Practice Notes

Expert Q&A: How to make physician employment 'absolutely a win' for health systems

A recent Modern Healthcare article says health systems acquiring physician practices may not see a short-term payoff, but likely will in the years to come as health reform efforts continue nationwide. So why exactly are some health systems losing dollars by employing doctors?

To get the answer, the Daily Briefing talked to Anthony D’Eredita, Executive Vice President at Southwind and one of our foremost experts on physician employment and integration, and learned that it is possible for health systems to profit from employing physicians—as long as health systems can effectively manage, communicate, and articulate the organization's overall vision.

Read on to learn more about how health systems can get the most out of their medical groups.

Q: An article in the new Modern Healthcare explores the push for hospitals to employ physicians, but raises questions about the sustainability of the model. Can you talk about why some systems are experiencing pain here?

D'Eredita: I'll answer that, but let's first take a step back. As health systems look to transition from a volume-based to a value-based environment, they are addressing two major concerns.

The first is a drop in volume. [And] for some that drop is projected, but for others, it’s current. The second is the need to aggregate lives to manage the new economics of risk.

Many health systems are responding to these challenges by increasing the number of employed physicians and scaling their medical practices. And Modern Healthcare's right: the benefit of managing larger populations may be [lost] if the physician practice is not financially aligned and clinically integrated with other health system components.

Moreover, if the practice is not operating efficiently, the cost of employing large numbers of physicians can actually cut into health system margins, which are being pressured in several different ways.


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