Why Physician Employment Makes Sense

Fewer and fewer physicians want to be like television’s Marcus Welby, practicing alone or with a partner, and fewer hospitals are seeking solo doctors for their communities. The reason is simple. To incorporate required technology, comply with regulations and participate in new delivery models such as accountable care organizations, physicians today are practically forced to be part of a larger practice or be employed by a hospital. Physicians are also seeking income and lifestyle predictability in a sometimes chaotic healthcare reform environment. Practicing on an island is increasingly difficult today, even for those physicians who prefer solo practice.

According to the American Medical Association, as of 2012, 60 percent of physicians worked in physician-owned practices. Twenty-three percent of physicians were in practices wholly or partially owned by a hospital, 5.6 percent were direct hospital employees and another 6.5 percent worked for nonprofit foundations (some of which may be hospital-affiliated). The changes can be attributed to new payment models necessitating closer collaboration between providers and hospitals.  Additional factors driving hospitals to employ physicians include to:

  • Bolster a service line.
  • Address urgent and emergent patient needs, fulfilling the mission of the healthcare system.
  • Help relieve physicians of complex administrative burdens.
  • Satisfy state regulations, such as a minimum number of specialists at trauma centers and neonatal ICUs.

In the winter 2014 edition of The Source physician newsletter, read how two HealthTrust members are addressing physician employment.

Author Information

Fred Keller

Fred Keller

Fred Keller is vice president of Strategic Sourcing for SourceTrust, the medical device service line offering of HealthTrust. He has over 20 years of experience in the healthcare industry in operations and contracting. In his current leadership position, Keller helps manage over $11 billion in member spend annually and leads member-dedicated custom contracting teams and the development of industry-leading solutions for medical device programs. Keller received his bachelor’s degree from the University of Colorado in Boulder. More Articles by This Author »

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