During that discussion, we heard from Wilford K. Gibson, MD, chair of the Board of Councilors (BOC); Craig A. Butler, MD, MBA, chair of the Health Care Systems Committee; John Cherf, MD, MPH, MBA, a member of the Practice Management Committee; Thomas J. Grogan, MD, chair of the Practice Management Committee; and Louis F. McIntyre, MD, a member of the Coding, Coverage, and Reimbursement Committee.


Published 12/1/2013
Joshua J. Jacobs, MD

What a Way to Make a Living

Recently, the AAOS Board of Directors participated in a strategic discussion on “The Employed Physician.” Granted, practically every member of the AAOS is gainfully employed—whether as a solo practitioner in a private practice, a partner or associate in a group practice, a member of an academic medical department, or a salaried employee of a hospital or medical center (Fig. 1). The Board’s discussion focused on what the changing employment landscape might mean to the Academy and our profession.

Joshua J. Jacobs, MD

Dr. Gibson presented the results of a BOC survey on practice settings. Although private practice remains the dominant setting, more than a third of respondents reported that the hospital where they practice had purchased orthopaedic practices. Most respondents also reported receiving a proposal to establish a strategic alliance with a hospital (Fig. 1). A recent survey of PGY-5 residents found that about 10 percent planned to work for a hospital or medical center—but more than a quarter of those surveyed were still “undecided.”

To help residents make that decision, the AAOS Practice Management Committee has developed several resources, including courses, primers, web-based tools, and a webinar for orthopaedic residents on employment decisions.

Factors driving the decision
Many factors—including healthcare reform—are driving physicians to consider hospital employment, noted Dr. Cherf. Compared to physicians in private practice, hospital-employed physicians may enjoy more stable work hours, less administrative work, a lower exposure to malpractice, access to pension and health benefits, and lower overhead costs. A salary may offset the decline in insurance reimbursements that many private practitioners have experienced.

Hospital employment may also help ease a physician’s concerns about regulatory compliance, personnel matters, threats to ancillary service income, and new payment models. And although these are good, practical concerns and may be considered benefits of hospital employment, signing that employment contract has associated risks.

Contract clauses on compensation formulas, continuing medical education, term and termination (with and without cause), and noncompete agreements are important considerations. Unfortunately, many of these issues are not covered during residency and, although experience may be the best teacher, lessons learned through experience are often painful. According to Dr. Grogan, this may be an area where the AAOS can help, by developing specific Instructional Course Lectures, primers, and webinars on topics such as negotiating skills or contracting.

Education and advocacy
If the shift to employed physicians affects the educational products the AAOS offers, will it also have an impact on our advocacy efforts?

According to Dr. Butler, it may. Although several advocacy issues—including the growth of specialty hospitals, the threat to in-office ancillary services, the development of performance and quality measures, and payment reform—affect both private practice and employed physicians, hospitals and physicians come at these issues from different vantage points. It will be challenging for our organization to align our priorities to address these topics.

Challenging, but not impossible, as we have seen with the Medicare Administrative Contractors and Recovery Audit Contractors. When these audits were conducted at the hospital level and resulted in “clawbacks” of payment, it became imperative for private practitioners to work with their hospitals and improve their documentation.

Because most orthopaedic surgeons may remain private practitioners, the AAOS advocacy efforts will continue to focus on unity among orthopaedic specialty societies, quality care, and the education of legislators and regulators about the true value of orthopaedic treatments. (See cover story “Rotator Cuff Treatments Pay Off.”) In addition, AAOS will work with state societies to help them maintain membership and advocate on a local level about issues that affect all orthopaedists.

Is the grass greener?
Previous discussions and surveys on the employment model have revealed an interesting paradox: Employed physicians frequently wish they were in private practice, while private practice physicians often long for the security of a hospital position. Dr. McIntyre, like Dr. Butler, made the shift from private practice to employed physician—but then returned to private practice.

Although hospital employment may eliminate the hassles of negotiating with insurance companies, dealing with staffing issues, and addressing technology issues, it does have its “down side.” Physicians who have managed their own practices for some years may find a hospital environment stifling and feel left out of the decision-making process.

“The physician loses control of the practice environment, the administrators drive the process, and the surgeons are outcome-driven,” said Dr. McIntyre, who also warned that the second contract is often much worse than the first. He noted that not enough staff positions exist to employ all physicians, so that strengthening private practice and other practice models will be important.

One size doesn’t fit all
During the subsequent discussion, your Board members agreed that one business model should not have preference over another, because no single practice model will work for everyone. It may be that the hospital-employed model is just this year’s “hot topic,” and the pendulum may swing in the opposite direction in the future.

Your Academy will make every effort to respond to the needs of all members by developing the best educational tools and appropriate resources regardless of business model. The AAOS will continue to offer practice management tools and support, particularly with regard to negotiations and other contracting issues. In this era of healthcare reform, new practice realities, transitions to innovative practice models, and changes in the relationships between physicians and hospitals will be evolving. Your Academy will be ready to assist in responding to those changes.