More doctors are leaving private practice for positions in hospitals and health systems—and they report the new model of doing business looks promising. The benefits of being of an employed physician are anticipated to include “improved communication, greater transparency, better physician job satisfaction and a more patient-centered focus,” says a survey by the American College of Physician Executives.

“It’s the reality, and healthcare needs to accept this reality,” said Peter B. Angood, MD, CEO of the ACPE. “Everything is moving in the direction where physicians want to be employees…I’m not a zealot of it, but it’s a phenomenon that’s happening, and we need to embrace it.”

A 20-question survey sent to 10,000 members of the ACPE was completed by 617 respondents. Of those, 59 percent said that at least 50 percent of the physicians in their healthcare organization were directly employed—and 18 percent of the respondents said all physicians in their organization were directly employed.

Not Like the 1990s

This isn’t the first time the healthcare industry has trended away from private practice and toward hospital-employed physicians. In the early 1990’s, physicians began flocking to healthcare organizations as a part of the Managed Care trend, which later fizzled out amidst a consumer backlash citing decreased quality of care and allegations of withholding necessary medical procedures to cut costs.

Angood says the current push toward employed physicians is different. “It seems both the physician workforce as well as healthcare systems are committed to not having the same issues pop up as did in the early 1990’s,” he said, adding that many of this generation’s physicians are happy to take advantage of focusing on treating patients and to take advantage of the improved work-life balance that working for a hospital or other organization offers.

“It’s getting harder and harder to manage your own practice. Smaller groups don’t have the capital, and banks don’t want to lend money for these things,” T. Clifford Deveny, MD, Senior Vice President, Physician Services and Clinical Integration at Catholic Health Initiatives, said.

In addition to freeing themselves of duties related to finances, marketing, and other administrative physicians frequently find benefits packages in large organizations superior to anything they could obtain in private practice, with traditional benefits such as paid time off, competitive health insurance and retirement savings programs, and in some instances, “boutique” benefits such pet health insurance or concierge services.


“Traditionally, a physician is trained to be an independent thinker and do what they think is best, but integrated systems are there for the benefit of the patient, not the practitioner,” Deveny said. “I’ve always been cautious to say whether employing physicians will improve their jobs.”

Deveny also expressed concerns about physicians feeling like they were simply a cog in a machine, rather than a doctor actually treating patients. “When the IT guy or finance person doesn’t meet your needs, you get frustrated,” he commented.

A very real issue is ensuring that physicians feel a sense of purpose and that they are valued by the organization that employs them. While only 20 percent of those who responded to the ACPE’s study disagreed that the physicians employed by their organization were satisfied by the current employment model, some remain skeptical.

“This is still too new. The growth has been too dramatic in the last two to three years. People are still trying to figure out who is their partner and what they’re all about,” said Deveny, pointing out that after mergers and acquisitions, many physicians now work for strangers who did not hire them and are still trying to figure out their place within their systems.

More Than Money

While some might jump to the conclusion that paying physicians better is a way to keep them satisfied at work, the survey results were sharply divided. Only 32 percent of those who responded to the survey said their organizations used financial incentives to motivate physicians to be actively engaged in the financial success of the organization.

“It’s not just all money,” Angood said. “Physicians want to be engaged in the decision making process and have access to the data and info the health system has. They are very data-driven, want to create change based on data and participate in discussions around how to create the change.”

Deveny contends that money isn’t always the motivator that will keep physicians satisfied and engaged in their jobs. “You have to offer more than money. They want a meaningful role in the direction of the organization,” he said.

“It may sound corny, but an organization that gives them a sense of purpose, like a faith-based organization or a high-performing organization, makes them feel like they’re part a greater good. At the end of the day, humans want to be loved.”

Source: Lena J. Weiner, HealthLeaders Media, March 7, 2014