Higher Medical Bills Predicted as More Doctors Switch to Hospital Jobs

Saturday, February 15, 2014
(graphic: Southern Beauty)

Changes in the ways Americans get healthcare are causing some physicians to take down their shingles and go to work as hospital staff members. And that may lead to higher medical costs.


In 2013, 64% of positions filled by a leading physician placement firm were in hospitals, according to The New York Times. That compares to 11% of placements in 2004.


Hospitals are offering attractive salaries — in some cases, raises — to physicians who join their staffs. That, combined with decreasing reimbursements from Medicare and private insurers, has caused some physicians to give up running their own businesses and opt for work as salaried employees.


“From the hospital end there’s a big feeding frenzy, a lot of bidding going on to bring in doctors. And physicians are going in so they don’t have to worry — there’s a lot of uncertainty about how health reform is going to play out,” Robert Mechanic, an economist who studies healthcare at Brandeis University’s Heller School for Social Policy and Management, told the Times.


This could cause costs to rise for those seeking medical care. Some hospitals offer bonuses to doctors who refer patients to other services handled in-house. In other instances, when a doctor group has sold its practice to a hospital, procedures (sometimes unnecessary) performed during office visits have “facility fees” added to the bill. Some organizations, such as California’s Kaiser Permanente, hope that having more physicians on staff will change the trend of rising prices via more efficiently coordinated patient care.


Hospital enthusiasm for hiring hasn’t been a bonanza for all doctors, however. Primary care physicians, who are at the bottom of the pay scale for doctors, have been difficult to attract.


One thing that can lead to a better patient experience is if doctors not only work for a hospital, but also run it. A study (pdf) by the Institute for the Study of Labor showed that doctor-run facilities in the United States provide significantly better care than those managed by administrators. However, physicians operate fewer than 300 of the 6,500 hospitals in the country.

-Steve Straehley


To Learn More:

Apprehensive, Many Doctors Shift to Jobs With Salaries (by Elisabeth Rosenthal, New York Times)

Hospitals Healthier When Run by Doctors, Which Rarely Occurs (by Noel Brinkerhoff, AllGov)


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