Modern Recruiting: Spotlight on Physician Employment

Posted by Doximity TF Team

diversity-blog-300Doctors who own private practices have historically dominated the U.S. physician employment landscape. However, 2016 marked the first year in which less than half of practicing physicians owned their own practice: 47.1 percent (per policy research from the American Medical Association (AMA).

That means roughly half of all physicians in the United States now work for a hospital or are in a group owned by a hospital and it doesn’t show any signs of slowing, either. There are countless reasons hospitals are hiring physicians, among them: When a hospital employs a greater proportion of physicians in a healthcare market it can often negotiate more favorable payment rates with health insurers. Hospitals also argue that by employing physicians, hospitals can achieve greater integration of care. Pundits of hospital employment say there are fewer administrative burdens on doctors, too.

However, while employment by hospitals and health systems is up, hospitals across the U.S. are facing a serious talent shortage. There’s unprecedented turnover at every level. A survey from Leaders for Today (LFT) also cites a shrinking talent pool as more hospital employees age toward retirement, and a painfully slow hiring process that frustrates candidates and hospitals.

Lower costs and better care?

Ask any doctor though, and they’ll tell you the overwhelming problem they face is spending less time with patients, and research bears that out: employed physicians see 19% fewer patients than practice owners, per the Biennial Physician Survey 2016 from the Physicians Foundation. When physicians become employees, they forfeit a substantial degree of professional autonomy.  

Despite the looming physician shortage, traditional doctors like primary care physicians are being pushed closer and closer to extinction, too. “People are flocking to retail clinics and urgent care centers... where simple health needs can usually be tended to by health professionals like nurse practitioners or physician assistants much more cheaply than in a doctor’s office,” says the New York Times. “Some 12,000 are already scattered across the country, according to Merchant Medicine, a consulting firm.”

Additionally, visits to primary care doctors declined 18% between 2012 to 2016, even as visits to specialists increased (per Health Care Cost Institute), and the next generation of doctors has no fondness for independent, private practice, either. According to Merritt Hawkins’ 2015 Survey of Final-Year Medical Residents, 70% of newly trained physicians expressed a preference for an employed setting and four out of five residents will start their medical career working for a hospital.

Why are physicians opting to become employees?

According to a MedScape report on employed doctors, when asked why they choose employment, the most common response (38%) said it was due to having more financial security/less risk, followed by 28% attributing it to wanting fewer admin responsibilities. But employment isn’t always a conscious choice for physicians. As hospitals want to ensure they have the physicians they need, they’re buying out private practices, making it an easy choice for doctors to float over to becoming employees.

Is hospital employment the answer?

There’s no one-size-fits-all model for any doctor. It’s getting harder and harder for independent practices to go it alone, but autonomy and financial stability are top considerations. Some say medical training is almost entirely focused on the substance of medicine – diagnosing and treating illnesses – yet most of the challenges for physicians relate to the operations of medicine: coordinating care across multiple providers, regulations governing the use of EMRs, etc. Compensation is a huge factor, too – but that’s for another article. What are the pitfalls you’re facing as a hospital recruiting physicians, or as a physician debating your employment? We’d love to hear from you! Email us:

To learn more about the latest compensation trends, check out our Physician Compensation Report. 

Topics: Physician employment, Hospitals employing physicians, Hospital employment

Recent Posts