Healthcare Reform and the Hourly Wage MDs: Decreasing Productivity and Increasing Costs

Much debate remains around the concept of healthcare reform in the US today.  Almost all of us agree that our current system is broken and in need of an overhaul.  However, there are trends in the healthcare market that are increasingly troubling.

Due to changes in reimbursement, demands for Electronic Medical Records, documentation changes related to ICD-10 coding requirements and federally mandated quality measures, physicians can no longer afford to remain independent.   All of these changes require more work and additional office personnel.  Based on projections made by healthcare analysts, over 90% of cardiology practices will have “integrated” or assimilated (reference the Borg from Star Trek) with hospital systems by the year 2016.  Overall, it is estimated that over 50% of all types of physician practices will be hospital owned in the next year.  The loss of the traditional physician owned private practice will forever change the medical marketplace.  As a medical resident, we were always taught that the work day was done, when all the work was done–that translated into long hours and little rest.  These residency work habits follow most physicians into practice and rarely do physicians have regular work hours.  It is not uncommon to start before dawn and complete chart work and dictation late into the night.  If market trends continue along the path of integration and assimilation of individual practices by hospital systems we are going to begin to develop a very different culture of healthcare delivery where physicians may ultimately become hourly employees who “clock in and clock out” at the end of a shift.

A recent article published in the Wall Street Journal examines the idea of Doctors who “clock in and clock out” as hospital employees rather than small business owners.  This opinion piece ,written by Scott Gottlieb, is quite sobering.   Mr Gottlieb correctly highlights some of the issues associated with doctors as employees.  First of all, the acquisition of practices and physicians by hospital systems is often based on competitive advantage and market share increases in a particular area rather than on providing the best quality care.  Hospital systems leverage facilities, salaries and some cleverly push competitors out of the market by creating monopolies of care.  However, a larger problem is that there are some data that suggest that when doctors are employed by hospital systems, productivity actually declines.  When in practice and financially invested in the success of one’s own practice or organization, physicians tend to work longer hours and squeeze in more procedures, office visits and phone calls.  However, when physicians become employees, productivity decreases.  There are many reasons for the decreased productivity including the way in which physician work is actually measured and calculated by hospitals (based on medicare rules).  Physician work, measured in RVUs (relative value units) arbitrarily assigns numerical values to tasks that are commonly performed in medicine.  Not all agree that these assigned values are fair and equitable.

Ultimately we must decrease cost in healthcare.  Obamacare was crafted in order to provide access to care for all Americans AND to lower costs.  Unfortunately, Mr Gottlieb and I both agree that the pending healthcare reforms may actually increase costs in the long run.  The initial result of the reform legislation has been the trend of hospital acquisition of practices–and the resulting decrease in productivity.  So, it is not a great leap to assume that as more physicians become employees who punch a time clock the actual cost of care will increase substantially.

We must continue to work together to provide better solutions for our healthcare dilemma.  All players must be involved in crafting reform–physicians, politicians, hospitals, insurers, pharma and industry.  We cannot focus on one group and not the others.  The ultimate solution for healthcare delivery in the US will be the result of collaboration and regulation of all pieces of the healthcare puzzle.


One response to “Healthcare Reform and the Hourly Wage MDs: Decreasing Productivity and Increasing Costs

  1. The single largest question we receive on a day to day basis in the health care industry is how health care reform will change current Medicare services.

    While in many cases it is too early to tell until reforms are completely implemented, the reform laws as they stand today do have one major boon… the closing of the doughnut holes.

    Many on Medicare fall into a coverage cap, or “doughnut hole”, which will slowly be removed under the new law. The gap will garduallly narrow until it disappears in 2020 allowing for greatly reduced out of pocket drug costs.

    Marie Glancy

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