Published 5/1/2012
Gregory S. McDowell, MD; Angie Wade

Help Wanted: Hospital-Employed Orthopaedists and State Societies

Changing patterns of employment have implications for state orthopaedic societies

Concerns that participation in state orthopaedic societies would not be a high priority for hospital-employed orthopaedic surgeons prompted the Board of Councilors (BOC) State Societies Committee to develop a 5-year strategic plan. One aspect of that plan was a survey of employed physicians, designed to identify the changing employment patterns among orthopaedic surgeons and the implications hospital employment of orthopaedists may have for state orthopaedic society membership.

A longitudinal review of AAOS member census data shows that most U.S.-based orthopaedic surgeons who are Academy members are not employed by hospitals. According to the 2010 census data, approximately 8.0 percent of Academy members are employed full time by a hospital or medical center, up from 6.7 percent in 2008 and 4.0 percent in 2000 (Fig. 1). Although the growth in hospital employment is modest, it is growth nonetheless.

Recognizing this trend, the AAOS Health Care Systems and Practice Management Committees developed a 14-page primer, “Hospital Employment of Orthopaedic Surgeons,” which was released at the 2010 AAOS Annual Meeting. A second primer, “Physician-Hospital Alignment: Strategies for Success,” was released at this year’s Annual Meeting.

According to Kevin J. Bozic, MD, MBA, approximately 10 percent—or 500—of the 5,000 accredited hospitals that provide a full spectrum of surgical services have a “bona fide orthopaedic employment program.” That number is expected to increase significantly during the next 2 years.

Employed physicians face some unique challenges. Consequently, state orthopaedic societies may have to develop unique services for this group.

Viewpoints from hospital-employed orthopaedists
To better understand the needs of hospital-employed orthopaedists, the BOC State Societies Committee charged the AAOS departments of society relations and marketing to develop an in-depth research study, the results of which are presented here. According to the study, hospital-employed orthopaedists are generally satisfied with their hospital contracts and readily tout the multiple advantages of hospital employment.

For example, issues related to practice management, reimbursement, and regulation/legislation are less significant for hospital-employed orthopaedists (Fig. 2). Advertising and marketing to the community are hospital responsibilities. Additionally, survey respondents implied that hospital employment allows for enhanced work/life balance, increasing personal time or the time they are able to spend with their families.

Study respondents also addressed the difficulties of hospital employment (Fig. 3). Among the list of potential issues, the impact of a bureaucracy on decision making appears most challenging.

Some respondents also detailed the downsides of being a hospital-employed orthopaedist, as the following comments indicate.

  • “It’s a double-edged sword. The good news is that you’re not responsible for a lot of people directly, which means you don’t have to sweat the monthly receipts quite as much. But at the same time you don’t have complete control of those people because they’re working for the hospital, not completely for you…you don’t really have the sort of same hire/fire control or disciplinary control that you have when you’re in private practice...”
  • “They tried to manage orthopaedics like they did primary care and culturally that became somewhat of a problem. I had different nurses every day, my X-ray tech changed with the schedule, and I had no control over that…I spend several hours a week on administrative planning to make sure that we have the right nurses, the right people, the right training, and that the hospital doesn’t extract them from me on a whim.”
  • “They just don’t understand you have different needs, more than just an office and a place to see a couple of patients as time goes on.”

As the “Hospital Employment of Orthopaedic Surgeons” primer points out, “The decision to undertake hospital-based employment is certainly complex when one acknowledges all of the variables that impact a successful alliance.”

What’s next?
Hospital-employed physicians view membership in state societies as important and often consider their state societies to be their legislative voice. However, hospital-employed physicians are slightly less satisfied with state orthopaedic society membership when compared to their counterparts in private practice
(Table 1).

Nearly one half of all hospital-employed respondents have a relatively tepid perception of their state orthopaedic society, rating it a “3–neutral” on the 1-to-5 satisfaction scale. This presents new opportunities for both the AAOS and state societies, because it shows that hospital-employed physicians are not opposed to state society participation, they just have no opinion. Therefore, state orthopaedic societies may be able to mold their opinion in favor of participation.

The BOC and the AAOS, through its department of society relations, will continue to monitor employment trends among orthopaedists, in particular movement from independent practices to hospital employment. State orthopaedic societies can seize the moment to create new and/or ancillary support services specifically for employed physicians.

  • For example, state societies are uniquely positioned to influence the dialogue between hospital administrators and hospital-employed orthopaedic surgeons. One consideration is to develop courses for hospital-employed orthopaedic surgeons. Potential topics for these courses include the following:
  • working with hospital administration
  • understanding differences in budgeting, revenue/expense generation, equipment, and staffing between the hospital setting and a private practice setting
  • educating hospital administrators on the nuances of working with orthopaedic surgeons vs. primary care physicians

Orthopaedic surgeons, regardless of their employment situation, also need help in developing or renegotiating their contracts. When asked to list all the resources they used in contract development and negotiations with their hospitals, slightly more than half (51 percent) of survey respondents sought legal counsel. However, a remarkable 20 percent did not use any resources for negotiations, and 3 percent are operating without any contract.

This presents another opportunity for state societies to attract and engage hospital-employed orthopaedists through specialized practice management courses and/or ongoing interactive panel discussions. For example, discussions about the contracting process, moving into hospital employment from private practice, various contractual arrangements, and ideas on how to dissolve contracts are all topics that would be of interest.

State society members perceive their orthopaedic state society as another voice representing orthopaedic surgeons in the legislative process. This also presents an opportunity to attract hospital-employed orthopaedists, simply by broadening legislative activities to include tracking and communicating changes in hospital legislation that have a potential impact on hospital-employed orthopaedists, as well as how new hospital, state, and federal healthcare laws affect the profitability of various practice models.

For more information about state society programs, please contact Susan Koshy at koshy@aaos.org

To learn more about the results of the Marketing Research Study, contact Angie Wade at wade@aaos.org

Gregory S. McDowell, MD, chairs the BOC State Society Committee; Angie Wade is marketing research manager in the AAOS marketing department.

Commentary: The writing is on the wall
Gregory S. McDowell, MD

The federal government is legislating healthcare reform for all of us. At present, it is strongly advocating for and supporting integrated health systems. Most orthopaedists, however, are not hospital-employed or members of vertically integrated systems. They are small business owners, hardworking individuals and groups of individuals in single or multispecialty orthopaedic practices who are encountering strong upstream currents and unlevel playing fields.

The orthopaedist who is a small business owner seeks to combat this unfair playing field by establishing a diverse base of ancillary services. He or she may be participating in facility management fees through ownership of ambulatory surgery centers or, in some instances, specialty hospitals. These independent surgeons must be mindful of a more rigorous set of anticompetitive regulations that pertain to self-referral. For example, reimbursement must not be proportionate to the volume of their referrals or they risk being in violation of these regulations.

Does legislated healthcare reform as we confront it today give unfair advantage to the small percentage of highly integrated healthcare systems that, through their medical practice divisions, obtain a leg up on the vast majority of orthopaedists who are small business owners? I think so.

Although employed physicians are generally happy with their contracts, they may have a false sense of security with these contracts. It would seem that neither the Academy nor the state orthopaedic societies provide enough help for physicians to understand how they might deal with contract negotiations. This may represent an opportunity for state orthopaedic societies and for the Academy. We should help both hospital-employed physicians and independent practitioners gain a better understanding of contractual relationships and negotiating skills. We also need to understand what degree of satisfaction exists with the contracts that independent orthopaedic physicians have.

State orthopaedic societies appear to be associated with addressing legislative advocacy and political activism. Members turn first to the American Association of Orthopaedic Surgeons and its political action committee, then to their specialty societies, and then to their state orthopaedic societies for advocacy. I frankly do not see this as a surprise, nor do I see it changing.


  1. American Academy of Orthopaedic Surgeons, Census Data AAOS Orthopaedic Surgeon Census
  2. The AAOS Healthcare Systems and Practice Management Committees: Hospital Employment of Orthopaedic Surgeons: A Primer for Orthopaedic Surgeons
  3. The AAOS Healthcare Systems and Practice Management Committees: Physician-Hospital Alignment: Strategites for Success
  4. Diane Thome Research, on behalf of AAOS Marketing, PHASE THREE Research: Hospital Employed Physicians and State Societies