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The Physician Employment Trend Continues – Three Keys to Success

December 17, 2015


It’s no surprise that another survey shows more physicians are opting for employment with a hospital or health system, over private practice.481882773

“In its annual survey, Jackson Healthcare found that primary care physicians employed by hospitals in America jumped from 10 percent in 2012 to 20 percent in 2014. “The shift from private practice to employment continues,” reads the survey. “And the ripple effects of this trend continue to impact patient satisfaction, compensation, practice environment, workload, and patient access.”

(from a summary in Dallas Fort Worth Healthcare Daily)

At the same time, hospitals are rethinking these employment contracts, with a move toward rewarding quality, as opposed to volume, of care. As hospital payment shifts more toward pay for performance, hospitals will be looking at existing employment agreements and, as they expire, renegotiating physician payment with bonuses tied to quality.

(To learn more, see the recent article in Modern Healthcare.)

So, what will “success” look like in this new employed physician model? Success for the hospital? Success for the physician? We need to create a culture where hospital and physician goals intersect. How do we reconcile the health system’s goals of quality, safety, the patient experience, reducing costs and maintaining market share, with the physician’s simple goals of quality patient care, and career success and satisfaction? We are asking physicians to figure out what it means to be an employee, while maintaining the professional autonomy they value – and at the same time asking them to lead, to innovate, and to collaborate. Are they prepared to succeed? Are we preparing them?

Whether it’s a new primary care physician or a department chair, physicians are valuable institutional resources. In other industries we take great pains to select important employees carefully and, once they are onboard, to develop their skills and make them successful. How can we apply the same approach to physicians?

1. Define what success looks like. Primary care, surgeon, specialist or department chair - we can’t manage performance and develop a physician’s behavioral skills if we haven’t defined success. Define operational expectations (many physicians leave because they don’t feel expectations were ever properly “aligned” or their practice adequately supported). Define behavioral expectations. What does it mean to be collaborative, to be adaptable, or to be a leader in your organization?

2. Evaluate candidates and incumbents. A short survey can identify misalignment of expectations. I often tell the story of the cardiac surgeon who saw 5 patients a day, to the great dismay of the hospital COO who had hired him – but they never asked – They never clarified expectations! If you expect physicians to display certain behavioral skills, you’d better assess them. We asses candidates for C-suite positions all the time yet we hand over the keys to the department to the polished physician with the impressive CV –only to act surprised when he or she doesn’t really have any leadership skills?

3. Develop each physician. Leaders, important employees, and even senior executives in your organization probably have individual development plans. You probably even have resources and methods to help them develop their leadership skills. Do the same for physicians. Every physician should have a developmental plan with clear operational and behavioral goals – goals that go toward both organizational and individual success – and the tools to meet the goals. Plug potential leaders into some formal program to develop real leadership skills.

To learn more, see our free White Paper:  


Bryan Warren Bryan Warren was the former Director of Healthcare Solutions at PSI. He was responsible for developing and promoting tools and services designed specifically for the unique challenges faced by healthcare organizations.