Cape Girardeau following a national trend of hospitals employing more physicians

More and more local physicians are turning to hospitals to buy their practices to escape the burdens of the business of medicine.

Health care reform mandates, uncertainty about future Medicare reimbursements and increasing operating costs are all factors area hospital officials say lead local physicians to approach them about purchasing their practices.

"The economics of running a practice are removed so that physicians can focus on patient care instead of business operations," said Steven Bjelich, president and CEO of Saint Francis Medical Center, which owns 25 medical practices employing 105 physicians.

SoutheastHEALTH employs 60 physicians working in the 16 medical practices it owns.

Government regulations and requirements from private insurance companies have increased the cost of managing a physician practice, said William Pfingsten, vice president of physician services at SoutheastHEALTH.

"Physicians want to provide their patients with the best possible care, but these government regulations and [private insurance] payor requirements are time-consuming and all too often pull physicians away from what they are trained to do and want to do," he said.

Cape Girardeau is following a national trend of hospitals employing more physicians. According to the Medical Group Management Association, from 2002 to 2008 the percentage of hospital-employed physicians grew by about 30 percent while physician-owned practices declined by about 20 percent.

Sixty-five percent of established physicians and 49 percent of doctors hired out of residencies or fellowships worked for hospital-owned practices in 2009, according to MGMA.

"Physicians coming out of residencies are seeking employment with hospitals, like Saint Francis, to assist in relieving the huge expense of medical school," Bjelich said.

They may not have the resources to buy into or start up a private practice, he said.

Both hospitals said younger physicians are looking for more of a work and life balance and the salary stability that being a hospital employee provides.

For hospitals, employing more physicians ensures a steady stream of patient referrals, said Dr. Eric Morton, an independent physician in Cape Girardeau who is concerned the trend is compromising patients' health care choices.

"Once a physician is hospital-employed, the hospital can't mandate, but they can strongly recommend they refer patients to other hospitals and specialists in their system," said Morton, a physician at Women First in Cape Girardeau. "That person might not be the best doctor for that patient."

Doctors employed by hospitals may also feel pressure to use expensive high-end technology at the hospital when lower-cost procedures would have the same outcome.

"I don't think they're doing anything that is illegal, unethical or immoral, but is it in the best interest of the patient when a lower-cost procedure would work?" Morton said.

He said he has nothing against his colleagues who are hospital-based physicians or how they practice medicine, but it's not for him.

"I don't want someone to tell me how to practice my craft. Telling me when and how and where to do it," he said. "I'm responsible to only one person. That is my patient. I have no financial responsibility to another institution so I don't have to worry about someone looking over my shoulder."

Tom Holloway, executive vice president of the Missouri State Medical Association, representing 6,500 physicians, said some doctors who have sold their practices to hospitals find themselves lost in hospital bureaucracy, and find their clinics low on hospitals' priority list for upgrades.

"Not everybody thinks this is a good thing at all. When you see consolidation in a free marketplace, it's not healthy," Holloway said.

Both Holloway and Morton said they've seen the trend before, back in the 1990s when insurance companies heavily pushed HMO plans.

"It didn't go well at all. Hospitals will admit they overspent, and a lot of them ended up divesting themselves," Holloway said.

Physicians bought their practices back for pennies on the dollar, Morton said.

Since Congress adopted the Patient Protection and Affordable Care Act in 2010, physician practices and hospitals started aligning again.

One of the provisions of the law creates a model of health care delivery for Medicare patients called accountable care organizations. These organizations of health care providers will have a hospital at the center of the organization along with primary care physicians, specialists and other medical professionals.

"It allows for closer cooperation among primary care doctors and those in specialty fields. This can prevent unnecessary duplication of diagnostic tests and medical records and provide for uniform payment systems," Pfingsten said. "This is particularly important because Medicare will be changing to a lump-sum payment system for patient care, which will include reimbursement for physician services and hospital care."

The ACO model is estimated to save Medicare as much as $430 million over three years by better coordinating care and eliminating duplication, according to the Centers for Medicare & Medicaid Services.

mmiller@semissourian.com

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