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Employment of Orthopaedic Surgeons: Understanding the trend

Employment of Orthopaedic Surgeons: Understanding the trend. Health Care Systems Committee Alexandra (Alexe) Page, M.D. Disclosures. Vice-Chair of the AAOS Health Care System Committee Partner in Southern California Permanente Medical Group

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Employment of Orthopaedic Surgeons: Understanding the trend

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  1. Employment of Orthopaedic Surgeons: Understanding the trend Health Care Systems Committee Alexandra (Alexe) Page, M.D.

  2. Disclosures Vice-Chair of the AAOS Health Care System Committee Partner in Southern California Permanente Medical Group I have no other conflicts of interest to disclose Health Care Systems Committee

  3. MEDICINE? Is Employment the future of Orthopaedics? Health Care Systems Committee

  4. “THE DECLINE OF SOLO AND SMALL MEDICAL PRACTICES” UNITED STATES HOUSE OF REPRESENTATIVES COMMITTEE ON SMALL BUSINESS SUBCOMMITTEE ON INVESTIGATIONS, OVERSIGHT AND REGULATIONS Testimony of: Mark Smith, President Merritt Hawkins July 19, 2012

  5. Employment in Ortho: Understanding the Trend • Review the models of “employment” • Explore factors that are driving the trend • Present data from a 2010 AAOS Health Care Systems Committee survey on surgeon practice patterns • Suggest responses to the employment trend

  6. ARS: “EMPLOYMENT” in the BOC/BOS DO YOU CONSIDER YOURSELF EMPLOYED? YES NO Health Care Systems Committee

  7. “Employment”: More options than a paycheck • Staff Model / Foundation model • Hospitalist • Academic Center Health Care Systems Committee

  8. Staff Model • Classic employment • Salary, salary + incentive • Staff Model: • e.g. Geisinger, Mayo, some academic programs Health Care Systems Committee

  9. Foundation Model • “Ban on the corporate practice of medicine” (CA, TX) • Medical group has exclusive contract with a hospital • e.g. Cedars-Sinai, Sutter, Scripps, Rady Children’s, Kaiser Health Care Systems Committee

  10. Hospitalist • Follows the internal medicine hospitalist model • Delphi established an early model • locum tenems • Filled void for hospitals which could not provide ER coverage Health Care Systems Committee

  11. ARS: “EMPLOYMENT” in the BOC/BOS Do you receive a paycheck for ANY component of your professional services? YES NO Health Care Systems Committee

  12. “Employment”: More options than a paycheck Service line co-management, Joint ventures Medical directorship Physician Enterprise Model Affiliated Professional Entity Health Care Systems Committee

  13. Factors Driving Physiciansto Employment Models HOSPITALS Health Care Systems Committee

  14. How has employment evolved? Now • Acquisition as tool for care coordination, preparation for reimbursement change • Physicians in hospital leadership • Compensation incentive-based • Emerging physicians more interested in employment models 1990’s • Physician acquisition defensive strategy against reimbursement change • No physician involvement • Compensation on past performance • New physicians interested in private practice

  15. UNITED STATES HOUSE OF REPRESENTATIVESSUBCOMMITTEE TestimonyMark Smith, President Merritt HawkinsJuly 19, 2012 • Flat or declining reimbursement • Growing regulatory and administrative paperwork • Malpractice insurance costs • The implementation of information technology • The effects of health reform

  16. Factors Driving Physicians to Employment Models • Healthcare reform: • Move to integrated care systems (e.g. ACOs, PCMH) • Value-based reimbursement • Reporting requirements (PQRS) Health Care Systems Committee

  17. Factors Driving NEWPhysicians to Employment Models • Increasing burden of educational debt • Cultural change among graduating physicians Health Care Systems Committee

  18. HospitalFactors Driving Employment Models Challenges with ER coverage Potential for improvements in quality/cost control in era of value-based purchasing Hospital desire to control service lines Market domination Health Care Systems Committee

  19. Hospital Factors Driving Employment Models Health Care Systems Committee

  20. ARS: In your community, how do employment contracts compare to net income in private practice? Above anticipated private practice income About equal Below anticipate private practice income Don’t know. Health Care Systems Committee

  21. HospitalFactors Driving Employment Models

  22. AAOS Health Care Systems Committee (HCSC) 2010 Study of Hospital-Physician Alignment Health Care Systems Committee

  23. AAOS HCSC2010 Primer:Hospital Employment Health Care Systems Committee

  24. 2010 HCSC Study on Hospital-Physician Alignment • Electronic survey to 3500 random AAOS Fellows January 2010 • 119 emails returned, total 3381 “true” surveys distributed • 772 responded • Response rate 23% Health Care Systems Committee

  25. 2010 HCSC Study on Hospital-Physician Alignment • Employment trend recognized when collected in 2010 • Provides powerful comparison to data generated by 2012 study commissioned by the BOC SOS committee, presented next Health Care Systems Committee

  26. 2010 HCSC Study • Mean age of population invited: 51.25 • Mean age of respondents: 52.10 • Gender:

  27. Response by practice type2010 HCSC Survey

  28. Shift in Practice Type through Career2010 HCSC Survey Health Care Systes Committee

  29. 2010 HCSC Survey Results Trend of increase in employed positions from career start to time of survey • Vast majority (79%) still considering private practice for future • 72% had practiced in private setting at some point Health Care Systems Committee

  30. Which setting are you considering for the future?

  31. ARS: Are you considering an employment setting? • STRONGLY NO • NO • UNDECIDED • YES • STRONGLY YES Health Care Systems Committee

  32. Reasons for considering hospital employment2010 HCSC Survey

  33. “I became a hospital employee by. .“ (n=142)

  34. Problems encountered with Shift to Employment Model Factors leading AAOS fellows to leave a hospital employment setting: • Loss of control over staff, finances, contract negotiations, etc. (37%) • Change in terms after initial contract term (33%) • Lower compensation (28%) • Loss of autonomy (28%) Health Care Systems Committee

  35. What Does this Mean? • 2010 data indicate transition from private practice to employment was increasing • Numbers were still low Health Care Systems Committee

  36. What Does this Mean? Current trends: Transition to employed setting and Employment directly from training Health Care Systems Committee

  37. Is this the future of Orthopaedics? Possible shift to the dominant model as health care reform rolls out I anticipate & hope there will always remain a role for private practice Health Care Systems Committee

  38. Concerns with Rising Employment August, 2011: Rising Hospital Employment of Physicians: Better quality, higher costs? Health Care Systems Committee

  39. Is this the future of Orthopaedics? Hospitals may find acquiring physician practices & ASC’s less appealing: • MedPac recommendations to decrease E&M reimbursement • OIG 2013 plan to review payment disparity between ASC and HOPD rates Health Care Systems Committee

  40. MedPac Recommendation The Congress should direct the Secretary of Health and Human Services to reduce payment rates for evaluation and management office visits provided in hospital outpatient departmentsso that total payment rates for these visits are the same whether the service is provided in an outpatient department or a physician office. COMMISSIONER VOTES: YES 14 • NO 2 • NOT VOTING 1 • ABSENT 0

  41. Office Inspector General 2013 Plan Hospitals—Acquisitions of Ambulatory Surgical Centers: Impact on Medicare Spending “We will determine the extent to which hospitals acquire ASCs and convert them to hospital outpatient departments . . . also determine the effect of such acquisitions on Medicare payments and beneficiary cost sharing.“

  42. How do we respond to the trend? Changing definition of what it means to be an orthopaedic surgeon, or even a physician Health Care Systems Committee

  43. Employment Challenges: Culture • Issue for all hospital-physician alignment models • Changes in culture for both physicians and hospital • Generational culture changes Health Care Systems Committee

  44. Where do we go?AAOS, STATE SOCIETIES • Understand and embrace the employed surgeon sector as part of the AAOS • Address the particular practice needs and leadership training for the employed surgeon Health Care Systems Committee

  45. Where do we go?AAOS, STATE SOCIETIES Recognize lifestyle expectations of the next generation may require changing the structure of small practices to attract new partners Health Care Systems Committee

  46. Where do we go? STATE SOCIETIES Recognize & communicate: Legislation on patient issues affects all practice patterns, directly or indirectly Health Care Systems Committee

  47. Where do we go? Education of residents: Different practice options Understanding pros/cons Personal factors which can influence compatibility with practice types Relevance of advocacy to all practice types Health Care Systems Committee

  48. Is Employment the future of Orthopaedics? Employment will likely increase but not eliminate private practice Health reform will change all practices. Just don’t miss the boat. . . Health Care Systems Committee

  49. Health Care Systems Committee

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