Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Practice Management News

Hospital Employment, Medical Group Participation Increases in 2018

The percentage of medical professionals reporting hospital employment or medical group participation rose from 58 percent in 2017 to 64 percent in 2018.

Hospital employment and medical groups

Source: Thinkstock

By Jacqueline LaPointe

- Hospital employment is trending up, with 64 percent of medical professionals in a recent survey by the Medicus Firm reporting being employed by a hospital, medical group, or other healthcare facility in 2018.

The percentage of employed physicians in the fifteenth annual Physician Practice Preference & Relocation Survey increased from 58 percent in the previous year’s survey.

The survey of over 2,200 medical professionals also showed that self-employment or practice ownership or partnerships is not as common as it once was. Almost 28 percent of surveyed physicians belonged to a private practice in 2018 and about 8 percent were still in training as either a resident or in a fellowship.

“About 90 percent of our physician placements over the past two years have been hired by clients as employed physicians, as opposed to being set up in private practice. Yet only 20 percent of physicians vote for hospital employment as their top choice of practice setting,” stated Jim Stone, President of the Medicus Firm.

“The results seem to indicate that in an ideal world, many physicians would prefer to be an owner or partner in a private group practice, but today's healthcare environment is simply more conducive to physician employment, and the majority of available practice opportunities currently are employed positions.”

Declining claim reimbursement rates may be contributing to the recent uptick in hospital employment among physicians.

Reimbursement decreases was the top compensation concern for medical professionals in 2018. Approximately 36 percent of physicians identified rate drops as a major limitation on income, more than three times the next most cited limitation.

Graph shows that declining reimbursement was the top compensation concern for physicians in 2018.

Source: The Medicus Firm

Payer mix was also a top factor limiting medical professional compensation. Almost 10 percent of respondents cited this obstacle as their top income concern in 2018.

Claim reimbursement declines and payer mix both became more prominent challenges in 2018. Six percent more medical professionals said these factors limited their compensation in 2018 compared to the previous year.

Other factors limiting medical professional compensation in 2018 included:

  • Personal choice (e.g., to work less and make less), with 11 percent of participants
  • Patient volume and load, with 10 percent of participants
  • Administrative work, with 7 percent of participants
  • Overhead increases, with 7 percent of participants

Hospital employment can help alleviate some of the top concerns physicians had with their income in 2018. Hospitals, medical groups, and other healthcare facilities have greater market power to negotiate more favorable reimbursement rates with private payers. And the organizations tend to have more diverse payer mixes than private practices because of their larger patient population and market power.

Hospitals, medical groups, and other healthcare facilities also shift administrative and overhead responsibilities away from providers and to dedicated administrative and support staff.

But the rise in hospital employment may be prompting medical professionals to seek employment elsewhere, the survey indicated. The percentage of physicians planning a definite or possible career move in the next year increased two percent in 2018, reaching 19.8 percent.

Graph shows that more physicians are considering a career move in 2018 compared to the previous year.

Source: The Medicus Firm

Physicians who said they were definitely not planning a career move also fell by 2.5 points from 2017 to 2018, totaling 26 percent of respondents in 2018’s survey.

“It has become easier for physicians to move between jobs, with no practice to close or sell, nor a partnership to buy out of or into,” the Medicus Firm explained.

While hospital employment may be helping physicians manage a new healthcare environment, the shift is not helping providers earn value-based compensation or tackle physician burnout, the survey showed.

Medical professionals did not report much progress with the shift to value-based compensation. In 2018, only 43 percent of physicians could say with certainty that a portion of their compensation was value-based.

The percentage of physicians earning at least some value-based compensation is up just two percentage points compared to the previous year’s survey.

And even providers who did see some of their pay become value-based in 2018 did not have a significant portion of their compensation tied to quality. Almost one-half of those physicians said that their value-based income made up ten percent or less of their total compensation.

Graph shows that nearly one-half of physicians with value-based compensation had ten percent or less of their pay linked to quality in 2018.

Source: The Medicus Firm

Additionally, most providers (85 to 90 percent) reported experiencing one or more symptoms of physician burnout in the past year, the survey found. Common symptoms included physical or mental exhaustion, depersonalization or lack of caring, and decreased efficacy.

Hospital employment may be solving some physician challenges in the age of declining reimbursements and increased administrative burdens. But practicing at a hospital, medical group, or other healthcare facility has yet to solve all provider problems, the survey showed.

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