Physicians, Health Systems and the Drive For Market Dominance

Brian Klepper

Posted 5/23/13 on Medscape Connect’s Care & Cost Blog

BK 711Several physicians have reached out recently to discuss attractive employment offers from health systems. They are invariably conflicted. They understand the trade-offs, that they’ll give up the autonomy they’ve become accustomed to in exchange for more money and fewer practice management headaches. On the down side, they’ll be accountable for generating significant revenues, sometimes independent of care appropriateness.

Most also are aware that the same care services they provide now will be considerably more expensive once they’re part of a system. Many appreciate that because health systems are corporations with a heavy focus on optimizing short term gains, their future employer’s loyalty is suspect. And then there is the question of whether the health system’s management team is competently preparing to be sustainable in a market that could change dramatically.

As health systems maneuver to dominate regional markets, driving utilization and gaining more leverage over contractual pricing, physician employment has become their principal lever. Primary care physicians (PCPs) are now precious commodities that can manage populations and steer patients into the system’s services. Other specialties – e.g., cardiology, orthopedics, neurosurgery and even gynecologic oncology – are desirable if they’re high yield, driving lucrative, intensive use of inpatient and outpatient services.

Continue reading “Physicians, Health Systems and the Drive For Market Dominance”

As Predicted

Paul Levy

First posted 10/06/11 on Not Running a Hospital

A propos of the story below, see this comment from a piece by Paul Ginsburg in the New England Journal of Medicine.

The unchecked market power of some providers promises to become increasingly problematic for private payers. And if market approaches prove insufficient to solve a problem of this magnitude, regulatory intervention becomes more likely.

_____________

Why is this is a big deal?

Here’s what I predicted last April, with regard to the negotiation between the state’s largest insurer and the state’s largest provider group:

Look for the following “victory” announcement in the coming months:

Continue reading “As Predicted”