By David Martin, president and CEO of VeinInnovations
In the 1990s, hospitals were hiring physicians, trying to snap up successful practices to increase their market share and grow their referral bases. Hiring physicians turned out to cost the hospitals money. Typically, hospitals paid doctors a flat fee. Without an incentive to see more patients, doctors often saw fewer patients than they had before. Hiring slowed, and hospitals divested themselves of most of the practices. In 2011, hospitals significantly increased their hiring of physicians, and this time, the trend is likely to continue.
Running your own practice is hard work. Those of us that do it are responsible for administrative tasks, maintaining electronic health records, negotiating payments from insurers, billing, and retirement benefits for our employees and ourselves. You’ve got to be dedicated, willing, and able to take on the extra hours. In the recent round of hospital hiring, many physicians weigh the benefits of having someone else handle the day-to-day operations. Hospitals are businesses, too, complete with knowledgeable staff that can help a practice grow. MDs are very smart people, but they might not have the best business acumen or care to do so. Many physicians want to shift from running a practice to focusing solely on patients.
Those who are thinking of taking on a hospital job may find the deal is even sweeter than it once was. A 2010 story on NPR interviewed one doctor who was offered a raise and a bonus if she’d take the hospital job. Part of the strategy behind hiring doctors today is to increase patient referrals, and hospitals also hope that doctors working for the same organization will better coordinate patient care. The impact of the Affordable Care Act (ACA) cannot be overlooked, either. Seven pages contained in the ACA are already stirring up the way medicine is moving; Accountable Care Organizations (ACOs) reward efficient, integrated models of care.
In typical fee-for-service practice, you’re paid based on the medical procedures and tests you provide for the patient. ACOs are meant to change that model and replace it with one that rewards based on the overall health of the patient. In theory, and hopefully in practice, your ACO will make money by keeping patients healthy and out of the hospital. ACOs are a network of doctors and hospitals that will share responsibility for the patient’s health. ACOs provide financial incentives for the network to cooperate, avoid duplicate tests, and for keeping costs down. Prevention will be incentivized as will better care for patients with chronic diseases.
As hospitals race to hire more physicians, some worry that even with ACOs costs will increase. Hospitals are large organizations and they can negotiate with insurance companies with more clout than an individual practice can. We’ll have to wait and see.