Physicians of America, Unite! You Don’t Have to Work for Hospitals

recent report by Merritt Hawkins, the physician recruiting firm, includes two key revelations about the impact of the COVID-19 crisis on physicians: Merritt Hawkins’ searches on behalf of prospective employers have dropped by 30% since March 31, and up to 35% of practices in some markets might soon close because of their unsustainable financial losses.

As of late May, visits to physicians—both in-person and virtual—had declined by 30% since the pandemic began, after dropping 60% during March and April and then rebounding. Many patients continue to avoid medical offices, and the expansion of telehealth has failed to recoup physician revenue losses. So Merritt Hawkins’ forecast is very believable.

The firm’s report predicts that hospitals and health systems will scoop up many of the doctors who flee failing private practices. Judging by the past, this is also credible. However, the American Hospital Association estimates that hospitals will lose $323 billion in 2020 because of the decreased volume of elective procedures and other services. So it’s unsurprising that physician recruitment is down by 30%, and it’s unclear when hospital demand will revive.

When hospitals do start hiring again, their job offers may be very different from former bids. Physicians may discover that hospital employment is no longer either secure or predictable. Travis Singleton, executive vice president of Merritt Hawkins, told Medscape Medical News that some hospitals are now moving to a “contingent labor/flex staffing model.” Under this type of arrangement, he said, physicians will no longer work full time in a single setting. They may do telehealth sessions at night and work 20 hours a week in the clinic, or have shifts in multiple hospitals or clinics. 

Because of the pandemic, most independent physician groups are not recruiting doctors right now. But at least they treat their employed doctors better than Uber treats its drivers—or than hospitals will manage doctors under their new flex staffing model. 

Moreover, as part of accountable care organizations (ACOs), private practices have a much better shot at making the transition to value-based reimbursement than do hospital-owned groups and their related ACOs. Studies show, for example, that physician-led ACOs generate more shared savings than do hospital-led ACOs participating in the Medicare Shared Savings Program (MSSP). ACOs that take financial risk—many of them physician-run–have also done better than those that share in savings without assuming any risk for losses.

So, physicians on the verge of closing their practices should think carefully about whether they want to work for a hospital, form new groups with colleagues in a similar situation, or merge with existing practices that have figured out how to survive in a COVID world. There are alternatives to hospital employment that can lead to better working conditions, higher pay and a more stable future. They don’t come with guarantees, but physicians who work hard and pull together can be successful and help build a better healthcare system.

Skeptics might point out that physicians don’t have the capital to build the infrastructure and the reserves needed to take significant financial risk. That is certainly true of most doctors in small practices, especially primary care groups. But groups of, say, 50 or more doctors have some capital and some ability to manage risk. Moreover, there is a growing crop of what I call “infrastructure vendors”—Aledade, Evolent, Caravan and the like—that will front the capital and even cover losses in return for a share of the profits without owning practices.

To paraphrase Karl Marx, Physicians of America, Unite! You have nothing to lose and everything to gain by leading the healthcare reform movement that will grow out of this pandemic.

(This post first ran on KevinMD.)

Ken Terry is a journalist and author who has covered health care for more than 25 years. His latest bookPhysician-Led Health Care Reform: A New Approach to Medicare for All, was recently published by the American Association for Physician Leadership.

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