Reducing the Loss of Employed Physician Groups is Imperative for Hospitals' Financial Viability
The average loss per health system employed physician is over $250,000 annually and is increasing. Physician salaries are increasing due to the shortage of providers while Medicare has adjusted its physician fee schedule: one and one quarter percent (1.25%) 1 in comparison to a four and one-half percent (4.5%) increase in supporting a practice.
Hospitals and health systems cannot afford to lose this amount of money on their employed physician practices and remain financially viable. Hospitals nationally have employed practices which are approaching financial self-sufficiency.
These better-performing practices have common characteristics:
- Employed physician groups own multi-specialty groups.
- Physicians drive practice performance through a physician dominated governance structure.
- Compensation is based on individual provider production.
- Accurate information is provided to compare physician performance to their peers and national information.
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Culture is healthy and physicians feel valued and appreciated.
Physicians are the marketing channel that supports hospitals and health systems. The growth in hospital employment of physicians has been accelerating and can be expected to continue to grow. However, hospitals and health systems cannot afford to grow their employed physician network without improving their financial performance.
If you want more insights , please go to https://www.luminahp.com/medical-group-strategy or email jpeters@luminahp.com.