02:09
Faizan
This article explores one of the most challenging and interesting questions that hospital boards are facing as they move into 2014 and the future. Simply put should hospitals be Physician Led or not?
This article is written within the context of healthcare consolidation that is occurring at all levels. At the hospital level, hospitals are merging into other hospitals and independent hospitals are finding it more challenging to thrive on their own. At the hospital-physician level, the system has shifted toward one in which nearly 50 percent of all physicians are employed by hospitals and health systems, and nearly 80 percent of all physicians have some sort of financial relationship with hospitals. There is also increased consolidation among payors (although a great deal of this consolidation has already happened over the last 10 years). This has resulted in only several key payors existing in most markets. Finally, payors are increasingly re-entering the healthcare provider business, either as a hedge against provider market power in certain markets or in an effort to attempt investment in areas outside of insurance.
The healthcare industry saw a wave of physician employment by hospitals back in the early 1990s, and hospitals are again pursuing employment of physicians as a core strategy. Employing physicians tends to work in a fee-for-service environment and should may not work as hospitals move forward into an ACO managed-care type of environment. The downside to a physician running a hospital is that it is expensive for the hospital, and there are increasing anecdotal discussions about the opportunity costs or losses while the physician concentrates on running the hospital. This time could have been spent seeing patients, generating revenue, and improving the quality of care. The goal needs to be to have the physicians utilize their expertise increase their productivity. Here, the average productivity of the employed physicians seems to be declining. Initially, as hospitals began to again employ physicians, there had been great focus on hiring the most productive physicians. Now it seems as though many hospitals have an "all in" strategy and
This article is written within the context of healthcare consolidation that is occurring at all levels. At the hospital level, hospitals are merging into other hospitals and independent hospitals are finding it more challenging to thrive on their own. At the hospital-physician level, the system has shifted toward one in which nearly 50 percent of all physicians are employed by hospitals and health systems, and nearly 80 percent of all physicians have some sort of financial relationship with hospitals. There is also increased consolidation among payors (although a great deal of this consolidation has already happened over the last 10 years). This has resulted in only several key payors existing in most markets. Finally, payors are increasingly re-entering the healthcare provider business, either as a hedge against provider market power in certain markets or in an effort to attempt investment in areas outside of insurance.
The healthcare industry saw a wave of physician employment by hospitals back in the early 1990s, and hospitals are again pursuing employment of physicians as a core strategy. Employing physicians tends to work in a fee-for-service environment and should may not work as hospitals move forward into an ACO managed-care type of environment. The downside to a physician running a hospital is that it is expensive for the hospital, and there are increasing anecdotal discussions about the opportunity costs or losses while the physician concentrates on running the hospital. This time could have been spent seeing patients, generating revenue, and improving the quality of care. The goal needs to be to have the physicians utilize their expertise increase their productivity. Here, the average productivity of the employed physicians seems to be declining. Initially, as hospitals began to again employ physicians, there had been great focus on hiring the most productive physicians. Now it seems as though many hospitals have an "all in" strategy and
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