After reading through the AMA's newest manual aimed at helping physicians navigate the post-reform era, it's a wonder why anyone in his or her right mind would choose doctoring as a career.
The report, "Hospital Physician Employment Agreements," is loaded with phrases like:
- "From 1995 to 2003, a physician's net income adjusted for inflation declined 7 percent. From 1995 to 2008, physician reimbursement declined an even greater 25 percent."
- "The costs of operating a medical group have continually increased. Everything from rent to labor to malpractice costs have continued to go up. Thus, physicians are caught between decreasing reimbursement and increasing costs."
- "The new growth of hospital-owned practices has created competition for traditional physician practices. Larger delivery systems have substantial access to capital and resources, which allows those systems to build new facilities with new equipment in close proximity to existing physician practices. Essentially, these hospital-owned groups are competing aggressively for the dwindling numbers of commercial patients."
- "In addition to the oppressive financial pressures faced by physicians, there are lifestyle pressures as well. The growing regulatory demands of governmental and insurance programs require that physicians spend ever-increasing amounts of time dealing with administrative issues."
- "Unfortunately, physician practices have not been structured to develop capital resources or to serve as vehicles for raising capital. Hospitals and insurance companies typically are the only types of players in the health care market that have access to the capital that is needed to develop these integrated delivery systems. Consequently, as physicians are pressured to move into larger systems, it can be very difficult for them to self-finance this growth."
And this: "When one steps back and surveys the environment in which physicians are operating, it is fair to state that physicians are facing one of the most complex situations ever seen by any professional group." Ya think?
Now, the AMA guide isn't all doom and gloom. Really, it's aimed at helping physicians understand their options in this incredibly complex environment — stand pat, hospital employment, form a "large clinically integrated practice," change to a concierge model, partner with hospitals and/or insurers, and so on.
It's a pretty good read, actually. Hospital executives may want to give it the once over. It's always helpful to know if you and your potential dance partner are moving to the same rhythm, right?
For instance, in the section on partnering with hospitals to form ACOs, the guide states: "Physicians should frame or help frame the agenda for all clinical integration discussions. … Because of the differential in resources, physicians are well served to negotiate up-front access to their own strong professional advisors who can enable the physicians to organize their resources in a way to maximize both the physician contribution and the value received for that contribution." And, "In negotiating ACO arrangements with hospitals, physicians must not abdicate their responsibility to drive a patient-centered agenda."
The guide also implores physicians to carefully study their potential partners. For instance, does the hospital have a history of successfully partnering with physicians? Is there an open line of communication? Are their EMRs compatible? What's the debt to equity ratio? How strong is the balance sheet? Is the executive team trustworthy?
As Catherine, vice president of the AMA's Private Sector Advocacy and Advocacy Resource Center, writes in the guide's preface, "There was a similar flurry of hospital purchases of physician practices and physician consolidations in the early 1990s. … But physicians do not have to repeat the mistakes of the past — they can learn from them. Physicians can analyze their present situation to determine whether it even makes sense for them to make a change."