The growing importance of population health management and value-based care as well as market share and leverage with payers is spurring much of the trend toward physician hiring. The shift toward the employed physician model has grown from a stream to a deluge, accounting for more than 90% of new physician job openings at hospitals, medical group, health centers and other healthcare facilities, Merritt Hawkins reports.

The findings were made public Monday in the Irving, TX-based physician recruiters’ annual report, which tracked 3,158 physician and advanced practitioner recruiting searches the firm conducted from April, 2013 through March 2014. Of these assignments, more than nine in 10 featured practices in which newly recruited physicians would be employed. Less than 10% of the recruiting assignments featured independent practice settings, such as partnerships, concierge practices or solo practice settings, down from over 45% in 2004.

Travis Singleton, senior vice president at Merritt Hawkins, says the Patient Protection and Affordable Care Act, with its emphasis on population health and value-based care, and the growing importance of market share and leverage with payers is spurring much of the trend toward physician hiring.

“Everyone has glommed on to the employment model; physicians because they are trying to mitigate risk and they are looking for financial help and they have all the issues of medicine and small business concerns,” Singleton says.

“On the other side, whether you are a hospital, urgent care, concierge or some mix thereof, it enables you better to influence the behavior of your clinicians. And increasingly, in all of these delivery systems, that clinician is not just a physician. It’s a team health environment… and the only clear mechanism that allows you to push all those different cultures and providers and modalities in one direction is employment.”

Despite the persistent grumbling from many physicians about a loss of autonomy as employees, Singleton says the Merritt Hawkins search results paint a different picture.

“This is not a survey where I may catch someone on the wrong day and this is what they want to do or what they are threatening to do. This is what they did in the past year,” he says.

“It clearly shows that if you’re a newly hired physician or provider, whether you’ve been practicing for 30 years or you are just out of residency, you have a nine-in-10 chance of taking an employed job. I am hard pressed to see that we are forcing people into that model. You wouldn’t see such drastic numbers if that is not what both sides wanted.”

For the eighth straight year, family physicians and general internists were the top two recruiting requests. Singleton says the demand for primary care physicians comes in large part from their enhanced roles as team care leaders for accountable care organizations and other value-based delivery networks.

Family Docs Remain the Top Search

“On a singular search the difficultly level for finding primary care physicians is the same as it has been in years past,” Singleton says. “Unfortunately we aren’t talking about single searches in family practice anymore. Primary care is the name of the game. It may not be an integrated network calling me for one or two docs to fill a void. They’re calling for 50 or 100 at once because that is the only way to accomplish their population health goals.”

While the compensation for primary care physicians remains considerably less than most subspecialists, Singleton says progress has been made in recent years.

“Primary care compensation never will outstrip specialists. That is not how our system is built,” he says.

Singleton says the rise in compensation for primary care doctors “is as much about demand as it is about who is paying them.”

“You see this in pediatrics as well. In years past when it was private, smaller groups they could only do so much. Now you have hospitals that have the downstream revenue, inpatient revenue, they are able to be more competitive.”

The demand for primary care access has also fueled search requests for nurse practitioners and physician assistants, which increased by 320% over the last two years, Merritt Hawkins reports.

“In simplistic terms you have to preserve access. Being able to give patients the portals to get the right care at the right place by the right person,” Singleton says. “Most Americans today are dealing with some sort of health issues: obesity, diabetes, mental health. Our specialists are maxed out. Who can do the coughs, sniffles, and basic care? Some would argue that a nurse practitioner or a physicians assistant is in a better position to give more attention to those types of patients; trying to keep them out of the ED, in other words.”

The dire need for primary care access has prompted hospitals and other providers to ignore the territorial sniping between physicians’ associations and advanced practice nurses.

“They’re saying ‘we are not going to wait on scope-of-care arguments. This is my primary care access mission. This is my population health mission. I cannot do this with physicians alone, so I am making the call. We are employing 100 NPs this year,’” he says. “You have to practice at the top of your licenses. You cannot get out of this alone without help.”

A notable exception to the shift toward employed physician models is the rise in concierge practice. Merritt Hawkins conducted 32 searches last year, up from 10 searches two years ago. Singleton says his search data probably underreports the move towards concierge services because recruiters often aren’t needed.

“If you are a provider who is fed up, whether it’s your legal costs or compliance or the business of medicine itself, the easiest shift you could make is to become a concierge physician,” he says.

The shift also meshes well with the move toward consumer-driven healthcare. “We are seeing some of the same trends in urgent care and freestanding ERs towards convenience medicine,” Singleton says.

“People are coming to understand this consumer-driven, convenience care area of medicine and the push to outpatient care. Concierge is a good reflection of that. Healthcare for so long has been insulated to the consumer. They haven’t had to appeal to the consumer like they do now.”

Merritt Hawkins’ report also shows that the move toward value-based physician incentives stalled in the past year. In 2013, 39% of Merritt Hawkins’ search assignments offered a production bonus featuring at least one value-based metric such as high patient satisfaction scores or low hospital readmission rates.

Speed Bump for Value-based Care

In 2014, that number dropped to 24%, which Singleton says indicates that employers are struggling to create physician compensation formulas that incorporate both volume- and value-based metrics.

“They love the idea of going to a value- and outcomes-based compensation model, but we are all struggling with how to accomplish it,” he says. “We saw a spike last year and everyone said ‘Oh gosh! This is where we are going!’ This year we saw a bunch of health systems say ‘let’s wait until we have a clearer picture of the ACA.’”

Physicians are starting to push back too, Singleton says, but not because they’re opposed to value-based compensation.

“People think they are just greedy physicians who want to be paid. Not the case,” he says. “Most physicians will tell you this is the right direction for healthcare. They just want a fair formula in place, especially when you look at team-based care and integrated networks, where you have all of these different mechanisms and value components that they are supposed to be judged and paid on. There are some things that we don’t know how to adjust yet. And that is what the numbers reflect.”

In the coming year, Singleton says he expect providers will continue to adjust value-based compensation while waiting to see how the ACA plays out.

“You are going to see people start to increase what that total compensation affects,” he says. “Even last year, when we saw that big spike, we looked at all of these different programs that entered into this value-base and found it only influenced 5% or 10% of the total compensation.”

“And we have to have a better roadmap of the ACA to know how we are going to be judged and how the government is going to pay us before we can put a format in place that measures it.”

From HealthLeaders Media, by John Commins, June 30, 2014