Savvy pathologists and clinical laboratory professionals will look for ways to generate increased value to clinicians by becoming partners and consultants in clinical decisions
Becker’s Hospital Review has identified seven trends in hospital-based physician pay that have emerged over the past several years. These trends reflect fundamental changes in the private practice of medicine and will be of interest to those pathologists and clinical laboratory managers who provide medical laboratory tests to office-based physicians.
As defined by Becker’s in a story published last year, the seven trends indicate shifts in income, along with increasing numbers of physicians migrating out of private practice to salaried hospital positions. Pathologists will want to keep these trends in mind as they plan their personal careers, taking special note of emerging opportunities to generate value in new ways.
Seven Trends in Hospital-based Physician Pay
Here are the seven trends identified by Becker’s:
- Earning power is greater for physicians in a hospital-based setting.
- Cardiology, ophthalmology, general orthopedic surgery, neonatal medicine pediatrics and neurosurgery are high-paid specialties to watch.
- Benefits for physicians mirror the general hospital employee base, not the C-suite.
- Hospitals are emphasizing value over productivity.
- Hospital-affiliated, primary-care physicians will eventually see their salaries increase.
- The highest-paid physicians at hospitals have the highest expectations, especially those in administrative roles.
- Compensation arrangements between hospitals and physicians involve quid pro quo elements.
For pathologists and clinical laboratory managers, the two most relevant trends are: 1) the shift of earning power to hospital-based practice, rather than private practice; and, 2) the shift of payment models from volume to value.
Higher Earning Potential for Doctors Shifting to Hospital-based Settings
Traditionally, self-employed pathologists have earned more than physician employees. Now, hospitals are positioning themselves for the shift to value-based reimbursement. Part of that strategy entails attracting physicians with salaries that often are greater than private practice affords, according to a recent story published in the New York Times.
Physicians, in turn, are choosing hospital employment in growing numbers. Placement firm Merritt Hawkins expects that within two years, 75% of the physician jobs it fills will be hospital-based positions, reported the New York Times.
Advantages of Employment
In Medscape’s 2014 report, “Employed vs. Self-employed: Who Is Better Off?”, physicians indicated the top three benefits of employment over private practice are:
- Not having to run the practice;
- Not having the aggravation of billing and collecting payments; and
- Having a guaranteed income.
In alignment with these changes, some anatomic pathology groups may begin to rethink the benefits of private practice over hospital employment. “[T]here’s a lot of uncertainty about how health reform is going to play out,” stated Robert Mechanic, an economist who studies healthcare at Brandeis University’s Heller School for Social Policy and Management, told the New York Times.
Increasing Complexity of Clinical Decisions Could Favor Pathology
Long-term, perhaps the most significant trend for pathologists and clinical laboratory managers is the shift toward value-based healthcare. “Value can be defined as patient outcomes divided by total cost per patient over time,” stated Institute of Medicine (IOM) member, Denis A. Cortese, M.D., on the IOM website. Cortese is Foundation Professor and Director of the Healthcare Delivery and Policy Program at Arizona State University, in Phoenix and Emeritus President/ CEO at the Mayo Clinic.
That means clinical decision-making is at the heart of value. New knowledge, tests, treatments, and technologies drive clinical decision making, according to a College of American Pathologists‘ (CAP) report for healthcare executives, titled “Unlocking a New Layer of Value: Pathology-Supported Decision Making.”
The exponential rise of these drivers means that providers are “missing opportunities to make higher value decisions through effective application of genomic medicine and data informatics tools because of their extremely rapid development and complex nature,” the CAP authors wrote.
Trends in Hospital-based Physician Pay Reflect a Changing Market Reality
The seven trends in hospital-based physician pay described by Becker’s reflect the changing reality in the healthcare marketplace. In the introduction to this story, the author noted that currently, about 25% of all specialty physicians who see patients at hospitals are employed. Similarly, there was a doubling in the number of employed physicians since 2000. About 40% of physicians are now employed by hospitals.
The migration of physicians from self-employment to employed settings is a development that has implications for clinical laboratories and pathology groups. Among other things, it means that, when seeking the specimen referrals from providers in the outreach market, lab sales representatives will be talking to the owners of these medical groups and not the physicians who order lab tests every day.
—by Pamela Scherer McLeod