Employed or Self-employed: Did You Make the Right Choice?

Leigh Page


October 12, 2016

In This Article

Problems Working in Some Management-Driven Organizations

At these organizations, "the margin drives the mission," whereas at physician-led organizations, "the mission drives the margin," contends Rodney K. Ison, MD, CEO of Community Health Care, a small multispecialty practice based in Canton, Ohio.

Dr Ison has seen this problem first-hand. A large healthcare organization near him told some of its employed physicians that they would have move their practices to new locations to capture patients who would be "more valuable" to the organization, he says.

One family physician and three ob/gyns in the organization objected to this change because it would inconvenience their current patients, and they decided to leave the organization and join his group, Dr Ison says.

Bringing these physicians over to his group was not easy, Dr Ison says. Because they would initially be getting no patient revenue, Community Health Care had to front each of the new doctors $200,000, he says.

Employed Physicians Deal With Systemization

When Dr Ramirez was employed in the large organization in Texas, it became "more institutional," he says. "It was large to start with, and then it doubled in size." It grew from 100 doctors to 200 during the 5 years he was there. Dealing with so many physicians meant setting up rules that limited physicians' autonomy, he says.

Hospitals have always been more rule-bound than medical practices, in part because hospitals have to comply with a myriad of standards from accreditors, the federal, government and state authorities. However, the number of rules is increasing because hospitals are being "systemized," according to a 2015 survey[6] of employed physicians by Bain and Company, a management consultancy. Bain defines "systemization" basically as using metrics as "management tools" and incentivizing physicians through risk-based payments. For example, Bain reported that 53% of all healthcare organizations used analytics and clinical tools in 2015—up from 18% in a 2011 Bain survey.

In Bain's 2015 survey, 72% of physicians said their organizations use metrics more today than in 2012. Asked where they use metrics, 82% said for patient satisfaction, 76% for outcomes, 71% for productivity, 64% for revenue, and 56% for cost.

One source of the new rules is risk-based payments—such as bundled payments, shared savings, and capitation—that require a great deal of measurement. Bain said use of these payment modes rose from 26% of organizations in 2011 to 36% in 2015. By 2017, 83% of physicians expected to use at least one of these payment methods, the survey showed.

Also, organizations are now more likely to expect their employed physicians to use clinical guidelines and protocols. In 2015, 33% of physicians said their organization required or provided incentives for use of clinical protocols—up from 24% in 2011, Bain reported.

"Many organizations have established guidelines," Dr Drummond wrote. "They can even be built into the meat of the electronic medical record. However, few are strictly enforcing them at this time." But as new payment arrangements take hold, "you can certainly expect that to change," he added.

Despite the perception that systemization begets more control, many employed physicians actually seem to thrive in it, the Bain survey found. Whereas physicians in large organizations generally do not recommend their organization as a place to work, those in organizations with a high degree of systemization were much more likely to do so, Bain reported.


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