Can physicians maintain independence while working as part of a large system?

Over the past 5 years, there has been a major shift in physician practice models, with fewer doctors working in the small, physician-run practices that were considered standard in years past.

More and more physicians are becoming part of large hospital systems than ever before. Often, being part of a large hospital system means working as an employed physician, which has some fundamental advantages and some inherent disadvantages. Doctors who are employed by large hospital systems do not have the same degree of independence as self-employed physicians, which can be a tough concept for physicians who do not want to have to answer to a ‘boss.’ However, while affiliation with a hospital system is becoming the trend for many doctors, full-time employment or disheartening lack of profession independence is not the only option.

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In fact, the reality of physician employment arrangement can involve a grey area that combines working for or within a large hospital system with varying degrees of independence. And there are almost limitless options in terms of what constitutes independence. 

Setting Clear Boundaries 

Eric Tait, MD, MBA, is a primary care doctor in Houston, Texas, who went into his employment negotiation with IASIS Healthcare in Houston with the objective of working as an employed physician while also maintaining his previously built outside business contracts as well. He says that the key to his own negotiation process was rooted in his understanding that “primary care physicians are valuable to a healthcare system” and that his worth to his employer as a primary care physician gave him valuable leverage.

Prior to joining IASIS, he had already built an investment partnership in an independent practice association, which is a partnership between physicians and insurers. When he agreed to a contract that allowed IASIS, his employer, to collect revenue from his clinical work and pay him a salary, he made it clear upfront that he would not share any of his IPA partnership rights with his employer.

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While this arrangement certainly sounds fair to most physicians, the reality is that many doctors have been dragged into (and lost) legal battles with employers who have claimed legal rights on physician revenue from outside business ventures, ranging from expert medical witness testimony to ownership in diagnostic facilities. Tait advises physicians to “insist upfront on establishing walls between outside work and the reach of employers.” This advice is quite different from the trap that many physicians fall into- which is ignoring or even hiding business arrangements, and then running into problems with employers after outside work is discovered. Tait also urges physicians to recognize that even as employed providers, they still have rights to own businesses in healthcare.  

Next: How to choose the right fit

The Best Of Both Worlds 

Maria Armstrong, MD, a physical medicine and rehabilitation physician who practices in Medina, Ohio, has worked as a medical director for a rehabilitation hospital while maintaining control of several aspects of her practice. As a medical director, she works as a contractor, preserving power over a number of facets of her professional setting, yet, working in the inpatient setting, she also enjoys a number of the benefits that come with being part of a hospital system.

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For example, as part of a hospital system, she explains, “I work with excellent nurses and staff, but did not have to hire or train the team.” She also uses the hospital medical record system, and did not have to set up her own, which many private physicians do. She says that the freedom to practice medicine in the way that is best for her patients, without the pressure of making healthcare decisions based on an employer’s profitability, is what she considers the most valuable aspect of her independence.

As a contractor, Armstrong believes that she has more control over her hours than she would have had as a fully employed physician. One important aspect of achieving work life balance while working independently lies in building strong work relationships with other doctors, and Armstrong has not ignored that vital component of professional life. Armstrong explains that the key to achieving her work arrangement depended largely on her ability to network and partner with other independent doctors to work out a coverage schedule that is fair and at the same time tailored to each doctor's needs. This would not be an easy task if Armstrong and her colleagues were all employed by a boss who was allocating responsibilities and compensation.

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However, Armstrong believes that “the independent model of practice may not last for long” and she sees that doctors are becoming part of larger organizations. She says that maintaining independence comes with a different type of responsibly, and explains that she pays for her own medical malpractice insurance, medical billing service, practice management service and health insurance.

She says that buying health insurance for herself and her family is the costliest aspect of not being fully employed and she believes that this factor may be among the leading reasons that many physicians choose to be employed by a healthcare system over self-employment.

Choosing the Right Fit

Paul DeChant, MD, a family physician working as deputy chief health officer, Simpler Consulting, part of IBM Watson Health says that choosing which health care system to align with is a vital part of balancing the combination between employment and independence. DeChant advises physicians “ to be a part of a medical group that has strong leadership and good relationships with the system. Ensure your values are shared by the system and its leadership.”

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DeChant says that a system led by physicians may be the key to a good working environment, “because there is better opportunity for physicians in a large system to practice with control over their professional and personal lives. Having physicians leading the organization helps ensure it has values aligned with the values physicians develop in their education, training and practice.”

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DeChant’s says that the benefits that come with being part of a large healthcare system are, “more financial security in a volatile marketplace, better contracting with payors, better infrastructure support – PI processes to improve performance, personal HR benefits, support staffing without hassle, and integrated EHR.” Yet, he also points to a number of negatives, such as, “more scrutiny regarding performance metrics and a lack of control over personal/professional if poorly managed.”

A Range Of Possibilities 

The increasing complexities when it comes to payer negotiations and regulatory compliance in healthcare have caused overhead costs to swell for doctors in clinical practice, making the practical advantages of being part of a large hospital system more appealing for many doctors. Yet, the relatively limited degree of independence associated with a traditional employment model causes some physicians to question the wisdom of accepting employment arrangements.

DeChant explains, “there will be fewer independent physicians in the future. There is a growing movement of Direct Primary Care in which primary care physicians are opening independent small practices serving a limited number of patients and eschewing contracts with payers. This may grow to some degree.”

But, doctors can find numerous types of set ups, and each individual physician values different aspects of independence in the professional setting. It takes some strategic planning early in the process to be able to maintain independence while at the same time partnering with a large hospital system. And ultimately, success in getting what you ask for is largely dependent on how much you are in demand as a physician and whether your professional needs are well matched with the needs of the hospital system.