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The Truven Health Blog


The latest healthcare topics from a trusted, proven, and unbiased source.


Doctors “Clocking Out?” Not So Fast

By Michael L. Taylor/Tuesday, March 19, 2013

Mike Taylor imageRecently I noticed an article that projected drastic declines in physician productivity, increasingly fragmented care, and higher costs due to hospital-based care monopolies – all due to ‘ObamaCare.” Of course these are not the results we expect from healthcare reform and I wonder if the point of the article was simply to be provocative. 

It is true that employed physicians may be less productive, but in my experience this is often a temporary adjustment to new processes, new IT systems and other transition issues. Do hospital-employed physicians become hourly wage earners? Hardly. They are salaried, and they are employed to provide care to patients during standard office hours which typically are quite similar to the hours of their private practices. Nevertheless, becoming a hospital employee is attractive to many physicians who see their incomes shrinking in private practice – especially primary care physicians – or who find themselves spending increasing time managing the business side of their medical practice. 

The US healthcare system is dysfunctional and delivers fragmented care regardless of the employment status of the physicians. Hospital-based primary care physicians, also known as hospitalists, improve care (as do intensivists), and while the communications between inpatient and outpatient providers can be tricky, this has nothing to do with the ACA. I know, because I set up a hospitalist program in 1997, well before anyone knew who Obama was!

It is also true that procedures performed in the hospital setting are reimbursed at a higher rate than when performed in the the doctor’s office, and this has been a longstanding issue for all insurance plans. However, hospitals are buying practices to maintain and grow market share – and, yes, now to prepare for ACOs – as a matter of survival. This is not about getting paid more for procedures. In fact, in the ACO world, we will see even more shifting of services to outpatient facilities where effective care can be delivered more efficiently.

The tight association of physician compensation with volume of services has been described for decades as a ‘perverse incentive,’ and shifting payment from volume based to value based is exactly the sort of free market solution that we need. This will lead to  better quality – the right care, at the right time, in the right setting, by the right provider, for the right results  as we have seen at respected institutions with integrated delivery care systems. 

The good old days of unlimited spending for unquestioned healthcare services are over. The era of evidence-based decision making, measuring and rewarding quality, transitioning away from fee for service is approaching—as a country, we have every reason to embrace its arrival with open arms.
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