Nearly 80% of physicians in the United States are now employed by hospitals, health systems or corporate entities, a share that has grown steadily as hospitals have refined what they deploy at the residency and fellowship level.
https://www.beckershospitalreview.com/quality/hospital-physician-relationships/nearly-80-physicians-now-employed-by-hospitals-corporations-report-finds/
Grant Zarzour, MD, president of Southern Orthopaedic Alliance, a 40-surgeon group in Alabama, has watched that dynamic play out from the inside.
Hospitals show up in residency programs with structured sponsorships and upfront compensation offers that a physician living on $60,000 a year has little context to evaluate. Private practice groups, by and large, do not show up at all.
“Private practice groups aren’t recruiting physicians in residency or fellowship nearly as effectively as they need to be,” Mr. Zarzour said during a panel discussion at Becker’s Spine, Orthopedic and ASC Conference. “We have to go back to the supply and educate them on their options because they think there’s just one.”
The upfront salary advantage hospitals carry is real. But Mr. Zarzour argues it is borrowed against a long-term picture that residents, stressed and underpaid in the middle of their training, cannot see clearly.
“Yes, they can come out the door and write a bigger check, but long term it’s not going to be a win,” he said.
Dutch Rojas, founder of Bliksem Health and co-founder of Physicians Capital Fund, recalled a neurosurgery fellow mentioning the salary he expected to receive at a hospital-employed position. Mr. Rojas asked how much of it he expected to take home.
“He goes, ‘What do you mean – divide by 12?'” Mr. Rojas said. “It’s not $600,000, it’s like $310,000 maybe $320,000 if you’re lucky.”
The fellow’s confusion was not unusual. Medical training has progressively reduced the space available for business education, leaving physicians to encounter the mechanics of compensation, overhead, ASC ownership and payer contracting at the exact moment they are least equipped to evaluate them.
“We have to tell them how the real world works,” Mr. Rojas said.
Mr. Zarzour said the responsibility falls partly on independent practice leaders to re-engage the academic environment, not to replace what hospitals are doing, but to ensure that residents and fellows know the full range of options before they sign. Private practice groups need to be recruiting during training years and building relationships long before physicians are fielding offers.
Beyond recruiting, both Mr. Zarzour and Mr. Rojas identified a pattern in physician psychology that makes the problem self-reinforcing. Physicians who do enter independent practice, or attempt to build businesses alongside it frequently bring the same professional instincts into entrepreneurship that served them in the OR: certainty, authority and a reluctance to acknowledge blind spots.
“You have to admit what you don’t know and surround yourself for your weaknesses and give them the control to make the decisions that you really shouldn’t be a part of,” Mr. Zarzour said.
Mr. Rojas argued that the economic and quality case for independent practice remains strong but is not being made effectively. Independent physicians, when organized and well-capitalized, can deliver care at lower cost and higher quality than employed models. The challenge is that the physicians best positioned to make that argument are often too busy practicing to make it.
“Independent medicine changes patient lives. It’s lower cost, higher quality, significantly better,” Mr. Rojas said. “I think this next five to 10 years, we’re going to see more doctors taking risk.”
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