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.

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84 Responses for “The Stunning Shift Toward Employed Physicians”

  1. 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

  2. michael southworth,MD says:

    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.

  3. Stuart Ditchek.MD says:

    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.

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