Question: Does Hospital Employment Guarantee Physicians Stability?

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HRF-thumb1Although this opinion piece from Mark F. Weiss, JD, over at Anesthesiology News is directed at physicians, we’d like to get your input as executives on the ideas being put forth.

Basically, Weiss is challenging the notion that hospital employment of physicians is better than staying in private practice. He reminds physicians that the current corporate environment is actually unstable, with many businesses reducing their labor force to part-time, replacing staff with temps, and outsourcing as much as possible.

Recently, for example, Merck laid off over 100 employees, Heinz bade farewell to 600 employees, and Cisco axed an astounding 4,000 employees. If these big-namers are launching such massive scalebacks, Weiss wonders, why would hospitals be immune, especially in an era of declining reimbursements, intensely escalating federal and state regulations, etc.?

Furthermore, the government’s employment numbers are highly misleading, Weiss writes. “Only 23 percent of the approximately 950,000 jobs the economy added from January to July 2013 are full-time. The remaining 730,000 of those jobs are part-time positions.”

“…[W]hy the disconnect?” he wonders. “Why do many physicians believe that employment in hospitals, hospital-captive medical groups or large staffing-model groups provides safety or stability when the world around them for other employees—unskilled, skilled, and professional—is in turmoil?”

Remember, he urges: “Corporations exist to make a profit. There’s nothing wrong with that. It’s a fact of life. But because all corporations, and that includes hospitals and especially staffing service-model groups, exist to make a profit, they will always seek to lower their costs. Of course, costs include employment costs, which includes salaries…”

Weiss realizes the alleged benefits physicians see in hospital employment: “It’s less complicated than running a group; my employer will find work for me; there is no need to compete for the exclusive contract; I may earn less, but at least I’ll have stability.” But he fears some romanticizing is going on. In a physician’s mind, they see the following: show up for work; collect paycheck; go home.

“But healthcare employers are not substitute parents,” he writes. “Sure, parents may kick you out of the house, but employers fire you or lay you off and never invite you back for the holidays. The same trends affecting industry in general, leading to layoffs, part-time and temp work, also are affecting healthcare.”

As proof, he offers up the following hospitals, all of whom recently laid off employees: Crestwood Medical Center in Alabama, Baptist Memorial Health Care in Tennessee, King’s Daughters Health Systems in Kentucky, Maine Medical Center, Alameda Health System in California, and Samaritan Medical Center in New York.

It’s true, no physicians were victims of these layoffs, he hastens to add, but “with more physicians employed by large organizations, it is only a matter of time before they, too, are affected by cutbacks.” And the nonprofit status of most hospitals really doesn’t impact their ability or desire to cut back on costs, since they, too, are corporations.

He concludes: “The urge to seek security is entirely human and virtually universal. But what appears safe in today’s healthcare economy, what appears less complicated in today’s healthcare economy, and what is clearly the trend in today’s economy—employment by hospitals—is far more risky than it appears.”

As healthcare executives, do you agree with Weiss’ premise, that hospital employment is just as risky as maintaining one’s own practice? How do you provide your employed physicians with job security and career stability?

-by Pete Fernbaugh

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