Employment of Orthopaedic Surgeons:
Understanding the trend
Health Care Systems CommitteeAlexandra (Alexe) Page, M.D.
Disclosures
Vice-Chair of the AAOS Health Care System Committee
Partner in Southern California Permanente Medical Group
I have no other conflicts of interest to disclose
Health Care Systems Committee
Is Employment the future of
Orthopaedics?
Health Care Systems Committee
MEDICINE?
“THE DECLINE OF SOLO AND SMALL MEDICAL PRACTICES”
UNITED STATES HOUSE OF REPRESENTATIVESCOMMITTEE ON SMALL BUSINESS
SUBCOMMITTEE ON INVESTIGATIONS, OVERSIGHT AND REGULATIONS
Testimony of:Mark Smith, President Merritt Hawkins
July 19, 2012
Employment in Ortho: Understanding the Trend
• Review the models of “employment”• Explore factors that are driving the trend• Present data from a 2010 AAOS Health
Care Systems Committee survey on surgeon practice patterns
• Suggest responses to the employment trend
ARS: “EMPLOYMENT” in the BOC/BOS
DO YOU CONSIDER YOURSELF EMPLOYED?
YESNO
Health Care Systems Committee
“Employment”: More options than a paycheck
• Staff Model / Foundation model • Hospitalist• Academic Center
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Staff Model
• Classic employment• Salary, salary + incentive• Staff Model:–e.g. Geisinger, Mayo, some
academic programs
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Foundation Model
• “Ban on the corporate practice of medicine” (CA, TX)• Medical group has exclusive
contract with a hospital• e.g. Cedars-Sinai, Sutter, Scripps,
Rady Children’s, Kaiser Health Care Systems Committee
Hospitalist
• Follows the internal medicine hospitalist model• Delphi established an early model–locum tenems –Filled void for hospitals which
could not provide ER coverage
Health Care Systems Committee
ARS: “EMPLOYMENT” in the BOC/BOS
Do you receive a paycheck for ANY component of your
professional services?YESNO
Health Care Systems Committee
“Employment”: More options than a paycheck
• Service line co-management, • Joint ventures• Medical directorship• Physician Enterprise Model• Affiliated Professional Entity
Health Care Systems Committee
Factors Driving Physicians
to
Employment Models
Health Care Systems Committee
HOSPITALS
1990’s•Physician acquisition defensive strategy against reimbursement change
•No physician involvement
•Compensation on past performance
•New physicians interested in private practice
Now•Acquisition as tool for care coordination, preparation for reimbursement change
•Physicians in hospital leadership•Compensation incentive-based
•Emerging physicians more interested in employment models
How has employment evolved?
UNITED STATES HOUSE OF REPRESENTATIVESSUBCOMMITTEE Testimony
Mark Smith, President Merritt HawkinsJuly 19, 2012
•Flat or declining reimbursement •Growing regulatory and administrative paperwork •Malpractice insurance costs •The implementation of information technology •The effects of health reform
Factors Driving Physicians to Employment Models
• Healthcare reform:–Move to integrated care systems
(e.g. ACOs, PCMH) –Value-based reimbursement–Reporting requirements (PQRS)
Health Care Systems Committee
Factors Driving NEWPhysicians to Employment Models
• Increasing burden of educational debt• Cultural change among
graduating physicians
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Hospital Factors Driving Employment Models
• Challenges with ER coverage• Potential for improvements in
quality/cost control in era of value-based purchasing• Hospital desire to control service lines• Market domination
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Hospital Factors Driving Employment Models
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ARS: In your community, how do employment contracts compare to net income in
private practice?
1. Above anticipated private practice income2. About equal3. Below anticipate private practice income4. Don’t know.
Health Care Systems Committee
Hospital Factors Driving Employment Models
Services provided in hospital-based entity
Free-standing physician practice
Physician Facility rate
Outpatient PPS rate
TOTAL HOSPITAL-BASED RATE
Program Payment
$55.18 $39.42 $60.10 $99.52
Beneficiary Cost Sharing
+13.79 +9.85 +15.03 +24.88
TOTAL PAYMENT
$68.97 $48.27 $75.13 $124.40
AAOS Health Care Systems Committee (HCSC)
2010 Study of Hospital-Physician
Alignment
Health Care Systems Committee
AAOS HCSC2010 Primer:
Hospital Employment
Health Care Systems Committee
2010 HCSC Study on Hospital-Physician Alignment
• Electronic survey to 3500 random AAOS Fellows January 2010• 119 emails returned, total 3381
“true” surveys distributed• 772 responded• Response rate 23%
Health Care Systems Committee
2010 HCSC Study on Hospital-Physician Alignment
• Employment trend recognized when collected in 2010• Provides powerful comparison to
data generated by 2012 study commissioned by the BOC SOS committee, presented next
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2010 HCSC Study
• Mean age of population invited: 51.25• Mean age of respondents: 52.10• Gender:
Response by practice type2010 HCSC Survey
Shift in Practice Type through Career2010 HCSC Survey
Health Care Systes Committee
2010 HCSC Survey Results
Trend of increase in employed positions from career start to time of survey–Vast majority (79%) still considering
private practice for future–72% had practiced in private setting
at some point
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Which setting are you considering for the future?
ARS: Are you considering an employment setting?
Health Care Systems Committee
1.STRONGLY NO2.NO3.UNDECIDED4.YES5.STRONGLY YES
Reasons for considering hospital employment2010 HCSC Survey
“I became a hospital employee by. .“ (n=142)
Problems encountered with Shift to Employment Model
Factors leading AAOS fellows to leave a hospital employment setting:
• Loss of control over staff, finances, contract negotiations, etc. (37%)
• Change in terms after initial contract term (33%)
• Lower compensation (28%)• Loss of autonomy (28%)
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What Does this Mean?
• 2010 data indicate transition from private practice to employment was increasing• Numbers were still low
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What Does this Mean?
Current trends:Transition to employed setting
andEmployment directly from training
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Is this the future of Orthopaedics?
• Possible shift to the dominant model as health care reform rolls out• I anticipate & hope there will
always remain a role for private practice
Health Care Systems Committee
Concerns with Rising Employment
August, 2011:Rising Hospital Employment of Physicians: Better quality, higher costs?
Health Care Systems Committee
Is this the future of Orthopaedics?
Hospitals may find acquiring physician practices & ASC’s less appealing:–MedPac recommendations to
decrease E&M reimbursement–OIG 2013 plan to review payment
disparity between ASC and HOPD rates
Health Care Systems Committee
MedPac Recommendation The Congress should direct the Secretary of
Health and Human Services to reduce payment rates for evaluation and management office visits provided in hospital outpatient departments so that total payment rates for these visits are the same whether the service is provided in an outpatient department or a physician office.
COMMISSIONER VOTES: YES 14 • NO 2 • NOT VOTING 1 • ABSENT 0
Office Inspector General 2013 Plan
Hospitals—Acquisitions of Ambulatory Surgical Centers: Impact on Medicare Spending
“We will determine the extent to which hospitals acquire ASCs and convert them to hospital outpatient departments . . . also determine the effect of such acquisitions on Medicare payments and beneficiary cost sharing.“
How do we respond to the trend?
Changing definition of what it means to be an orthopaedic surgeon, or even a physician
Health Care Systems Committee
Employment Challenges: Culture
•Issue for all hospital-physician alignment models•Changes in culture for both physicians and hospital•Generational culture changes
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Where do we go?AAOS, STATE SOCIETIES
• Understand and embrace the employed surgeon sector as part of the AAOS• Address the particular practice
needs and leadership training for the employed surgeon
Health Care Systems Committee
Where do we go?AAOS, STATE SOCIETIES
Recognize lifestyle expectations of the next generation may require changing the structure of small practices to attract new partners
Health Care Systems Committee
Where do we go? STATE SOCIETIES
Recognize & communicate:
Legislation on patient issues affects all practice patterns,
directly or indirectly
Health Care Systems Committee
Where do we go?
Education of residents:Different practice options
Understanding pros/consPersonal factors which can influence compatibility with practice types
Relevance of advocacy to all practice types
Health Care Systems Committee
Is Employment the future of Orthopaedics?
• Employment will likely increase but not eliminate private practice• Health reform will change all
practices. Just don’t miss the boat. . .
Health Care Systems Committee
Health Care Systems Committee