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AAOS Now

Published 4/1/2013
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Deborah Meyer

Evaluate Employment Situations Carefully

During the 2013 Practice Management Symposium for Practicing Orthopaedic Surgeons, the question of hospital-employment of orthopaedic surgeons was a hot topic. In today’s healthcare market, many hospitals are seeking to employ orthopaedic surgeons, and many orthopaedic practices are facing financial challenges. But is making the switch worth it?

According to faculty members Louis F. McIntyre, MD, Westchester Orthopaedics in White Plains, N.Y., and Ian J. Alexander, MD, of Cleveland Clinic Health System, both practice settings have advantages and disadvantages.

Stay in private practice
Dr. McIntyre had been hospital-employed and is now in private practice. “One of the key benefits of a private practice is that, as an orthopaedic surgeon, I maintain complete control of operational decisions, revenue, and patient care,” said Dr. McIntyre.

“Employed physicians must adhere to the rules of their employer,” he continued. “The restrictions placed on the surgeon are often extreme; in many cases, the hospital will dictate what hours you see patients, what services are available for your patients, and even how you decorate your office. As an employed physician, you also lose control over staff size and staff hiring and firing decisions.”

Dr. McIntyre provided several caveats for surgeons to consider when reviewing hospital employment options. He noted that initial hospital employment offers often include high pay per work RVU (relative value units) and substantial incentives, but he cautioned, “once you become an employee, all leverage is gone.”

He pointed out that renewal contracts rarely retain the same perks as the initial contract. In addition, contracts may contain termination and restrictive covenant clauses that may make it difficult for an employed surgeon to stay in the area if he or she decides not to renew the contract.

“Just remember,” said Dr. McIntyre, “hospital administrators are process-driven. Surgeons, however, are in the business of caring for patients, and we are outcome-driven.”

Give it up
Dr. Alexander took the opposite view. Citing recent and pending reimbursement changes, he predicted a continued decrease in payments to surgeons, which might make it harder to maintain an independent practice.

Private practice ancillary income could also be in danger because physician-owned ancillaries are likely legislative targets. Hospitals, as the largest employers in many U.S. cities, could experience little or no negative effects from these changes.

“Hospital-employed physicians do not deal with payor contracts or insurance concerns,” said Dr. Alexander. “As an employed physician, I don’t have to worry about billing, reimbursements, and uninsured patient issues; the hospital handles them.” Capital outlays, mortgages, marketing, and patient recruitment concerns are other issues that the employed physician doesn’t have to contend with.

“Being an employed physician is not for everyone,” he admitted. “But depending on the circumstances in your community and coming changes in healthcare delivery, it may be a good idea to hook your wagon to the back of the bus before you get run over by it.”

Help from AAOS
Are you currently evaluating employment options or trying to decide between offers from practices? Turn to the AAOS Practice Management website for a free “Practice Evaluation Inventory.” You can rank both personal and practice factors. The higher the totals, the more likely the practice will be a good fit for you.

Visit www.aaos.org/pracman to download and save the free Practice Evaluation Inventory today!

Deborah Meyer is a member of the AAOS Practice Management group.