Apprehensive, Many Doctors Shift to Jobs With Salaries

By Elisabeth Rosenthal
The New York Times, February 13, 2014

American physicians, worried about changes in the health care market, are streaming into salaried jobs with hospitals.

Last year, 64 percent of job offers filled through Merritt Hawkins, one of the nation’s leading physician placement firms, involved hospital employment, compared with only 11 percent in 2004.

Today, about 60 percent of family doctors and pediatricians, 50 percent of surgeons and 25 percent of surgical subspecialists — such as ophthalmologists and ear, nose and throat surgeons — are employees rather than independent, according to the American Medical Association.

Many of the new salaried arrangements have evolved from hospitals looking for new revenues.

Health economists are nearly unanimous that the United States should move away from fee-for-service payments to doctors, the traditional system where private physicians are paid for each procedure and test, because it drives up the nation’s $2.7 trillion health care bill by rewarding overuse. But experts caution that the change from private practice to salaried jobs may not yield better or cheaper care for patients.

“In many places, the trend will almost certainly lead to more expensive care in the short run,” said Robert Mechanic, an economist who studies health care at Brandeis University’s Heller School for Social Policy and Management.

Dr. Joel Jacowitz, a cardiologist in New Jersey, and his 20 or so partners decided to sell their private practice to a hospital.

Dr. Jacowitz said that the economics drove the choice and that the only other option would have been to bring in more revenue by practicing bad medicine — ordering more heart tests on patients who did not need them or charging exorbitant rates to people with private insurance.

“Some people are operators and give the rest of us a bad name,” he said, adding that he had changed his opinion about America’s fee-for-service health care system. “I’m fed up — I want a single-payer system.”…

Follow the money. Hospitals consolidate to increase market power, moving more patients into higher priced hospital outpatient services. Doctors have joined hospitals because “economics drove the choice.” Current national policies encourage physicians and hospitals to organize in order to provide “accountability,” but this oligopolistic power grab results in “accountability” that only their chief financial officers would admire, certainly not the people who pay the medical bills.

Under a well designed single payer system, excess spending would diminish by improving pricing and by reducing incentives to use worthless or harmful health care services. Many physicians have grown weary of having to attend to the business side of their practices when what they really want is simply to take care of their patients.

More and more physicians will be echoing the words of Dr. Jacowitz, “I’m fed up — I want a single-payer system.” When the patients start repeating those words, the politicians will have to follow.