Hospitalists Will Fare Better in Private Practice Groups
Third in a 3-part series on hospitalists and the economic crisis
As pressure mounts on physician practices to cope with the economic crisis, all options are being put on the table. One option for practices to maximize the present value of their practice as well as their ongoing career is to sell their practice to a larger group such as IPC where the resources to whether the financial storm are already in place. But some practices, perhaps not understanding the range of better alternatives, have exhibited an interest in selling or even giving away their practice to a hospital. A recent survey from the American Hospital Association titled “Report on the Economic Crisis: Initial Impact on Hospitals” corroborates a small but discernable trend in this direction. Recent data from The Advisory Board Company also indicates that the number of physicians willing to consider hospital employment seems to be on the upswing. This trend is more pronounced in the surgical specialties but it is reasonable to assume that the trend involves hospitalists to some extent.
Acting on impulse to seek refuge from the economic crisis by turning to hospital employment will not be a panacea for what ails some hospitalist practices, for several reasons. First, a hospital’s decision to employ physicians may be viewed in itself as a short-term expediency. With but a few exceptions, hospitals have neither the funding nor the organizational structure needed to sustain and nurture the development of a hospitalist practice over the long term. Second, for a hospital to fund a practice group from the inside requires a level of subsidization even greater that what is required to contract with most groups in private practice. Hospitals may be willing to accept lower levels of productivity from employed physicians as the short-term price they pay for securing additional coverage and control, but here again, the economics of this arrangement do not work in the hospital’s favor over the long term. Third and perhaps most important, the successful practice of hospital medicine require a degree of autonomy that many hospitals in the role of employer find difficult to accommodate. This in turn leads to conflicts of interest and misalignment of goals that sooner or later always seem to surface.
My experience tells me that physicians perform best for their hospital and their patients when they are working for other physicians. In challenging times it is especially important to take the long view. Over many years the private practice group has stood the test of time, and it has proven itself to be the most enduring organization for practicing medicine through strong and weak economic conditions.
