There was an interesting article published on nytimes.com over the weekend (see “New Law’s Demands on Doctors Have Many Seeking a Network“) comparing and contrastng the practice of two primary care physicians, one employed by a hospital and another still in private practice but perhaps concerned about her ability to remain there. The hospital-employed physician touts the pros of hospital employment, including that while he is seeing more patients, he has more free time to work on his farm since he doesn’t have to worry about practice finances anymore. He was able to take a five week leave whereas in private practice, the most he was able to take was one week. The physician in private practice on the other hand is meeting with her state representative to try to come up with a solution to the primary care shortage in the face of the expansion of the state scope of practice of mid-level practitioners. The same article notes that the health system which employs the first doctor recently had its credit rating downgraded due to losses from an aggressive physician employment hiring.
Many lawyers in private practice will readily admit that the idea of being employed (we call it going “in-house”) can be appealing in the right circumstances. In-house lawyers don’t really have to worry about bringing in and keeping new clients, or about billing hours for that matter. But, most of us realize that there’s also some pretty huge trade-offs in going in-house. Perhaps the biggest is loss of security. Getting and keeping clients is tough work, but happy clients will stay with a good lawyer even in a bad economy or if the lawyer has to change firms. In house lawyers generally don’t have a loyal client base to catch them if the economy falters or company layoffs are necessary. Another big trade-off is loss of autonomy. Let’s face it, we all work pretty hard. Being in private practice allows you to work for yourself and your own bottom line instead of someone else’s. You also get to call your own shots — that is, you succeed or fail on your own terms. You reap the rewards and suffer the consequences of your own decisions. Of course, bad decisions hurt — but they really hurt when someone else makes them and you suffer the consequences.
Just like in law practice, I fear that in making the decision to abandon private practice for hospital employment, many physicians could be making some pretty big, and perhaps irriversable, trade-offs. For example, why would a hospital that is losing money on its physician network hire a primary care physician when it could hire a mid-level provider at a much lower cost? Lots of physicians I know could easily answer that question. They would say that mid-levels have less training and therefore can’t offer the same level of care as a physician. That could be true but what if the person making the hiring decision wasn’t a physician? What if it was a person whose job depended on keeping his employer’s bottom line in the black? And by the way, does the average patient really know the difference between the training a physician receives versus that of a physician assistant? I tend to think that patients will become accustomed to the level of care they receive. If mid-levels become the face of primary care, might not the future of primary care physicians be in jeopardy altogether?
Arguably the threat of mid-level practitioners squeezing out physicians is a “down-the-road” problem, but what about job security in the short term? Most hospital-physician employment agreements I review have terms of less than five years (most commonly three or fewer). What happens if (or when) cost-cutting time rolls around at the hospital and someone decides there are too many physicians on the payroll? Go back into private practice? But, will patients follow or will they just change providers so they can continue to go to the same office location out of convenience? And, what if the “formerly-employed” physician signed a restrictive covenant that requires him to relocate – more than likely that means building a practice from scratch.
Without a doubt, hospital employment can offer at least a short-term fix to the administrative and financial woes of physicians fatigued by private practice, but at what cost?