May 21, 2019 • Longeviti

New Primary Care Physicians Reject Private Practice to Become Hospital Employees

U.S. Primary Care is being transformed, and with it, the attitudes of future doctors toward the practice of medicine.

There are good reasons for this. The challenges faced by new primary care physicians are significant:

  • Primary care physicians receive only 2/3 to 1/2 the compensation of other specialists
  • Primary Care physicians graduate medical school with “terrifying” education loan debt ($300-500k, not uncommon!)
  • New doctors are very uncomfortable with taking on significant, additional debt in order to open an independent private practice (including medical office, staff, equipment, insurances) particularly when their new Practice will likely begin with zero patients.

Faced with all this cost and complexity, new physicians have turned away from private practice.

In its 2019 survey of final-year medical residents, Merrit Hawkins, a physician staffing firm, reported that “…residents (91%) would prefer to be an employee of a hospital, medical group or another facility than be in private practice.

This leaves us to ask if physicians who “punch a clock” from 9 to 5, have the same attitude towards the practice of primary care (and inevitably, the timely needs of their patients) as a physician who is committed to their independent Practice, something they created “by the sweat of their brow”?

According to Merrit Hawkins, the majority of new residents entering hospital employ want “a paycheck via a “salary” or a “salary with production bonus.”

As dedicated medical professionals, doctors want the very best for their patients, regardless of whether they are employed or are in private practice. Their enthusiastic embrace of  “hospital-based, job security,” however, may bring them some “hard to manage” conflicts with the potential to impact patient care negatively.

The Hospital as an employer

All businesses have managers who are responsible to the owners and shareholders to maximize profits and keep costs down. Moreover, in most well-run operations, the management goes to considerable effort to ensure that their interests remain uppermost in the minds of their employees, who are fully expected to serve them.

The problem for patients is that hospital management’s goals don’t necessarily align with those of their physician employees. Doctors have a far higher, pre-existing obligation to their patients’ care.

The Management

  • The hospital employs financial managers (accountants and administrators) whose responsibilities include supervising the net profit contribution demanded from each physician employee. They are seldom required or encouraged to have any contact with actual patients who, lip service aside, are considered by them to be “customers” from whom the hospital profits.

Physicians who work at hospitals are not “free agents.” They are employees

While physicians, do, “within reason” (as defined by the hospital and insurance companies) have the right to order “any” course of treatment for a particular patient, this is too often not a decision, freely made on behalf of the patient that reflects the physician’s best judgment, even if it appears so at the time.

Hospital physicians practice medicine, knowing:

  • The health insurance system in the U.S. pays out much higher reimbursements for complex, expensive, hospital-centered treatments (e.g., surgeries, hospitalizations) than for preventative and primary care. Hospital profitability rests on this.

  • There will come a time when the physician – employee’s performance as a generator of profits will be evaluated by their accountant/managers. Should these managers determine that the physician is “not making his numbers,” that physician’s “job” like that of any under-performing employee, will be at risk.

The effect on patient care

To maximize hospital profits, physicians may be directed or incentivized to:

  • See as many patients as possible (meeting or exceeding a (high) predetermined target) each working day, resulting in patient office visits of extremely short duration
  • Direct or recommend, whenever and wherever possible, those “high-margin” services to patients on which the hospital earns the most profit, as opposed to other less expensive services, therapies or treatments that might be equally as effective
  • Avoid expending time and resources on treatments considered to be the least profitable or that may incur additional cost to the hospital without regard to the efficacy of that treatment or the patient’s likelihood of benefiting from it
  • Do all of the above, while avoiding malpractice claims or other financial liabilities that might threaten the interests of the Hospital

You may have noticed that the interests of the patients have not figured prominently in this list of hospital imposed, physician imperatives.

Personalized care

In the past month, this blog has addressed the decline of the independent primary care physician and in reaction, the rise of personalized care.

Longeviti Health is personalized care that delivers its patients from the risks and unnecessary expenses associated with the systemic conflicts we’ve discussed in this blog. It has no masters who can demand that physicians see more and more patients for less and less time or offer “production bonus” incentives to do so.

Longeviti Health members enjoy a proactive partnership with their physician for the betterment of their health. There are no 3rd parties.

Longeviti Health physicians have all the time their patients desire to explore the many opportunities available to not only maximize their current well-being but to lay in a protective foundation for a long life that is not just longer but is longer in good health.

Another crucial aspect of this partnership is the role the Longeviti Health physician plays as  “Health Advocate,” when you are ill and need them most, but that is a subject for another blog.

We ought to be able to agree that the ultimate objective of our health care system should be that goal of a longer life spent in good health …as opposed to the more conventional model where the treatment of illness or disease takes place too often after it has become chronic or life-threatening.

Hospital-centered primary care with its many unavoidable conflicts is ill-suited to meet that objective.

For those who do see the benefits of genuinely proactive, personalized health care or have an obvious need for it, Longeviti Health is here.

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