Doctors Hired by Hospitals– Continued Destruction of the Doctor-Patient Relationship

There is a New England Journal of Medicine article that summarizes the current trends in the employment of doctors by hospitals. (Hospitals’ Race to Employ Physicians–The Logic behind a Money-Losing Proposition by Robert Kocher, M.D., and Nikhil R. Sahni, B.S. New England Journal of Medicine May 12, 2011 Vol. 364 No. 19, pages 1790-1793) This article is available for free at I am going to dissect this article, not to challenge its veracity or accuracy, but rather to directly confront the underlying ethos, which it so clearly describes. I will discuss direct statements from the article by placing them in italics followed by my own observations, which are not italicized. I encourage the reader to obtain a copy of the NEJM article and read it, to make sure that I have accurately transcribed the authors’ words and also that I have not taken them out of context.

On page 1790: U.S. hospitals have begun responding to the implementation of health care reform by accelerating their hiring of physicians. I think the words, “implementation of health care reform,” refer to the implementation of the Affordable Care Act (ACA).

On page 1790: More than half of practicing U.S. physicians are now employed by hospitals or integrated delivery systems, a trend fueled by the intended creation of accountable care organizations (ACOs) and the prospect of more risk-based payment approaches. I intend to discuss ACOs in a future post on this blog. Here, I want to explore the concept of hospitals employing physicians. What does this mean? I believe it means the continued dissolution of the doctorpatient relationship. In business-finance-economic terminology, which I despise because this relationship is so much more profound than these dollar-based thinking disciplines can allow for, the doctorpatient relationship is an employee-employer relationship: an unusual one to be sure, since the employee, the doctor, retains autonomy. He/she, based on medical training and experience coupled with information from the patient, the employer, decides what is best to do in each individual situation. The patient, employer, can discuss the various approaches to his/her illness with the doctor and, over time, decide, without intervening conflicts of interest, what approach seems best suited for each individual circumstance. But this does not place them in the position of guiding the relationship. They must have non-conflicted guidance from the doctor, the employee.

I think the reader should ask at this point, Is this essay just philosophical, idealistic mumbo-jumbo? To answer this, I will ask and answer another question, What happens to the doctorpatient relationship, when a hospital pays the doctor’s salary, i.e., becomes the doctor’s employer? For the answer, let’s go back to the article.

On page 1791: Hospitals are willing to take a loss employing PCPs (primary care physicians) in order to influence the flow of referrals to specialists who use their facilities. The hospital is directing the specialty referrals. Does that not clear a direct path for dollar-based conflicts of interest? This is a direct interference with clinical decision making. The truly superb specialist or specialty group in the area may well decide that they are simply not going to jeopardise their medical decision making autonomy by choosing the hospital as their employer. Thus, the hospital can decide to direct those specialty referrals elsewhere. Figure 2 in the article demonstrates how hospitals are targeting not only PCPs but also specialists.

On page 1792: In the future, physicians (here, the article is referring to hospital-employed physicians) should anticipate a shift from guaranteed salaries to incentive-driven compensation linked to productivity and clinical behavior–with base compensation that is lower than their previous earnings but incentives that can increase it to that level or higher. This approach attempts to maintain productivity levels, while encouraging physician behaviors that reduce costs or increase revenues. WOW! Can you believe that this language is being penned in articles in a prestigious medical journal? This is direct destruction of the doctorpatient relationship by the hospitals’ dollar quest. Doctors, hired by a hospital, are supposed to adjust their clinical practice to reduce that hospital’s costs or increase its revenues. What happened to non-conflicted clinical decision making in the context of sound, ongoing doctorpatient relationships? The current and potential future business events, well-explained in this clearly written, informative article, are just as distressing and embittering as doctors performing completely unnecessary procedures solely for income enhancement.

The fundamental good defined by sound, ongoing doctorpatient relationships, the essence of medicine, is being destroyed by a greed-driven dollar quest. This is not capitalism per se but rather unbridled capitalism. Doctors are the ones who can stop this. Help will not come from our politicans because they have their own greed-driven, ideology-driven agendas, which are far removed from the concept of true benefit for individual people living in America.

How can doctors stop this?

1. Refuse to be employed by hospitals or by integrated health delivery systems,
2. Maintain complete independence from any group or organization, which influences or has the capacity to influence medical decision making to achieve its own goals, which are most often dollar-based rather than being about enhancing the quality and affordability of medical care for everyone, despite their rhetoric to the contrary.

On page 1792: Although some physicians may not want to trade autonomy for employment, they must understand that hospitals are under pressure to implement cost-saving strategies, which may benefit consumers if savings are passed on through lower prices. A mighty big IF in my view. Just why is it that our hospitals have become business fiefdoms driven by dollar profit, when the vast majority carry the designation not-for-profit?This begs the question, Do you really believe the financial statements put forward by these institutions? Why is U.S. hospital pricing referred to as “chaos behind a veil of secrecy?” (Uwe E. Reinhardt, The Pricing of U.S. Hospital Services: Chaos Behind a Veil Of Secrecy Health Affairs, 25, no.1 (2006): 57-69 Why do the U.S. hospitals’ contracting and billing departments, with their large cadres of highly skilled workers backed up by sophisticated computer systems that can simulate the revenue implications of individual contract negotiations, not offer the Lowest Possible Prices for their services and product. Most are not-for-profit, right? Trading autonomy for employment means engaging in the dollar game with hospitals, insurance companies, and the politicians, whom they lobby. Trading autonomy for employment means further destruction of the doctorpatient relationship because, by definition, the doctor must follow the directions of the employer, which is now a dollar-driven business, the hospital.

On page 1792: Of course, these choices (referring to employment choices made by doctors) will also affect patients. My view is that doctors should put the needs of the patient above their own needs and above the needs of any group, for whom or with whom they work. The day to day practice of this ethic is impossible, when the salary payer yanks the doctor’s dollar chain or threatens the doctor with removal from the medical staff, if he/she does not comply with their self-serving clinical guidelines. Of course, if a doctor questions just who is the author of these clinical guidelines, he/she will be met with a hail of prepared, official sounding but clinically meaningless rhetoric, such as evidenced-based and cost-effective. These business people are well prepared to shout the doctors down. The solution for this:–


One final thought: on page 1791, the authors state that the young doctors being hired today tend to value better work-life balance and are more willing than preceding generations to trade higher incomes for the lifestyle flexibilty and administrative simplicity provided by the hospital environment. Or, is it that they are lazy; do not wish to get involved in understanding the intriguing complexities of the medical cases of individual patients; and want to be 9 to 5 employees, free of responsibility outside these hours. Are our medical schools training computer-literate drones as opposed to independent, curious clinicians, who can recognize and respond to the fact that patients’ illnesses do not follow a 9 to 5 schedule?

R. Garth Kirkwood, MD