Why physician employment is rapidly increasing

For better or worse, the number of physicians employed by hospitals or health systems is skyrocketing.  Depending on the culture of your organization, employed physicians may be welcomed as a valuable asset consisting of capable individuals able to help the medical staff carry out its board-delegated responsibilities, or they may be viewed with suspicion and mistrust by nonemployed physicians who now feel their chosen career path to be threatened and unsecure. There are several forces driving this change for physicians and hospitals. Some of the forces impacting physicians include the following:

• Declining physician incomes. Although this varies from one specialty to the next, there has been an overall pressure on physician income where revenues decrease or remain flat but work increases. Decline is a cause of worry and frustration. Increasing concern is voiced about disparities within specialty. The regulation and documentation required for payment is sucking the joy out of medicine for many. Combine that with the uncertainty of what will occur with physician reimbursement as accountable care organizations, bundled payments, and other experiments in reimbursement take place. It is not surprising that many seasoned practitioners are lured by the stability of a biweekly paycheck as opposed to the vagaries of reimbursement that they cannot influence or control.
• Private practice in distress. For many practices, the reality is that revenue is not keeping pace with expenses. In many cases, revenue is flat or decreased, and expenses are  increasing, making some wonder whether the practice is sustainable. Add to that the demands for information technology, the difficulty of recruiting and retaining younger physicians, the move to fee-for-value reimbursement, increased liability and practice management headaches—and many physicians are saying, “Enough!“
• Physician demographics. Currently, four generations are practicing medicine simultaneously, and soon a fifth will join them. Older practitioners are looking for an exit strategy. Younger practitioners saddled with debt are looking for both job security and work–life balance. Put it all together, and what we are witnessing should come as little surprise.

Source: The Medical Staff Leader's Practical Guide: Survival Tips For Navigating Your Leadership Role