How Physician Employment Affects Hospitals, Patients

Karen Minich-Pourshadi, for HealthLeaders Media , December 2, 2011

Unquestionably, employing physicians is good for a hospital’s market share and the physician’s financial stability, and it also can have an impact on patient care. “Employment has the likelihood of eliminating duplicate and often not needed service offerings within a healthcare community,” says Nantz.

Moreover, he explains the physicians now have access to a common computer system that can help to defragment a patient’s care and prevent redundant tests. “If we keep the patient within the system, everyone has access to the same information and [patients] can pass easily through the system. We reduce duplicate tests and make sure they receive more efficient and thorough care,” Nantz says.

Essentially, the employed physician refers within network, thus improving the continuity of care and the hospital’s efficiency by preventing the unnecessary duplication of services. Fewer unnecessary tests also results in a decrease in cost for the payers and patients.

“We believe that by having a large hospital system and medical group that you not only have market leverage, but that gives us the ability to work with the payers to identify where we can partner to reduce costs and the number of initiatives,” says Greg Rusnak, COO at GHS. “We are aligning our group to focus on outcomes, cost of care, and patient satisfaction. You can’t do that without physicians being integrated and to the degree you do that it can have an effect on market share.”

Payer leverage is what most hospitals are striving for, says Nantz, and payers are looking for a strong comprehensive physician network to give beneficiaries access to the doctors they want.

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6 comments on "How Physician Employment Affects Hospitals, Patients"

DonS (12/8/2011 at 1:22 PM)
A complex issue and while some points are valid I would contend that care integration can be achieved without MD employment. The short term effect is to increase costs for patients as ancillary services previously billed by the MD on a CMS 1500 are now billed by the hospital on a UB92. The reimbursement difference is staggering. And consolidation of the providers wont keep down costs - if what I have heard about Sutter Health in CA is true. Lastly, if employed docs keep all the care within the system walls, is that really best for the patient? What system can be best in everything? I'd like the doc to make the best choice for me without having to worry about his employer.

Paul Sauer, MD (12/3/2011 at 7:45 AM)
Once the doctors are controlled by the hospitals and government, their compensation with fall. The doctors will have no leverage to negotiate salary. Will it become like England where doctors make $60,000 to $70,000 a year?

David Keller MD (12/2/2011 at 8:05 PM)
Missing from the article is the effect employment can have on physician productivity... I've seen clear evidence that employment makes physicians less productive and often less responsive to the needs of their patients. It's not all bad, but there are a number of negatives not discussed in the article.




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