Spring 2016 issue of Horizons

HEALTHCARE

Trends in Physician Employment by Tom Zetlmeisl, CPA, CFE, CFF, CGMA

I t’s no secret that there is a growing trend for physicians to be employed rather than operate in private practice. Hospitals are frequently the employers, although many physicians are being employed by outsourced physician companies which then contract with hospitals. It’s a dynamic environment and shifting forces in healthcare are accelerating this trend. Contributing Factors One major factor is that market dynamics, including declining reimbursement rates, are making it much harder for physicians in private practice to manage their overhead costs. Hospitals or large outsourced physician groups are advantaged with efficiencies and economies of scale in managing overhead costs. Related to this, employed physicians no longer have to worry about

the administrative burdens of managing a private practice.

This characteristic of the employed model is appealing to most doctors. Many are not interested in the extra duties associated with running a business, which is what being in private practice entails. In this new model, they can simply go to work, take care of patients and then go home and be with their family and friends. Employment models remove many of the burdens of private practice. pressed to meet certain quality measures. For instance, readmission rates following certain episodes of care will likely be one measure for judging provider quality. Provider Reimbursements Provider reimbursements are impacted by Hospitals benefit from this model in several ways as well. Primarily, they are being

page 48 | horizons Spring 2016