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Physician Practice Acquisition and Employment Trends

A new report by the Physicians Advocacy Institute (PAI) in collaboration with Avalere Health analyzes recent trends in physician employment and the acquisition of physician practices by hospitals and health systems. Physicians may become employees through a group practice acquisition, or individual physicians may enter into employment arrangements directly with hospitals/systems. Here are some highlights from the analysis:

  • Between July 2012 and July 2015, the percentage of hospital-employed physicians increased nearly 50%
  • By 2015, 38% of physicians were employed by hospitals
  • Hospital or system ownership of physician practices grew by 86% from 2012 to 2015
  • By July 2015, there were 67,000 hospital-owned physician practices
  • One in four physician practices was hospital-owned by 2015

Regionally, nearly half of all physicians in the Midwest were employed by hospitals in 2015. Physician employment rates were lowest in the South and in Alaska and Hawaii where a third of physicians were hospital-employed. The pros and cons of these employment trends are briefly listed.

PAI and Avalere are planning additional analysis of this trend and its implications for early 2017.


Source: Avalere Health. Physician practice acquisition study: national and regional employment changes. Physicians Advocacy Institute, Sept. 2016. http://www.physiciansadvocacyinstitute.org/Portals/0/PAI-Physician-Employment-Study.pdf

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

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

2014 Survey of America’s Physicians: Practice Patterns and Perspectives

The Physicians Foundation is out with its latest biennial survey of physicians in the country, looking at work satisfaction, practice patterns, and other attitudes of over 20,000 survey participants. Key questions addressed in the survey include these:

  • Are they seeing more or fewer patients?
  • Do they continue to accept Medicare and Medicaid as a form of payment?
  • How do they grade the Affordable Care Act?
  • How many are part of an ACO?
  • What effect have electronic medical records had on their practice?
  • Are they independent practice owners or employees?
  • Do they plan to retire, work part-time, practice concierge medicine, seek hospital employment, or pursue some other option?

And here are some of the answers from physicians:

  • 38% do not see Medicaid patients or limit the number of Medicaid patients seen.
  • 46%  give the Affordable Care Act a failing grade.
  • 26% participate in an ACO, but only 13% think ACOs will improve quality or lower costs.
  • 85% have adopted electronic medical record,s but 46% say they detract from their efficiency.
  • 53% describe themselves as employees, up from 44% in 2012.
  • 44% plan to take steps that could impact the physician supply and patient access, such as retiring, closing their practices to new patients, cutting back on the number of patients seen, or seeking a non-clinical job.

Source: Merritt Hawkins. 2014 survey of America’s physicians: practice patterns & perspectives. Physicians Foundation, Sept. 2014. http://www.physiciansfoundation.org/uploads/default/2014_Physicians_Foundation_Biennial_Physician_Survey_Report.pdf

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

2014 Physician Compensation, Benefits & Recruitment Incentives Report

The Association of Staff Physician Recruiters, represening in-house recruiters in hospitals, physician practices, health plans, or similar organizations, and the MDLinx.com web site collaborated on a physician survey earlier this year focused on learning more about compensation models and recruitment incentives offered by their employers.

The survey yielded benchmarking data related to each of these areas:

  • Incentives, including relocation assistance, signing bonuses, malpractice coverage assistance, requirment to stay in the position for a defined time period, and for residents/fellows, stipend incentives for their final year of training
  • Compensation methodology, covering compensation model and the percent tied to quality measures, supervision of advanced practice providers, payment for on-call coverage, bonus eligibility, bonus structure, and satisfaction with the compensation model
  • Benefits, such as coverage of professional fees, annual provision of CME activities, paid time off for CME, vacation, sick time, and holidays, and if domestic partner benefits are offered
  • Contract, encompassing restrictive or non-compete agreement details
  • Schedule, touching on schedule flexibility, what defines ‘full-time’, and time providedfor administrative activities

Source: 2014 physician compensation, benefits & recruitment incentives report. Association of Staff Physician Recruiters, 2014. https://c.ymcdn.com/sites/aspr.site-ym.com/resource/resmgr/Files/2014_ASPR_PhysComp_Report.pdf

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


ACOs and Other Options: a “How to” Manual for Physicians

The American Medical Association has published a free downloadable manual that provides physicians information about participation in accountable care organizations or other systems involving care coordination, more communication and quality measurement reporting.

The guide covers these topics from the physician perspective:

  • Overview of complex environmental challenges for physicians
  • Overview of ACOs
  • ACO governance issues
  • Partnering with hospitals to create ACOs
  • Partnering with insurers to create an ACO
  • Guidance for earning electronic health records incentive payments
  • Managing antitrust risk associated with ACOs
  • Hospital physician employment agreements
  • Retaining independence while embracing accountability, especially for small physician practices

Source: ACOs and other options: a “how to” manual for physicians navigating a post-health reform world. 4th ed. American Medical Association, 2012-13.  http://www.ama-assn.org/resources/doc/psa/physician-how-to-manual.pdf or http://www.ama-assn.org/ama/pub/advocacy/state-advocacy-arc/state-advocacy-campaigns/private-payer-reform/state-based-payment-reform/accountable-care-organizations.page  http://www.ama-assn.org/resources/doc/psa/physician-how-to-manual.pdf

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

New AMA Data on Physician Practices and Physician Employment

The American Medical Association has just released the results of its 2012 Physician Practice Benchmark Survey. The report indicates 23% of physicians worked in practices that were at least partly hospital-owned while another 6% were directly employed by hospitals. Sixty percent of physicians were either self-employed [53%] or employed by a physician-owned practice.

While this report documents a trend toward greater hospital employment of physicians, the employment rates are lower than those in other recent reports. The report discusses these reports and explains why they differ. The AMA indicates its survey is the first broad and nationally representative look from the physician perspective.

The report also provides new data on medical practices by size, practice type, ownership, and medical specialty.

Source: Kane CK and Emmons DW. Policy research perspectives – New data on physician practice arrangements: private practice remains strong despite shifts toward hospital employment. American Medical Association, 2013. http://www.ama-assn.org/resources/doc/health-policy/prp-physician-practice-arrangements.pdf [Free registration now required to view]

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

2013 Physician Outlook & Practice Trends

The latest annual survey results on physician attitudes and practice trends is out from Jackson Healthcare, a health care staffing firm. The report looks at physician attitudes related to job satisfaction, employment vs. private practice, workload and environment, use of advance practitioners, Medicare/Medicaid access, ACO participation, and physician attrition. Among the findings are these:

  • The proportion of hospital employed physicians grew from 20% in 2012 to 26% in 2013, while other non-ownership physician employees also rose from 12% to 15% over the previous year.
  • 25% of physicians reported participation in an accountable care organization in 2013, an increase from 22% in 2012. Another 14% plan to participate in an ACO.
  • The top reasons given by physicians leaving private practice were overhead costs too high, focus on practice of medicine without administrative hassles, and reimbursement cuts.
  • While there was significant job dissatisfaction among physicians, the more satisfied were likely to be employees of a hospital or physician-owned practice, supported by nurse practitioners or physician assistants, practicing concierge medicine, and/or working 11 or fewer hours per day.

Source: 2013 Physician outlook & practice trends: filling the void. Jackson Healthcare, 2013. http://www.jacksonhealthcare.com/media/191888/2013physiciantrends-void_ebk0513.pdf

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

Trend Watch: Physician Practice Acquisitions, 2012-2013

Are hospitals actively acquiring physician practices, and if so, which specialties? That’s the question the first in a planned annual survey by Jackson Healthcare sets out to answer. Here are the key findings:

  • Over half of reporting hospitals had acquired or were planning to acquire physician practices.
  • Family practice and other primary care, including internal medicine and obstetrics/gynecology specialties, were of  top interest.
  • Cardiology and general surgery specialties also ranked relatively high in acquisition interest.
  • The top reason for a hospital acquiring a medical practice was physicians approaching the hospital, seeking to sell their practices. Hospitals bought them primarily to build/maintain a competitive advantage or as part of a physician recruitment strategy.

Source: Trend watch: physician practice acquisitions; tracking which physician practices hospitals are acquiring. Jackson Healthcare, 2013. http://www.jacksonhealthcare.com/media-room/surveys/trend-watch-physician-practice-acquisitions-2012-2013.aspx

Related resources:

Halley MD. Owning medical practices: best practices for sustainable results. AHA Press, 2011. More details for purchasing book: http://ams.aha.org/EWEB/DynamicPage.aspx?WebCode=ProdDetailAdd&ivd_prc_prd_key=48a43cee-9de8-49e8-b0fc-b3445003ff3b

Lister E and Sagin T. Creating the hospital group practice: the advantages of employing or affiliating with physicians. Health Administration Press, 2009. More details for purchasing book: http://www.ache.org/pubs/redesign/productcatalog.cfm?PC=WWW1-2135

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

AMA Principles for Physician Employment

The AMA has released general employment guidelines for physicians and their employers as they work together to provide high-quality and cost effective care for patients. The principles address conflicts of interest, patient advocacy, contracting, hospital medical staff relations, peer review and performance evaluations, and payment agreements.

Source: AMA principles for physician employment. American Medical Association, 2013. http://www.ama-assn.org/resources/doc/hod/ama-principles-for-physician-employment.pdf

Related resource: Welch SS and others. AMA annotated model physician-hospital employment agreement. American Medical Association, 2011. [Free to AMA members at http://www.ama-assn.org/ama/pub/about-ama/our-people/member-groups-sections/organized-medical-staff-section/physician-employment.page?; available for sale to others at http://amascb.pdn.ipublishcentral.com/product/annotated-model-physicianhospital-employment-agreement

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

Guide to Physician Integration Models for Sustainable Success

This new report is a guide to laying the groundwork for successful physician-hospital integration, the integration options to consider, and how to evaluate those options. Twelve strategies are offered hospital leaders for successful alignment:

  1. Understand the forces affecting physicians and design options for meeting the needs of local physicians.
  2. Understand the hospital or system’s capabilities and infrastructure in the community context.
  3. Ground integration efforts on a financial plan with sufficient resources and performance targets.
  4. Ensure strong physician participation, leadership and governance.
  5. Use technology to connect with physicians.
  6. Do an objective assessment of organization readiness for value-based care transformation efforts.
  7. Use a disciplined and integrated approach to practice acquisition and physician employment.
  8. Document and communicate the degree to financial commitment required to employ physicians.
  9. Model alternative compensation arrangements before employing physicians.
  10. Structure effective and sustainable compensation programs for physicians employed.
  11. Manage employed physicians to achieve goals.
  12. Use a structured process to ensure a sustainable and consistent venture over time.

Interwoven into the discussion of strategies are examples from hospitals and health systems.

Source: Cullen SC and others. A guide to physician integration models for sustainable success. Health Research & Educational Trust/American Hospital Association and Kaufman, Hall & Associates, Sept. 2012. http://www.hpoe.org/Reports-HPOE/guide_to_physician_integration_models_for_sustainable_success.pdf

Related resources:

Halley MD. Owning medical practices: best practices for sustainable results. Health Forum/American Hospital Association, 2011. Purchase details at http://ams.aha.org/EWEB/DynamicPage.aspx?WebCode=ProdDetailAdd&ivd_prc_prd_key=48a43cee-9de8-49e8-b0fc-b3445003ff3b

Johnson BA. Physician compensation plans: state-of-the-art strategies. Medical Group Management Association, 2006. Purchase details at http://www.mgma.com/store/Books/Physician-Compensation-Plans/

Welch SS. Annotated model physician-hospital employment agreement. American Medical Association, 2011. Purchase details at http://amascb.pdn.ipublishcentral.com/product/annotated-model-physicianhospital-employment-agreement [Free access for AMA members]

American Medical Association – Physician employment web site: http://www.ama-assn.org/ama/pub/about-ama/our-people/member-groups-sections/organized-medical-staff-section/physician-employment.page?

American Hospital Association – Physician Leadership Forum web site: http://www.ahaphysicianforum.org/

Posted by AHA Resource Center, (312) 422.2050, rc@aha.org