majority of illnesses traditionally seen in doctor’s offices, urgent cares and ERs.

    The only credit I reluctantly give to Obamacare and the resultant changes we are seeing in the physician workforce is that it has moved this country to a more consumer-driven, rather than physician-driven healthcare model since families now know that the first $6000-$12000 healthcare dollars are right out of their own pockets. Today’s patient is quickly learning to be a smarter healthcare consumer and so when they have a sore throat or other minor illness they now have the choice of spending $50 to go to their PCP, assuming they can see them in the next week, $150 at an urgent care clinic, or God-forbid, one of the ubiquitous ER’s now on every corner where the same visit can be $1500, versus only $45 (or often $0 if employer sponsored) for a telemedicine visit, and it should be noted that ALL of these healthcare encounters likely result in the same $4 prescription.

    Welcome to the new access paradigm of 24/7/365 healthcare and the physician workforce and delivery models that meet this challenge by being more, not less available.

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