Marshall Baker of Physician Advisory Services discusses five changes affecting physician practice.
1. More physicians are forgoing clinical practice entirely. An increasing number of trained physicians have never had a clinical practice, Mr. Baker says. They often follow medical school with business school and pursue the administrative side of healthcare — an important role as executive search firms experience demand for physician executives. "Some have always been administrators with [medical] initials after their names, and now some who have been in clinical practice are making the transition to administration," he says. While hospitals and other healthcare facilities have traditionally been led by non-physicians — superintendents, nurse administrators and business executives — the industry is seeing more physician executives on the leadership team.
2. The new generation of physicians has different goals. The new generation of physicians is different from their predecessors, Mr. Baker says. "They have other interests [outside medicine], be it family, recreation or entertainment," he says. "They just have a different view of the importance of having their name on the side of the building." While the older generation placed a strong emphasis on entrepreneurship and the development of a successful private practice, the younger generation is less interested in ownership of a practice or the business side of medicine. This may be driving the increase in hospital employment, he says. "[Many younger physicians] are fine with others responsible for the business administration and operational management," he says.
3. Physicians are looking to untie compensation from a patient's economic status. The economy has been tough on physicians in private practice, who rely on payor reimbursements and patient payment. "Many hospital systems are designing their compensation methodologies around work relative value units as opposed to cash collections," he says. "In the private world, at the end of the day, the physician's take-home pay was what was left in the checkbook at the end of the month." As the economy takes a toll on patient finances, physicians can focus on care for the patient and not be influenced by a "wallet biopsy" – the patient’s ability to pay for the service provided.
4. Facility fees may drive patients back into physician-owned practices. Mr. Baker says he has seen hospital-owned groups lose market share because they must compete with multi-specialty groups that bill patients for a professional fee — rather than a professional fee and a facility fee (provider based billing). "The physician-owned practice can say, 'If you come here, it's less expensive,'" he says.
5. Specialists are increasingly sought-after for hospital employment. In the 1990s, Mr. Baker says many hospitals purchased primary care practices to build their primary care base. "In the last several years, the purchase, acquisition and alignment of medical and surgical specialists has intensified as hospitals and health systems build their multi-disciplinary employed physician platform," he says. Medical and surgical specialists can expect to be approached by hospitals over the next five years as "the march continues" toward hospitals building a dedicated employed/aligned multi-disciplinary medical group practice, represented by all major specialties and sub-specialties — allowing the health system/hospital to provide "one stop shopping" for patients (and payors), the long standing advantage of physician owned multispecialty groups, he says.
Read more predictions on the future of the healthcare industry:
-5 Changes on the Horizon for the ASC Industry
-6 Predictions on Device Market Growth in the Next Five Years
-5 Predictions on the Future of ASCs
1. More physicians are forgoing clinical practice entirely. An increasing number of trained physicians have never had a clinical practice, Mr. Baker says. They often follow medical school with business school and pursue the administrative side of healthcare — an important role as executive search firms experience demand for physician executives. "Some have always been administrators with [medical] initials after their names, and now some who have been in clinical practice are making the transition to administration," he says. While hospitals and other healthcare facilities have traditionally been led by non-physicians — superintendents, nurse administrators and business executives — the industry is seeing more physician executives on the leadership team.
2. The new generation of physicians has different goals. The new generation of physicians is different from their predecessors, Mr. Baker says. "They have other interests [outside medicine], be it family, recreation or entertainment," he says. "They just have a different view of the importance of having their name on the side of the building." While the older generation placed a strong emphasis on entrepreneurship and the development of a successful private practice, the younger generation is less interested in ownership of a practice or the business side of medicine. This may be driving the increase in hospital employment, he says. "[Many younger physicians] are fine with others responsible for the business administration and operational management," he says.
3. Physicians are looking to untie compensation from a patient's economic status. The economy has been tough on physicians in private practice, who rely on payor reimbursements and patient payment. "Many hospital systems are designing their compensation methodologies around work relative value units as opposed to cash collections," he says. "In the private world, at the end of the day, the physician's take-home pay was what was left in the checkbook at the end of the month." As the economy takes a toll on patient finances, physicians can focus on care for the patient and not be influenced by a "wallet biopsy" – the patient’s ability to pay for the service provided.
4. Facility fees may drive patients back into physician-owned practices. Mr. Baker says he has seen hospital-owned groups lose market share because they must compete with multi-specialty groups that bill patients for a professional fee — rather than a professional fee and a facility fee (provider based billing). "The physician-owned practice can say, 'If you come here, it's less expensive,'" he says.
5. Specialists are increasingly sought-after for hospital employment. In the 1990s, Mr. Baker says many hospitals purchased primary care practices to build their primary care base. "In the last several years, the purchase, acquisition and alignment of medical and surgical specialists has intensified as hospitals and health systems build their multi-disciplinary employed physician platform," he says. Medical and surgical specialists can expect to be approached by hospitals over the next five years as "the march continues" toward hospitals building a dedicated employed/aligned multi-disciplinary medical group practice, represented by all major specialties and sub-specialties — allowing the health system/hospital to provide "one stop shopping" for patients (and payors), the long standing advantage of physician owned multispecialty groups, he says.
Read more predictions on the future of the healthcare industry:
-5 Changes on the Horizon for the ASC Industry
-6 Predictions on Device Market Growth in the Next Five Years
-5 Predictions on the Future of ASCs