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AMA Update: Physician Practice Arrangements Trend Data

The AMA has released results of its 2014 Physician Practice Benchmark Survey, and here are some of the findings:

  •  In 2014 a third (32.8%) of physicians worked directly for a hospital or were in a physician practice at least partly owned by a hospital, an increase from 29% in 2012. While comparable AMA data is not available prior to 2012, it is estimated that in 2007-2008 about 16% of physicians worked for a hospital or hospital-owned practice.
  • The share of physicians directly employed by hospitals grew from 5.6% in 2012 to 7.2% two years later. A quarter of physicians worked for hospital-owned practices in 2014.
  • Single specialty group practice is the most common practice type, but multi-specialty group practices have increased.
  • The portion of solo physician practices has shrunk from 43.8% in 1983 to 18.6% in 2014.
  • Physicians under age 40 or female physicians were most likely to be employed by a practice, hospital, or other entity.

The report also provides data on the size of physician practices, based on the number of physicians in the practice.

Source: Kane CK. Updated data on physician practice arrangements: inching toward hospital ownership.  Policy Research Perspectives, American Medical Association, July 2015. http://www.ama-assn.org/resources/doc/health-policy/x-pub/prp-practice-arrangement-2015.pdf  [free site registration/login required to view/download]

Related sources:

Commins J. 6 in 10 physicians work in small practices. HealthLeaders Media, July 9, 2015. http://www.healthleadersmedia.com/page-1/PHY-318354/6-in-10-Physicians-Work-in-Small-Practices

2014 Survey of physician practice and contracting arrangements with hospitals. American Hospital Association, April 2015. http://www.ahaphysicianforum.org/resources/leadership-development/survey/index.shtml [AHA member-only report; employees of member hospitals/systems have member access]

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Key principles & characteristics of an effective hospital medicine group: assessment guide for hospitals & hospitalists

The Society for Hospital Medicine has developed a framework of 10 key principles involving 47 characteristics to guide an assessment of a hospitalist group. An effective group is based on these key principles:

  1. Effective leadership
  2. Engaged hospitalists
  3. Adequate resources
  4. Effective planning and management infrastructure
  5. Aligned with the hospital and/or system
  6. Supports care coordination across care settings
  7. Plays leadership role in addressing the hospital or system’s key clinical issues: teaching, quality, safety, efficiency, and the patient/family experience
  8. Takes a thoughtful and rational approach to its scope of clinical activities
  9. Has a practice model that is patient/family-centered, team-based, and emphasizes effective communication and care coordination
  10. Recruits and retains qualified clinicians

The 47 characteristics expand on the core principles, and the rationale for each characteristic is explained.

Sources:

Cawley P and other. The key principles and characteristics of an effective medicine group: an assessment guide for hospitals and hospitalists. Journal of Hospital Medicine, vol. 9, no. 2, Feb. 2014, p. 123-128. http://onlinelibrary.wiley.com/doi/10.1002/jhm.2119/abstract

The key principles and characteristics of an effective medicine group: an assessment guide for hospitals and hospitalists. Society for Hospital Medicine web site, accessed Feb. 4, 2014 at http://www.hospitalmedicine.org/Content/NavigationMenu/PracticeResources/KeyPrinciplesandCharacteristics/content.htm#

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

Rising Hospital Employment of Physicians

Hospitals are seeking patients and leverage, physicians are seeking security. Those are two driving forces for increased hospital employment of physicians, according to the Center for Studying Health System Change’s ongoing study of 12 metropolitan communities across the nation. Hospital-physician alignment should position providers to better address  coming changes in payment methods and accountability for quality of care. The report also briefly discusses hospital consolidation, access to care, costs, and policy implications as they relate to more physician employment.

The communities selected by the Center as a representative cross-section for monitoring changes in the nation’s health system include:

  • Boston, MA
  • Cleveland, OH
  • Greenville, SC
  • Indianapolis, IN
  • Lansing, MI
  • Little Rock, AR
  • Miami, FL
  • Northern New Jersey
  • Orange County, CA
  • Phoenix, AZ
  • Seattle, WA
  • Syracuse, NY

Source: O’Malley AS and others. Rising hospital employment of physicians: better quality, higher costs? Center for Studying Health System Change Issue Brief, no. 136, Aug. 2011.http://hschange.org/CONTENT/1230/1230.pdf

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org.

Co-management model: doctors manage service lines

A co-management model, implemented July 2009 at Genesys Regional Medical Center (Grand Blanc, MI), is described in this case study.  The hospital already had a successful PHO in place, the Genesys Physician-Hospital Organization, with 160 FTE primary care physicians, but was looking for an alignment model to integrate with specialists.  The new model involves investment by specialists in a co-management company that manages a service line.  Although there were challenges gaining acceptance of this new idea, the changes has led to improved patient satisfaction and has positioned the hospital and medical staff to pilot an accountable care organization.

Source: Aderholdt, B., and Lockridge, J.  Partnering with doctors through co-managementHealth Progress;92(4):26-29, July-Aug. 2011.  Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

Striving for Top Box: Hospitals Increasing Quality and Efficiency

This latest release in the Hospitals in Pursuit of Excellence Signature Leadership Series shares insights and best practices based on visits and interviews with three innovative health systems focused on improving both efficiency and quality of care.

  • Novant Health in North Carolina shares its experience in two areas: creating a remarkable patient experience and moving toward a payer neutral revenue system and away from cost-shifting.
  • The top box strategy of Piedmont Health in Georgia focused on physician alignment/clinical integration and on robust use of clinical data and information systems for performance measurement of cost management/efficiency and of infection control and preventable mortality.
  • The performance improvement strategy for Banner Health in Arizona centered on creating a culture of accountability, consistently communicating and measuring performance initiatives, sharing best practices across the system, and recognizing employees for performance improvement.

Recommended key elements for top box improvement include:

  • Start by addressing supplies and staffing for cost reduction.
  • Focus on incremental improvements that will snowball into big gains.
  • Address areas that will have substantial cost and quality impact.
  • Develop action plans stating crisp aims for improvement.
  • Share data transparently throughout the organization.
  • Manage with a payer neutral revenue strategy.
  • Reduce unnecessary clinical variation for quality improvement.
  • Invest in data infrastructure for frequent and detailed reporting.

Source: Health Research and Educational Trust/Hospitals in Pursuit of Excellence. Striving for top box: hospitals increasing quality and efficiency. Chicago: American Hospital Association, May 2011. http://www.hret.org/topbox/index.shtml

Hospital Employment of Physicians – Logic Behind a Money-Losing Proposition

According to a recent online New England Journal of Medicine article, hospitals typically lose $150,000 to $250,000 a year for the first three years a physician is employed. Thereafter, the annual losses decrease about 50 percent, but continue. Hospitals expect to profit on employed physicians after three years when the value of increased visits, tests, and referrals are accounted for. The authors assert that outpatient office practices of hospital-employed physicians rarely are profitable for hospitals.

Nevertheless,  a Medical Group Management Association report shows a 75 percent increase in the number of hospital employed physicians since 2000, with over half of practicing physicians now employed by a hospital or integrated health system. In its latest Cost Survey for Integrated Delivery System Practices, MGMA found average annual revenue for a hospital-owned multi-specialty group practice was $448,597 in 2009, significantly less than the $798,608 average for a group practice not owned by a hospital.

Despite the losses, physician employment  may better position hospitals as the nation’s health system moves toward accountable care organizations and more risk-based reimbursement. The potential employment risks and impacts on the competitive market place and particularly on physicians are highlighted.

Sources:

Kocher R and Sahni NR. Hospitals’ race to employ physicians–the logic behind a money-losing proposition. New England Journal of Medicine, Health Policy and Reform online, Mar. 30, 2011. http://healthpolicyandreform.nejm.org/?p=14045

MGMA survey: physician compensation and revenue affected by practice ownership. Medical Group Management Association press release, Oct. 25, 2010. http://www.mgma.com/press/default.aspx?id=39825

Cost survey for integrated delivery systems; 2010 report based on 2009 data. Englewood, CO: Medical Group Management Association, Oct. 2010. http://www.mgma.com/Store/ProductDetails.aspx?id=39006