Evolution of Hospital and Physician Relationships Accelerating with the Affordable Care Act of 2010

The U.S. Department of Labor reports that in 2008 only 12% of doctors were self-employed. With the implementation of the Affordable Care Act (ACA) and other healthcare reforms, the future of employment by physicians in hospitals will be overtaking the past trends. Hospital employment of doctors is expected to increase between 10 and 25% over the next five years. 

At the same time that employment of doctors is increasing in hospitals, the numbers of physicians practicing on their own is declining. This data comes from the Physician Compensation and Production Survey from the Medical Group Management Association (2003-2009) report. According to that report, physician-owned practices declined from 70% in 2002 to just under 50% by the year 2008.  In contrast, by 2008, hospital ownership of physician practices exceeded the percentage of physician practice sowned by physicians.  Hospital ownership of physician practices in 2002 was only slightly more than 20%.

Back in the 1990s, hospitals and health systems were employing primary care physicians more so than medical specialists because it was thought that the healthcare model of the future would ensure that primary care physicians would be gatekeepers to health care. Because of reform and the ACA, that trend has changed.  The rate of increase in employment of primary care physicians by hospitals and specialists is about equal now.  That is because the ACA does not promote a primary care gatekeeper model. The lowest cost resource at the earliest point of medical care means that specialists will be directed to the patient instead of through the primary care physician.

Doctors are more inclined to seek out hospitals as employment today more than ever.The reasons seem to be patient revenues have slowed, and the costs of medical practices have increased. Another reason seems to be that physicians face the obstacle of adopting electronic medical records and adopting programs that may be too expensive for a physician practice without the greater support of a capital-rich institution like a hospital.

There is also the fact that Medicare payments have not grown with the physician practice expenses at the same level. Medicare has limited the ability of doctors to make up for lost revenue. In addition, doctors are looking at hospitals as a more stable employment base that gives doctors a predictable income with a given time-off program. New doctors are facing enormous student debt. Often graduating physicians carry debt up to $150,000 into their first year of practice. 

At the same time, hospitals have accelerated the employment of doctors because of the anticipated changes under healthcare reform.There are many changes in the works that doctors and hospitals have made operational. Hospitals have created cost effective urgent care centers that are convenient and often open 24 hours. They are less costly than fully staffed, fully equipped emergency rooms. Also, integrating electronic medical records and health records are making hospitals and physicians accountable for their care to patients. 

There is a movement to make the physician role increasingly to be one of treating patients as outpatients and handing off patients to other medical providers.  The electronic health records are essential for that purpose.  The electronic health records also reminds patients of preventative care and follow-up care.  This will allow patients to recover their test results and reduce the need to retest.

The current system is such that hospitals and health systems are paid for improving the health of those who are sick or injured.  There is an incentive to improve the health of those who are not yet sick, which in turn would reduce healthcare costs going forward. According to the federal Centers for Disease Control and Prevention, “more than 75% of healthcare costs are due to chronic conditions . . . four common health-damaging, but modifiable behaviors- tobacco use, insufficient physical activity, poor eating habits and excessive alcohol abuse – are responsible for much of the illness, disability and premature death related to chronic diseases.”

Hospitals and doctors are working together to improve the management of disease in the United States. Hospitals will likely increasingly hire physicians as employees as changes in medical delivery are met. 

Kreisman Law Offices has been handling medical negligence claims and trial work for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of a medical provider for more than 37 years in and around Chicago, Cook County and its surrounding areas, including Markham, Chicago (Chinatown), Chicago (Lakeview), Chicago (Ravenswood), Arlington Heights, Barrington, Berwyn, Burbank, Elgin, Forest Park, Hinsdale, Homewood, Lockport, Midlothian and Oak Brook, Ill.

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