NCPA - National Center for Policy Analysis

When the Doctor Has a Boss

November 10, 2010

The traditional model of doctors hanging up their own shingles is fading fast, as more go to work directly for hospitals that are building themselves into consolidated health care providers, says the Wall Street Journal.

  • The latest sign of the continued shift comes from a large Medical Group Management Association survey, which found that the share of responding practices that were hospital-owned last year hit 55 percent, up from 50 percent in 2008 and around 30 percent five years earlier.
  • The biggest U.S. physician-recruiting firm, Merritt Hawkins, said the share of its doctor searches that were for positions with hospitals hit 51 percent for the 12 months ended in March, up from 45 percent a year earlier and 19 percent five years ago.

The trend is tied to the needs of both doctors and hospitals, as well as to emerging changes in how insurers and government programs pay for care.

  • Many doctors have become frustrated with the duties involved in practice ownership, including wrangling with insurers, dunning patients for their out-of-pocket fees and acquiring new technology.
  • Some young physicians are choosing to avoid such issues altogether and seeking the sometimes more regular hours of salaried positions.
  • Hospitals are also seeking to position themselves for new methods of payment, including an emerging model known as accountable care organizations that is encouraged by the new federal health care law.

The consolidation wave is raising red flags among some regulators, researchers and health insurers, who warn that bigger health systems can use their leverage to push for higher rates.

Source: Anna Wilde Mathews, "When the Doctor Has a Boss," Wall Street Journal, November 8, 2010.

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