Hospital physician employment on the rise

Physician employment in hospitals has grown since 2007, as part of a greater strategy for hospital-physician alignment and increased service-line profits, according to a May report released by policy research firm the Center for Studying Health System's Change (HSC).

HSC in 2010 interviewed providers, health plan representatives, employers, policy makers and consumers in 12 cities, including Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey; Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y.

Hospitals are increasingly looking to stronger alignment strategies such as the employment option, shifting from a referral perspective to one of a team-based approach to care associated with health reform.

"Since 2007, in many communities, the trend of hospitals employing physicians has accelerated and broadened to include PCPs, as well as a wider range of specialists," states the HSC in an issue brief. "Hospitals see physician employment and tighter alignment not only as a way to capture more specialty and hospital referrals in a fee-for-service payment system, but also as central to building the clinical and financial integration needed to succeed under potential new payment models, such as accountable care organizations (ACOs), that involve risk-sharing and reward quality and efficiency."

Disillusioned with financial pressures and recruitment challenges to their practices, physicians today are more likely to initiate discussions about employment with hospitals, particularly in Cleveland, Indianapolis and Greenville. However, northern New Jersey and Miami showed less interest in physician employment, according to HSC.

For more:
- see the full HSC issue brief
- read the HSC press release