Employed physicians and financial performance

Despite popular belief that hiring physicians has a negative impact on a hospital’s finances, the results of a new survey of 47 health systems show that a majority reported no change in financial performance because of employed physicians.

Of the health systems that responded to Modern Healthcare’s Hospital Systems Survey and hired physicians in 2017, 76% reported that doing so didn’t materially change their financial performance. Twenty-two percent reported that hiring physicians improved their finances, while less than 3% said their financial performance worsened.

The survey results are a stark contrast to an estimate by the Medical Group Management Association last year that a single employed physician results in a loss of $185,000 to hospital multispecialty physician groups annually because the physician’s compensation and other related expenses exceed the amounts he or she bills for. However, that estimate, as well as similar estimates from other industry groups, often fail to factor in ancillary services that add to the total revenue generated by employed physicians.   

Source: Modern Healthcare