A recent study published in Medical Care Research and Review found that hospital systems that employ physicians perform worse on certain quality measures than those who contract with physicians. In fact, patient satisfaction was actually lower when physicians were employed.
This is probably no surprise to independent doctors. It’s not that independent doctors work harder—they work differently. The incentives and motivations are different when you have your own practice, with your name on the door and personal relationships with your patients.
The business model of employing physicians at large systems had good intentions—it was meant to improve the continuity of care and efficiencies for patients. Care would be integrated and seamless, and patient satisfaction and outcomes would soar. But that’s not the case. What has happened instead is that monopolies have formed that have driven up costs for Medicare and insurance payers and reduced competition. The cost of care has increased while the quality has only remained about the same, at best.
Why didn’t it work out as planned for large health systems? Perhaps it’s because of the morale issues inherent in the business model. Employed physicians often face the extreme pressure of big box, volume care that can make them feel like they are running on a hamster wheel all day long. There are productivity measures and data reporting requirements they must adhere to. As a result, the care can feel fragmented, with physicians often overseeing the care of patients they themselves haven’t seen, who have been treated instead by lower level providers. The practice of medicine may feel depersonalized and corporate for physicians, who miss having control over their day and the patients they see. In fact, a recent study suggested that employed physicians were less satisfied with their work than independent physicians for these issues.
Independent physicians are different. Their work is not protected by a large monopoly. They must face the normal market forces of competition, where quality care, patients, and personal satisfaction drives business. Though they feel a lot of the same pressure on their practices that employed physicians face, private physicians still maintain control over their day, their patients, referrals, and how they want to spend their time. They select their own staff members and make their own calendars. Financials aside, this is the ideal way to practice.
Of course, no business owner can simply put finances aside. There are good reasons that so many physicians have sold their practices to large systems. Remaining independent is hard, and regulatory requirements and overhead costs increase, placing a tremendous financial burden on a private practice. But, it doesn’t have to be that way. There are practice models that can boost revenue to levels that would make selling to a health system unnecessary. For example, a blended or “hybrid” concierge program, where patients are offered the option of joining, adds a new, private revenue stream to a practice. Loyal patients who value the time they spend with their doctor join the program, solving two important issues for independent doctors: their practice stabilizes with additional revenue, and patient satisfaction improves.
At the end of the day, providing quality care is what matters most to doctors. Physicians need to think seriously about what they are trading before they decide to become an employee of a health system instead of a private business owner. If the quality of care is not improved, patient satisfaction is wanting, and you’ll be working just as hard as ever, perhaps it’s worthwhile to try something like a risk-free membership model before you make a drastic change.