The Pro’s and Con’s of Physician Group Hospital Employment

Health Information Services Medical Coding

ID-10033375_(1) According to a recent report, the trend for hospital physician employment may not be as beneficial to hospitals and physicians as some previously thought. Although there may be some advantages for physician groups to be owned by a hospital, by and larger there are numerous of reasons such an arrangement may not be the best one.

If you are contemplating giving a hospital ownership of your practice, there are some important factors to seriously consider. Physicians Practice recently published some pros and cons of hospital physician employment.

Pros for the physician group

  • Financial stability: A big perk is financial stability. You will be paid a salary that is not dependent on whether or not patients actually pay their bills. You are relieved of the headache of making payroll. That task now belongs to the hospital.
  • More free time: There is generally more staff available to provide coverage for those days you want to be totally free from patient responsibilities.
  • Reduction in cost for support services: Things like medical supplies, clerical help and IT services generally cost less.
  • No administrative headaches: The hospital takes charge of billing and collections, paying overhead, hiring and firing employees and day to day operation concerns.

Cons for the physician group

  • Loss of autonomy: You are an employee. You may be required to see patients you would not normally see. If there is new technology you would like to acquire, it may not be the technology the hospital ultimately decides to purchase.
  • Your boss is the board of directors: Some board members are likely not even physicians. They control how you run your practice and how you deliver health care. The patients are their patients, not yours.
  • Although you will be relieved of the headache of HR duties, which initially falls into the pro column, your assistants and clerical staff will be employees of the hospital, not your employees. You may disagree with a hiring or firing decision, but ultimately, those decisions are made by the hospital HR department.
  • Level of compensation: This is subject to periodic contract negotiations and may come with unreasonable expectations. In addition, there will likely be limited opportunities to generate additional income.

Pros and cons for the patient

There is no real benefit to patients to have their physicians employed by a hospital. It may even make them feel part of a large bureaucracy and interfere with the traditional patient/doctor relationship. They will not have a choice of hospitals if they need emergency care or surgical procedures. Finally, the cost of care may be increased.

Patient care expenses are higher for hospital owned physician groups

A recent study compared patient treatment costs of more than 4.5 million patients. Some were treated by hospital-owned physician groups while others were treated by physician-owned practices. The results showed that the expenditures per patient by physician groups owned by hospitals is 10.3 percent higher than the costs of patient care by physician owned practices. There is concern by policy makers that the increased costs will ultimately be passed on to the patients.

Consider partnership with HIS

A partnership with a physician management company like Health Information Services (HIS) may provide the best solution to staying independent. At HIS, our experts know how to help you manage your practice while lowering costs and increasing the financial stability of your practice. We help you implement new processes and plan for your future. We relieve you of the headache of coding, billing and collections, and our purchasing program provides cost savings similar to that of hospitals.

Partner with us to help your practice maintain a strong financial backbone in order to stay independent and avoid hospital physician employment.