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All Things HIT

Jan 20 2011   12:13AM GMT

Independent, office based physician on the verge of extinction?

Posted by: AllinHIT

As a technology consultant for Quest Diagnostics, I met with almost every physician in the State of Florida.  Hence, I have a huge network of physicians that I converse with regularly.  I noticed recently that more and more of them are selling their practices to become an employee of the hospital.  Organizations like Orlando Health, Florida Hospital, and Baptist Hospital are making it widely known that they are interested in buying practices.   As a result I decided to look at this more analytically.  

I found an article dated Nov. 8, 2010, in the Wall Street Journal that stated more and more physicians are working for hospitals, versus, hanging their own shingle.  In the latter part of 2010, a MGMA survey found that hospital – owned physicians in 2009 had jumped to 55%, up from 50% in 2008, and approximately 30% in 2003. Meaning in 6 years the number of hospital vs. independents rose by 25%.  The article also references that the largest U.S. physician recruiting firm, Merritt Hawkins, recruited more physicians for hospitals, then recruit physicians for physicians groups.  So, why is this happening?  What makes physicians reluctant to “hang their shingle”? 

The answer is probably a “no brainer” to most of us, but lets recap some of the reasons.  Shrinking reimbursements lead to seeing more patients for revenue, the arduous task of renewing payer contracts, high insurance costs, litigations and lack of tort reform, high receivables from patient copay – and of course, being “forced” to adopt EHR technologies!  Wow, no wonder this trend is upward!  It just may be that some physicians just want to focus on practicing medicine and not operations, and all of the aforementioned!

Regardless of the reason, the trend is moving in the hospital direction for physicians.  As John Strange, CEO of St. Lukes Hospital in Duluth, Minn., said: “You need patients to support your facilities, and doctors bring patients.” 

Let’s hope that this is not the end of the independent physician.  If all physicians worked for hospitals, this will undoubtedly increase cost to the payers, and most importantly, to patients!

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