Docs deterred from accelerating employment business

With goals in increasing market share and revenue, hospitals increasingly are employing physicians. However, employment models don't necessarily mean support from physicians or clinical integration, according to a new study released today by the Center for Studying Health System Change (HSC).

Following HSC's previous research that physician employment is on the rise, physicians reported feeling pressure to align with a hospital system. According to Accenture Health, by 2013, less than one-third of physicians will be in private practice, and instead will opt for employment under a larger health system.

However, under an employment model, physicians said they felt pressure to order more expensive tests or bring in more patients as part of a revenue- or volume-generating strategy.

"The acceleration in hospital employment of physicians risks raising costs and not improving quality of care unless payment reforms shift provider incentives away from volume toward higher quality and efficiency," study coauthor Dr. Ann S. O'Malley, HSC senior health researcher, said in a press release.

Some physicians were deterred from employment because they wouldn't see the fruits of their labor. For instance, former independent physicians complained that, although their practice hadn't changed except for the hospital employment status, the hospital saw increased Medicare payments.

The report showed that physicians were attracted to hospitals that offered advantages such as financial security and work-life balance. For instance, the hospital could negotiate higher compensations with health plans that a private practice could not on its own.

"In essence, physician employment is attractive to both hospitals and physicians under volume-driven fee for service, and the growing employment trend does not guarantee improved clinical integration will occur," the report authors wrote. "The recent acceleration in hospital employment of physicians runs the risk of raising costs and not improving quality of care unless broader payment reform reduces incentives to increase volume and creates incentives for providers to change care delivery to achieve real efficiencies and higher quality."

For more:
- read the press release
- check out the report

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