The Stunning Shift Toward Employed Physicians

The Stunning Shift Toward Employed Physicians



I’m amazed at just how quickly physician employment has swung from small independent practices to hospital-based employment. I’ve heard about it anecdotally from medical societies and malpractice carriers who are seeing their constituents shift, and have certainly observed the shift from individual physicians, but I’m still surprised how fast it’s occurring. A new report from recruiter Merritt Hawkins tells the clearest story I’ve seen:

  • In the last 12 months, 56% of physician search assignments have been for hospital jobs, whereas 5 years ago it was just 23%
  • Just 2% of assignments were for independent, solo practice docs compared with 17% 5 years ago

Doctors are becoming more like regular wage earners, albeit high paid ones. There are some strong drivers of this trend including the need to support health information technology, comply with regulations and deal with health plans. There’s also a desire on the part of a younger, increasingly female physician workforce to have a better balance between work and home life. If anything the forces pulling physicians into hospital employment will strengthen in the near term with the arrival of Accountable Care Organizations and other forms of deep integration.

Yet when a pendulum swings it tends to swing too far. Especially considering how quickly things have moved, I do expect that there will be some backlash to the rush into employment. It’s really not all that much fun having a boss, especially when that boss is a big, bureaucratic hospital with other things on its priority list besides MD satisfaction and career development. Patients may not like it so much either. I know I’d rather see a physician who’s not too tightly tied to a hospital.

So what will the reversal look like? I don’t think it’s going to be doctors rushing to put up their own shingles or buy practices of retiring docs like in the old days. Instead I expect to see a new breed of physician employers who recognize what’s needed to make docs happy, treat patients well, manage compliance, and still make money. One example is so-called direct primary care practices such as Qliance. Time will tell what other forms develop.

Leave a Reply

85 Comments on "The Stunning Shift Toward Employed Physicians"


Hello there! Would you mind if I share your blog with my myspace group? There’s a lot of people that I think would really enjoy your content. Please let me know. Thanks


It’s the best time to make some plans
for the future and it’s time to be happy. I’ve read this post
and if I could I wish to suggest
you few interesting things or tips.
Perhaps you can write next articles referring to this article.
I want to read more things about it!

Stuart Ditchek.MD
Feb 27, 2013

As a physician in practice for over 25 years, the trend is alarming. Physicians who join hospital systems will be very disappointed in their salaries as Medicare and Medicad payments to these institutions reduce in the coming years. Hospitals are businesses like any other, the difference being that the vast majority of their payments are based on Medicare rates. As the federal government continues to allow Medicare to become insolvent, Medicare rates will be cut dramatically over time. As the rate cuts occur, these newly salaried “employee physicians” will see lower paychecks. It will take five years, but we can have virtually 100% certainty that this will occur. Anything else is just not financially feasible. By jumping ship and joining the “safe haven” of a hospital job, they are guaranteeing lower paychecks in a dramatic fashion very soon.

michael southworth,MD
Feb 24, 2013

I totally agree the shift is dramatic. Having after 20 years in private practice just finished my first two years as an employed physician I can tell you the only comforts have been the continued support of patients and a steady paycheck. The rest of it is a wash. Under layers of administrative voodo unsafe or nonproductive activities that one could see changed quickly in private practice now are no longer changeable. I have seen my principles regularly compromised. Buyer beware.

Jul 8, 2011
Jul 5, 2011

The ultimate physician employer is the patient. Physicians who collaborate with their communities and patients will be designing the clinics of the future.

Inspiring models:

Pamela Wible, MD
3575 Donald St. #220 
Eugene, OR 97405
(541) 345-2437

“(S)He is the best physician who is the most ingenious inspirer of hope.”
~ Samuel Coleridge

Jun 29, 2011

Sock puppet?

Jun 27, 2011

Tort reform is not the answer. We need tort elimination. Malpractice awards need to be removed from the court and handled like worker’s comp. The huge awards have never ever been justified.

DeterminedMD, I glaze over when I try to read Ms. Mayer. In general I agree with everything you say.

This post started about employee docs. Fact is medicine has become too complicated to do both. It did not used to be that way. Not every town had medical care. Private practice was the only model. Fee or no fee for service. Docs adopted a town or a population. Technology erupted and the government got into the direct to the voter benefits game. No hope now.

There is no way a primary care doc is going into private practice. There are too many clinics funded by Uncle Sugar to compete with. Collections are stunted. Charges are capped. You have to do it the JACHO way and the CMS way and do it with “meaningful use” which is somehow evidence-based, satisfy the patient for the Press-Gainey surveys, all in 6 minutes. Add a side of “do you feel safe at home” and “are there guns in your house” and you have the future of primary care. Who would want that as a career? No one would design such a beast.

There is also no way to retire on the likely returns on a retirement plan, which you get to fund yourself. Give me matching funds and a defined benefit plan anyday. Give me a state government job.

The big problem is that no one has to care anymore. Patients beware.

Jun 27, 2011

What a screen name!
I hope your bedside manner is not as harsh as your curmudgeonly public persona. If all I had to go on was your comments I would never want you for my PCP.

Jun 29, 2011

Yes, you would be pleased with the status quo that is to be Obamination care, automation health care without dissent or individual attention, just cookie cutter bs that focuses on money, and oh, who gets to pocket the alleged savings that will be made, as there always will be a profit margin in health care, even though politicians won’t admit to that.

MD as Hell is right on the money, “ one has to care anymore.”
Enjoy your provider who quotes standards of care that do not care who or what your issues are.

PPACA. The new abbreviation for “hear the lie enough and it becomes truth.”

Jun 23, 2011

Given tort reform in many(most?) states why are we even discussing medical malpractice? It appears that this system is self regulating since you need a major injury for the lawyer to even consider your case.

“It would be difficult to simply make a list of the types of malpractice cases that are good or bad. Each case is unique and needs to be considered on its own particular merits and facts. But there are certain issues your lawyer will have to work through before deciding if he can accept your case. Since malpractice cases are so expensive and time consuming to pursue, one of the first questions your lawyer will need to address is whether the case is economically justifiable. A lawyer may spend as much as $50,000 to $100,000 in out-of-pocket expenses plus two to three years’ time on a single malpractice case. If a potential case only involves a temporary misdiagnosis of a medical condition, and the correct diagnosis was eventually made with no significant permanent injuries, then that probably is not a good case to pursue. No lawyer would want to risk two years of his time and $75,000 of his money on the possibility that he might recover $25,000 for his client. No client would reasonably want to pursue that type of case either. Legitimate small damage malpractice claims may be inappropriate law suits because the cost to the lawyer, and the potential benefit to the client, simply do not justify a lengthy, expensive legal battle.”

“Assuming the damages are serious enough to justify bringing suit, the lawyer must also determine if there is liability, i.e. did the action or inaction fall below the professional standard of care. He will most likely have to hire one or more doctors as expert witnesses to testify on this issue. Usually at least one expert will be hired before the suit is filed and additional experts are often hired before the case proceeds to trial. These experts will also help establish that the negligent conduct was the actual cause of the injuries complained of. Sometimes this is obvious, and sometimes not. For example, in cases involving negligent delay in the diagnosis of breast cancer, it may be easy to establish that the defendant misread a mammogram, but very hard to establish that the patient would have survived if only the cancer had been diagnosed six months earlier. Complicated medical questions arise such as what type of breast cancer was this? What size was it? What was the cancer cell doubling time? How far had it already spread when the misdiagnosis occurred? This issue of whether the alleged negligence actually caused any injury to the patient, or if so, then how much injury was caused by the negligence and how much was caused by the preexisting medical condition, is the main focus of many malpractice cases.”

“In Georgia lawyers are required to attach an affidavit from an expert witness at the time of filing the lawsuit in court, stating that the facts justify the claim.”

Dr. Mike
Jun 23, 2011

@ John Ballard
If it were up to me to design a system for medical malpractice claims, I would have each county set up a board (to include physicians and lawyers) that would evaluate each claim prior to it proceeding. They would determine if the patient suffered harm, and if that harm could have been reasonably prevented. Valid cases would then go to arbitration. Invalid cases, or those that failed arbitration could go to a loser-pays-all-costs trial.

Jun 23, 2011

@Dr. Mike
Fascinating approach, albeit a political stretch to enact. (I have a hard time imagining what interest groups might support or oppose such a construct.)
Pushing arbitration to the community (county) level would make it tough to abuse since all parties would presumably be obliged to live together with the results. School boards, grand juries and local draft boards are already precedents for such a system If adopted locally via referendum (I’m thinking smoking bans, liquor laws, land use codes, etx.) with state and/or federal waivers it might even be constitutional.
The more I think about it, the better I like it.
Would this board be elected or appointed? And if appointed, by whom?
A five member board with two elected, one appointed and the other two selected by the local medical and bar associations respectively would be a balanced mix.
Just brainstorming.

Jun 22, 2011


Peter– Yes, and so well-put!

Jun 22, 2011

Dr. Mike & Tim–

I understand what you are saying. Physician fear of a lawsuit is quite separate from the odds that any individual doctor will be sued.

The emotional cost of a lawsuit is incalculable. As Justice Brandeis said: there are two things to fear in life: death and litigation.

This why I belive that we need to move away from an adversarial approach to malpractice to a “full disclosure” approach. Yes, we need better laws in many states to protect the “disclose, apologize and offer an early settlment” strategy, but in places where this has been done well (Michigan, for instance) it works.

This does mean that hospitals and doctors s would have to admit that inevitably, they make mistakes. In many cases, more than one person drops the ball, and the hospital needs better systems to reduce the opportunity for errors.

Patients who fall victim to a mistake should be fully compensated.
But it would be much less costly for payors (insurers, hospitals) to settle quickly than to pay the very high administrative costs associated with suits that usually go on for years. Without those exorbitant administrative costs, payors could be more generous when it comes to compensating patients who suffer terrible injuries and still save a fortune. It’s a win-win.

As for doctors, we need to get away from the “shame and blame” that would make you feeling like leaving town if your name were associated with a malpractice suit.

I’d urge you to read Dr. Atul Gawande’s “Complications: A Surgeon’s Notes On an Imperfect Science.” He talks candidly, and with humility, about mistakes he has made as well as near-misses.

If doctors get behind “full disclosure” I think they would be doing themselves, and U.S. medicine, a world of good.

The only way to reduce mistake mistakes is full disclosure: that way doctors and hospitals can figure out how to reduce errors.

Nate Ogden
Jun 23, 2011

Maggie have you ever held a real job at any time in your life? The stuff you say is so far detached from reality I’m honestly curious what sort of life experience you have had to develope these.

“But it would be much less costly for payors (insurers, hospitals) to settle quickly than to pay the very high administrative costs associated with suits that usually go on for years.”

Um, no it isn’t. The reason we figth these claims is becuase it is cheaper then paying them. I would think that is common sense. Do you really think these tens of thousands of executives and defense attorney’s have no idea what they are doing but Maggie Mahar with her hours of internet reserach knows better? Your liberal short commings are flaring up, that mental deficency that allows liberals to be liberals, you can’t see the consiquences of your ideas.

Why is Medicare and Medicaid so easy to rip off via claims, set guidelines that are easy to learn and manipulate.

Why is SS Disability so wrought with fraud, same thing, a regulated and defined set of rules that are more important then the facts.

PigFord discrimination settlement, again nothing but a fraud.

If you passed regualtions like you suggest everyone with any medical error would be getting a payout, even those that are no harmed. Most medical errors don’t result in any adverse consiquences, that is why most medical errors aren’t compensated. If you start reimbursing people for the error not the consiquence your cost will sky rocket. If you start defining all this in an administrative program people will learn it and game it like they do immigration, disability, welfare, and everything else.

“If doctors get behind “full disclosure” I think they would be doing themselves, and U.S. medicine, a world of good.”

full disclousre would never work in the US with trial lawyers. How do you go into court and defend when the doctor has admitted he made a mistake. Even though the argument is about the damage the mistake did and not rather it happened, if you prescribe the wrong pill but the patient never takes it should they be compensated? A trial lawyer will argue mental distress, fear of taking a pill again, and all sorts of BS to get paid.

Jun 22, 2011

Anybody here has knowledge of, or cares to comment on, the Kaiser mandatory arbitration model?

Jun 22, 2011


You’re mistaken.

First, this is what a “closed claim” is: (As you can see, it can be a case that was settled, or a case that went to court.)

“Professional Liability Insurance Report of Closed Claim


A claim is any demand for damages (whether or not for a specified amount, and whether or not a lawsuit has been filed) for personal injuries alleged to have been caused by error, omission or negligence in the performance of professional services, communicated orally or in writing to the reporting insurer or risk management organization.

Pursuant to G.L. chapter 112 section 5C, Form PLICC must be filed with the Board within thirty (30) days after any of the following events:

a final judgment
a settlement, or
a final disposition not resulting in payment on behalf of the insured
For the purposes of determining the date that triggers this filing requirement, please use the following guidelines:

Final judgment – the date of the judgment entered by a trial court. If the judgment is appealed and any information in the original report is no longer correct, a second form must be filed within thirty (30) days of the decision of the appeals court.
Settlement – The earlier of:
the date of the settlement agreement
the date of the release and waiver signed with respect to the licensee reported on the form, or
the date that the settlement agreement or other final document was filed with the trial court.”

Secondly, a description of how the reserachers got the claims:

“We investigated the merits and outcomes of malpractice litigation using structured retrospective reviews of 1452 closed claims. The reviews included independent assessments of whether the claim involved injury due to medical error. Our aim was to measure the prevalence, costs, outcomes, and distinguishing characteristics of claims that did not involve identifiable error.

Study Sites
Five malpractice insurance companies in four regions of the United States (the Northeast, Mid-Atlantic, Southwest, and West) participated in the study. Collectively they covered approximately 33,000 physicians, 61 acute care hospitals (35 of them academic and 26 nonacademic), and 428 outpatient facilities. The study was approved by ethics review boards at the investigators’ institutions and at each review site (i.e., the insurer or insured entity).

Claims Sample
Data were extracted from random samples of closed-claim files at each insurance company. The claim file is the repository of information accumulated by the insurer during the life of a claim (see the Supplementary Appendix, available with the full text of this article at We also obtained the relevant medical records from insured institutions for all claims included in the sample.

Following the methods used in previous studies, we defined a claim as a written demand for compensation for medical injury.15,16 Anticipated claims or queries that fell short of actual demands did not qualify. We focused on four clinical categories — obstetrics, surgery, missed or delayed diagnosis, and medication — and applied a uniform definition of each at all sites. These are key clinical areas of concern in research on patient safety; they are also areas of paramount importance to risk managers and liability insurers, accounting for approximately 80 percent of all claims in the United States and an even larger proportion of total indemnity costs.17-19

Insurers contributed claims to the study sample in proportion to their annual volume of claims. The number of claims by site varied from 84 to 662 (median, 294). One site contributed obstetrics claims only; another site had claims in all categories except obstetrics; and the remaining three contributed claims from all four categories

When an attorney refers to “brining a case” he is not talking about “filing the initial paper work.” Here is a statement from alawyers website:

“Bringing a malpractice case can cost up to $100K. The lawyer has to front that money.”

That $100 K assumes that the case does not go to court. Much of the cost is “discovery” . The average case in the study that I talk about above lasted 5 years. In t he study they talk about how mucch the average plaintiff received if they “settled” vs. if the won a verdict in court.

Becasuse malpractice suits are so expensive, the number of suits has plunged over the past two decades. Award amounts have also fallen sharply.

The investigators in the study (all physiicans) were etremely distrubed by the fact that 16% of plaintiffs who were seriously injured (or died) that was caused by medical negligence suffered through a 5-year case and received no compensation.

If you want to know more, take a look at part 1 of the post –it should be up on within the hour.

Nate Ogden
Jun 23, 2011

I’ll check it tonight

Jun 22, 2011

Talking about the results of jury awards and the reasons for defensive medicine are two different topics. Doctors don’t study Harvard research about what juries did and did not get right; they practice so as to avoid the next lawsuit.

I have intimate knowledge of many malpractice suits over many years. I can tell you that:

Juries do indeed like doctors and are not easily duped. But this is irrelevant.

Lawyers do not bring suits expecting to go to a jury. They play the settlement lottery. They do not spend millions of dollars on malpractice cases; they can spend very little to get to a settlement with a doctor who spends much more than they do for every hour spent on the case.

In my experience, about 8 of 10 lawsuits filed against orthopedic surgeons have no merit. That means that out of 10 board certified orthopedists who look at that chart, 9 would say the suit had no merit. The plaintiff attorney finds the other 1.

If doctors are reviewing charts of cases FILED in county courts, and finding most have merit, then they are… idiots. The cost of defensive medicine is America is huge. The studies are simply not measuring it.

Jun 22, 2011

“They play the settlement lottery.”

Two words: Loser Pays.