When we talk with independent physicians that are contemplating employment with a hospital system, there are usually a few different driving considerations. One of the top concerns for specialists is the loss of their referrals from primary care providers now employed by the system who will refer almost exclusively to specialists employed by that same system.
In spite of (lame) protestations by the integrated systems to the contrary, this is a very real risk. As we previously explored in our review of the anti-trust case in Boise, Idaho (click here), this is a valid concern. Employed primary care physicians, it turns out, can read their paycheck and tend to move almost all of their referrals to fellow employed specialists.
So by no means do I want to minimize this issue for practices that are facing it. But if this is the primary force against your practice that has you considering the employment alternative, I do want to ask you to pause and explore this more deeply before deciding.
First, we’ve worked with specialists who have come to understand that, in fact, only a small number of their referrals come through PCPs. This varies greatly by market, but make sure you understand what is actually driving your new patients.
But more important than your past referral patterns is where this is all headed, and this is one of the major reasons that I am bullish on the future of independent physicians in spite of the seemingly inevitable march to 100% employment.
There are a few big themes that we chronicle regularly in this space: we need healthcare to cost less; patients, especially those in high deductible health plans, are paying more and more of the bill and are beginning to make decisions like real consumers; and, thus far integrated delivery systems cost more and not less.
So mush those three thoughts together for just a minute.
While some patients will end up in a plan that operates with some type of gatekeeper model, many are going the other way, essentially spending their own money and making their own decisions.
If the total cost of care from that employed specialist costs more because the imaging or the procedure will occur in a hospital setting, many patients will say, ‘Thanks, but I’ll make my own decision about which specialist I see.’
For some of you, this represents a golden opportunity.
If referral disruption risk is your primary reason for considering hospital employment, just know that game is in flux.