Physician Employment ≠ Quality of Care

As previously mentioned regarding physician practice acquisitions, many hospitals around the country have sought in recent years to increase their number of employed physicians.  Their goal of doing so is to be better prepared with healthcare reform that reimburses based on quality of care, outcomes and cost control rather than the traditional fee-for-service system.  The belief by many hospitals has been that employment of physicians will lead to greater care coordination, more closely aligned incentives, and ultimately better patient care.  However, a new study in the Annals of Internal Medicine demonstrates that “no association was found between switching to an employment model and improvement in any of 4 primary composite quality metrics.”  Specifically, there were no resultant changes in mortality rates, 30-day readmissions, length of stay or patient satisfaction rates.  Researchers noted:

“Although some of these improvements certainly are taking place as hospitals increasingly employ physicians, on the basis of the hospital performance metrics we examined, we found no national-level evidence that these changes have translated into better patient care.”

In the study, 803 acute care hospitals in the U.S. that switched to an employee relationship with their physicians were compared with 2,085 hospitals that maintained unaffiliated or contractual relationships with their physicians.  The researchers’ summed up their study by stating:

“During the past decade, hospitals have increasingly become employers of physicians. The study’s findings suggest that physician employment alone probably is not a sufficient tool for improving hospital care.”

Consequently, the study recommends hospitals should instead focus on ways to boost clinical integration and improve patient care instead of hoping those goals will be accomplished solely by employing more physicians.  The study that was recently published in the Annals of Internal Medicine can be found here.

On a related noted, other data proving that financial integration between physicians and hospitals has been associated with higher commercial prices and spending for outpatient care, can be found in my Consolidation ≠ Efficiency article.


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