Most hospital CFOs don't see ROI on physician employment

Most hospital chief financial officers do not believe that physician employment will result in a positive return on investment in the early years of such an agreement, the Healthcare Financial Management Association reported.

According to a survey of 139 hospital and systems CFOs, only 24 percent believe employing physicians will lead to a positive return on investment within the first two years of a physician hire.

Instead, CFOs believe hospital-employed physicians will mostly create benefits in the realms of improved care coordination, patient referrals and market share. And incentives will be based less on volume and productivity but more in improving quality and costs.

"Everyone is starting to realize that the focus in a value-based environment is keeping patients healthy, not the volume of care provided," said Janice Wiitalia, the HFMA's director of research, in a statement.

Moreover, some of the CFOs see employing physicians as a survival strategy, with pricey specialists such as cardiologists being targeted.

However, the practice of hospitals buying up physician practices has created concern among regulators. A recent Medicare Payment Advisory Commission report indicated that this was driving up costs for the Medicare, as hospitals charge more for services that are typically performed in a doctor's office, reported the New York Times.

To learn more:
- read the HFMA study
- here's the New York Times article
- here's the HFMA announcement

Suggested Articles

A select few legacy health organizations could thrive under a ‘Medicare for All’ system, according to a new analysis. 

The Congressional Budget Office estimates a Senate package tackling surprise billing and drug prices will save the government $7 billion.

Mahmee, a startup focused on maternal and infant health, just closed a $3 million funding round that includes Mark Cuban and Serena Williams.