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.

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U.S. Hospitals Face Gloomiest Economic Outlook in 20 Years

Jane Sarasohn-Kahn

First posted 9/08/11 on Health Populi

Revenues = volume x price. This is the financial reality for every organization that makes its money serving customers, whether for-profit or not-for-profit.

For the U.S. hospital sector, both volumes and prices are falling, leading to a depressed top-line. Reimbursement reductions from Medicare, Medicaid and commercial health plans are all under pressure: that’s the ‘price’ part of the equation. On the volume multiplier, the recession economy has caused patients to delay care, such as elective surgeries. Hospitals are forced to scrutinize every aspect of operations, according to Hospital Revenues in Critical Condition; Downgrades May Follow, from Moody’s Investors Service.

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US Physicians are Becoming Health Economists

Jane Sarasohn-Kahn

First published 4/21/11 on Health Populi

Doctors practicing in the U.S. are becoming increasingly conscious of the increasing costs of health care. Most consider themselves cost-conscious, and are considering the impact of their practice patterns — in terms of prescribing medicines, tests, and procedures — on the nation’s health bill. In fact, most physicians feel they have a responsibility to bring down health costs.

This perspective on physicians comes from the survey report, The new cost-conscious doctor: Changing America’s healthcare landscape, from Bain & Company, published in March 2011. Bain spoke with over 300 U.S. physicians to assess their perspectives on managing costs, drug and device usage, and standardized care protocols.

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Over-Testing, Over-Utilization – Unintended Consequences and Associated “Costs”


Originally published 12/27/10 on The Orthopedic Posterus

We are an over-tested society.  Who is driving this? Are docs ordering more tests because it is easier than explaing the natural history of many injuries? Do patients insist on techno-imaging studies “just to see what’s going on”?   Yes 🙂  Most instances of over-testing in Orthopedics, I venture to say are not due to fear of mal-practice.  It is not the standard of care to image every ache or pain… nor does every ache or pain usually require anything more than a thorough history and physical exam.   Many studies show that a well performed interview and exam is usually more often correct at arriving at the diagnosis— or at least equally successful — than an MRI or CT.

So the next time you go to the doctor’s office… think twice about asking for an MRI, and ask why an MRI is being ordered.

As usual… this is not meant as medical advice… nor does it represent the opinion of my employers…

As requested…. transcript.

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