More Physicians Choosing Hospital Employment over Private Practice

[Gfunk6]

I just saw this very interesting article on Medscape. Registration is free to read the article.

Rad Onc is not mentioned specifically as I'm sure the # of MDs is very small. However, it is interesting to see where the trends are going nationally.

Here are some choice quotes:

Within 2 years, more than 75% of newly hired physicians will be hospital employees, according to projections in a new report of physician recruiting incentives.

"Sixty-three percent of Merritt Hawkins' search assignments in 2011/12 featured hospital employment of the physician, up from 56 percent the previous year and only 11 percent eight years ago," the report states.

"Fewer doctors want to go into independent private practice," Phillip Miller, vice president of communications for Merritt Hawkins, told Medscape Medical News. "That's been a major trend over the past few years. The whole medical profession is shifting away from private practice to employment."

Demand for radiologists and anesthesiologists has decreased. Radiology, which was Merritt Hawkins' most requested specialty in 2003, ranked only 18th in 2011–2012. For the first time since the firm began compiling data, anesthesiology was not among its 20 most-requested search assignments.

"Anesthesiology is one of the few areas in medicine where allied health professionals, in this case certified registered nurse anesthetists, are replacing physicians," said Miller. "More states are allowing them to work unsupervised. Anesthesiology still attracts medical graduates and income is still attractive. But with the slumping economy, there are fewer elective procedures and that's having an impact.

"Radiologists also are affected by the economy," he adds. "As people put things off, there's less utilization. And compensation for radiologists has been cut by Medicare."

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[medgator]

There's been a definite trend the last few years. I came across an article back in 2010 in the WSJ discussing it. Will be interesting to see how it impacts rad onc going forward.

When the Doctor Has a Boss
(November 2010)

The traditional model of doctors hanging up their own shingles is fading fast, as more go to work directly for hospitals that are building themselves into consolidated health-care providers.

The latest sign of the continued shift comes from a large Medical Group Management Association survey, which found that the share of responding practices that were hospital-owned last year hit 55%, up from 50% in 2008 and around 30% five years earlier.

The biggest U.S. physician-recruiting firm, Merritt Hawkins, a unit of AMN Healthcare Inc., said the share of its doctor searches that were for positions with hospitals hit 51% for the 12 months ended in March, up from 45% a year earlier and 19% five years ago. The number of searches for physician groups and partnerships has dropped.

The trend is tied to the needs of both doctors and hospitals, as well as to emerging changes in how insurers and government programs pay for care. Many doctors have become frustrated with the duties involved in practice ownership, including wrangling with insurers, dunning patients for their out-of-pocket fees and acquiring new technology. Some young physicians are choosing to avoid such issues altogether and seeking the sometimes more regular hours of salaried positions.

 

[DrAwsome]

There's been a definite trend the last few years. I came across an article back in 2010 in the WSJ discussing it. Will be interesting to see how it impacts rad onc going forward.

When the Doctor Has a Boss
(November 2010)

Interesting, and from the job ads I've seen, coincides with them being mostly hospital based employee positions.

 

[Gfunk6]

In California, it is illegal for hospitals to directly employ physicians. Instead, there is a workaround where physicians join "Foundations" which are essentially hospital-funded. For instance, physicians who work at Kaiser in California are not technically employees, but rather part of the Permanente Group.

 

[medgator]

In California, it is illegal for hospitals to directly employ physicians. Instead, there is a workaround where physicians join "Foundations" which are essentially hospital-funded. For instance, physicians who work at Kaiser in California are not technically employees, but rather part of the Permanente Group.

What are the implications of that? Has the workaround essentially killed any benefit to that law (if there was a benefit in the first place).

 

[Gfunk6]

What are the implications of that? Has the workaround essentially killed any benefit to that law (if there was a benefit in the first place).

It's kind of like the Stark law which makes sense on paper but was essentially made irrelevant by the exceptions and loopholes.

Since the Foundations are directly funded by the hospital, the hospitals have a lot of power over the Foundation physicians. Perhaps this is marginally better than direct physician employment, but not by much. In Northern California, hospitals initially only accepted primary care physicians into their foundations to "control" patient flow. However, there is now an acceleration of various specialists entering foundations as well.

 

[SneakyBooger]

Same thing happened in the 90's.

Government preferentially paid hospitals more, MD's less, MD's became employees. The system eventually buckled under the weight of the hospital's over-bloated administrative system.

 

[medgator]

Same thing happened in the 90's.

Government preferentially paid hospitals more, MD's less, MD's became employees. The system eventually buckled under the weight of the hospital's over-bloated administrative system.

That concern is also alluded to in the WSJ article in my post above:

The consolidation wave is raising red flags among some regulators, researchers and health insurers, who warn that bigger health systems can use their leverage to push for higher rates. "We've always been concerned about combinations that are being done to increase prices," said Karen Ignagni, chief executive of America's Health Insurance Plans.

 

[medgator]

Health-care law driving doctors away from small practices, toward hospital employment

The health-care reform law is accelerating a shift away from private practices as doctors, fearful of new costs and regulations, "run for cover" under the protection of large hospitals.

During a hearing before the House Small Business Committee on Thursday, health-care professionals explained that the shift has already been picking up momentum in recent years, driven largely by growing regulatory and administrative burdens, rising malpractice costs and declining reimbursements from insurers — all of which they say have hit small practices especially hard. Consequently, doctors are shying away from the traditional solo practitioner model in favor of employment at large hospitals, which amid constant industry changes, can provide more financial security and take responsibility for keeping up with new regulations.

"The classic model of independent, small physician practice still exists today, but it's rapidly becoming a relic of a bygone era," Smith said during his testimony. "This model is only likely to persist in any numbers in smaller, rural areas where there are few physicians; and even here, physicians will likely need to partner or affiliate with larger entities in some way."

Now there's an additional catalyst physicians say may expedite the decline of small practices — the Patient Protection and Affordable Care Act, passed in 2010 and recently approved by the Supreme Court.

For starters, PPACA made Accountable Care Organizations — referring to groups of providers that take responsibility for the care for an entire patient group — an official part of the Medicare program this year, giving hospitals added incentive to scoop up physician partners.

"There is no question that it has accelerated that process," Smith said, referring to the health-care reform law. "Physicians are running for cover because of the intensity of the penalties within the new system. There is so much more regulation, and the penalties are so great, physicians are very fearful that they'll make an honest mistake and be held financially accountable."

 

[Gfunk6]

When private practices are absorbed by hospitals the cost to medical insurance skyrockets. Outpatient procedures done at a hospital outpatient center can be literally twice as expensive as free-standing cancer centers.

Is the work different in any way? No. Are the physicians different? No.

However, the insurance provider pays more and the patient pays more deductible.

Here's the article from today's Wall Street Journal.

 

[medgator]

When private practices are absorbed by hospitals the cost to medical insurance skyrockets. Outpatient procedures done at a hospital outpatient center can be literally twice as expensive as free-standing cancer centers.

Is the work different in any way? No. Are the physicians different? No.

However, the insurance provider pays more and the patient pays more deductible.

Here's the article from today's Wall Street Journal.

This is definitely true in Rad Onc as well. There are substantial differences in technical reimbursement for hospital vs free-standing center treatments. Patients and Insurance companies aren't content to sit by and just watch though, as the last article in the paragraph mentions:

Insurers also say they are trying to warn consumers what they will pay for treatment.

Dr. Hubbard, the Reno heart patient, who was included in a local newspaper article focused on the higher prices, said that when he needed another echocardiogram early this year, he sought out an independent imaging center that performed the procedure at the insurer's rate of $265.31, far less than the earlier test.

 

[deleted126335]

1. ASCs, freestanding treatment centers have been skimming the cream from hospitals and eating their lunch.
2. The gummit and the payors want to write fewer checks. Pesumably, the hospital which is supposed to have the best interests of the community in mind will get most of the dollars and most effectively decide how to allocate them.

That's the argument anyway.

Of course this will lead to bloated, inefficient and wasteful organizations. But it is the way that we are going.

 

[Gfunk6]

1. ASCs, freestanding treatment centers have been skimming the cream from hospitals and eating their lunch.
2. The gummit and the payors want to write fewer checks. Pesumably, the hospital which is supposed to have the best interests of the community in mind will get most of the dollars and most effectively decide how to allocate them.

That's the argument anyway.

Of course this will lead to bloated, inefficient and wasteful organizations. But it is the way that we are going.

Excellent points and caveats. I think this really illustrates how complex the whole health-care debate is and why, in the end, everyone is simply out for themselves (and their specialty.)

 

[DrAwsome]

Excellent points and caveats. I think this really illustrates how complex the whole health-care debate is and why, in the end, everyone is simply out for themselves (and their specialty.)

Since you guys are discussing pp vs. hospital employment, I am wondering the following. Why are there certain specialties where pp/partnership seem to be so profitable, vs. others where partnership is not nearly as popular? I don't see ads for things like neurology/pmr/medicine/FM where partnership is discussed. Is it just not as common in certain specialties or what?

 

[DoctwoB]

Since you guys are discussing pp vs. hospital employment, I am wondering the following. Why are there certain specialties where pp/partnership seem to be so profitable, vs. others where partnership is not nearly as popular? I don't see ads for things like neurology/pmr/medicine/FM where partnership is discussed. Is it just not as common in certain specialties or what?

Think its a couple things. First off those specialties tend to be much less capital heavy. Partnership becomes much more important when looking at collecting shares of technical fees or where ownership of expensive tech (e.g. linacs) is involved. This is a major reason why docs in pp can earn more, as technical fees are often much greater outstrip professional fees.

Secondly, for primary care docs or "gateway" specialties, employment often makes more sense. Hospitals love to employ pcps as those same PCPs direct their referrals, imaging, and tests to their employing hospital, which is a big moneymaker. This allows the hospital to subsidize the pcp salary, making employment often more attractive then private practice. Essentially the hospital is "paying" for referrals, but it would be illegal for that same pcp in private practice to "sell" his referrals to the hospital.

 

[subatomicdoc]

When private practices are absorbed by hospitals the cost to medical insurance skyrockets. Outpatient procedures done at a hospital outpatient center can be literally twice as expensive as free-standing cancer centers.

Interesting. Sound like my practice is an anomaly but a lower cost one.

 

[DrAwsome]

Think its a couple things. First off those specialties tend to be much less capital heavy. Partnership becomes much more important when looking at collecting shares of technical fees or where ownership of expensive tech (e.g. linacs) is involved. This is a major reason why docs in pp can earn more, as technical fees are often much greater outstrip professional fees.

Secondly, for primary care docs or "gateway" specialties, employment often makes more sense. Hospitals love to employ pcps as those same PCPs direct their referrals, imaging, and tests to their employing hospital, which is a big moneymaker. This allows the hospital to subsidize the pcp salary, making employment often more attractive then private practice. Essentially the hospital is "paying" for referrals, but it would be illegal for that same pcp in private practice to "sell" his referrals to the hospital.

I guess I am still kind of confused. What about things like anesthesia where they don't really own any equipment? How are those guys in pp? And for things like rad onc/rads/urology, the private group owns the equipment and therefore they get to charge a technical fee or whatever it is given taht they own the equipment? Is that how it works?

 

[DoctwoB]

I guess I am still kind of confused. What about things like anesthesia where they don't really own any equipment? How are those guys in pp? And for things like rad onc/rads/urology, the private group owns the equipment and therefore they get to charge a technical fee or whatever it is given taht they own the equipment? Is that how it works?

Anesthesia and EM (or hospitalist groups) are somewhat interesting in that a large part of a group's value comes from the contracts they hold with hospitals. They form private groups which then contract with hospitals to provide their services at a given rate. Say a large group has a lucrative contract with local hospitals in a relatively desirable area. Any newcomer into the group reaps the benefits of said contract which is very valuable and allows the new doc to earn more then they would have had they started on their own. By "buying in" to the group, they are essentially buying into that contract. This is relatively risky though as groups can lose contracts, making the value of what you're buying into much lower.

For rad onc/urology, you're right in that if the group owns the equipment, they can bill for the lucrative technical fees. There are legal and ethical issues involved in self referral, but there are exceptions for offering in-office ancillary services, like a urology practice that owns an IMRT machine and employs a rad-onc to run them.

 

[medgator]

What the trend towards physician employment is creating in one small town (and across the country). Not specifically mentioning rad onc, but the trends are still interesting.

http://www.nytimes.com/2012/12/01/b...htening-bind-for-doctors-nationwide.html?_r=0

An array of new economic realities, from reduced Medicare reimbursements to higher technology costs, is driving consolidation in health care and transforming the practice of medicine in Boise and other communities large and small. In one manifestation of the trend, hospitals, private equity firms and even health insurance companies are acquiring physician practices at a rapid rate.

Today, about 39 percent of doctors nationwide are independent, down from 57 percent in 2000, according to estimates by Accenture, a consulting firm.

The recent trend is reminiscent of the consolidation that swept the industry in the 1990s in response to the creation of health maintenance organizations, or H.M.O.'s — but there is one major difference. Then, hospitals had difficulty managing the practices, contending that doctors did not work as hard when they were employees as they had as private operators. Now, hospitals are writing contracts more in their own favor.

"Hospitals are constructing compensation in ways that are based on productivity and performance," said Steve Messinger, president of ECG Management Consultants, which advises on physician acquisitions.

But the consolidation of health care may be coming at a hefty price. By one estimate, under its current reimbursement system, Medicare is paying in excess of a billion dollars a year more for the same services because hospitals, citing higher overall costs, can charge more when the doctors work for them. Laser eye surgery, for example, can cost $738 when performed by a hospital-employed doctor, compared with $389 when done by an unaffiliated doctor, according to national estimates by the independent Congressional panel that oversees Medicare. An echocardiogram can cost about twice as much in a hospital: $319, versus $143 in a doctor's office.

Doctors at numerous hospitals said it was often difficult to criticize the policies instituted by hospitals or investor-owned physician groups because, as employees, they could easily be fired.

In Boise, doctors are pressured to refer only within their own system, according to St. Alphonsus in its complaint. It reported a 90 percent drop in admissions to its hospitals by physicians employed by St. Luke's. In one community, independent doctors often send patients 40 miles away for CT scans because prices at St. Luke's are 60 percent higher, the complaint said.

 

[medgator]

Interesting developments.... hopefully this actually trickles into the real world

http://www.nytimes.com/2013/06/15/h...or-services-doctors-offer-for-less.html?_r=1&

Medicare Panel Urges Cuts to Hospital Payments for Services Doctors Offer for Less


A federal advisory panel said Friday that Congress should move immediately to cut payments to hospitals for many services that can be provided at much lower cost in doctors’ offices.

The Medicare Payment Advisory Commission said the current payment disparities had created incentives for hospitals to buy physician practices, driving up costs for the Medicare program and for beneficiaries. Hospital buyouts of doctors, turning independent practitioners into hospital employees, have also led to higher spending by private insurers and higher co-payments for their policyholders, the commission said.

Medicare uses different fee schedules and formulas to pay for services provided in doctors’ offices and in hospital clinics.

“In many cases, a physician’s practice that is purchased by a hospital stays in the same location and treats the same patients,” but “Medicare and beneficiaries pay more for the same services,” the 17-member commission said in a report to Congress.

For example, it said, Medicare pays $58 for a 15-minute visit to a doctor’s office and 70 percent more — $98.70 — for the same consultation in the outpatient department of a hospital. The patient also pays more: $24.68, rather than $14.50.

Likewise, the commission said, when a Medicare beneficiary receives a certain type of echocardiogram in a doctor’s office, the government and the patient together pay a total of $188. They pay more than twice as much — $452 — for the same test in the outpatient department of a hospital. (The test is used to evaluate the functioning of the heart.) The commission urged Congress to “equalize payment rates” or at least reduce the disparities, for doctor’s office visits and hospital clinic visits in which similar patients receive the same or similar services.

From 2010 to 2011, the commission said, the number of echocardiograms provided to Medicare beneficiaries in doctors’ offices declined by 6 percent, but the number in hospital outpatient clinics increased by nearly 18 percent.

 

[thesauce]

Interesting developments.... hopefully this actually trickles into the real world

http://www.nytimes.com/2013/06/15/h...or-services-doctors-offer-for-less.html?_r=1&

Why exactly would we want this? I agree that equalizing reimbursment between the two settings is good, but not through further cuts. It seems like all that accomplishes is hurting the salaries of hospital employed physicians. Is there an upside that I'm not seeing?

 

[stems]

Why exactly would we want this? I agree that equalizing reimbursment between the two settings is good, but not through further cuts. It seems like all that accomplishes is hurting the salaries of hospital employed physicians. Is there an upside that I'm not seeing?

Exactly we DO NOT want this as most radoncs are hospital based. I'm guessing the fellow who wants this is in private practice and would rather have the whole ship sink rather than see his lifeboat sink alone. And don't you worry, hospitals have a much bigger lobbying power to prevent this.

 

[medgator]

Why exactly would we want this? I agree that equalizing reimbursment between the two settings is good, but not through further cuts. It seems like all that accomplishes is hurting the salaries of hospital employed physicians. Is there an upside that I'm not seeing?

Exactly we DO NOT want this as most radoncs are hospital based. I'm guessing the fellow who wants this is in private practice and would rather have the whole ship sink rather than see his lifeboat sink alone. And don't you worry, hospitals have a much bigger lobbying power to prevent this.

As it stands right now, freestanding centers get reimbursed less for the exact same services. In addition, they cannot treat inpatients without the hospital taking the hit on DRG funding. This often leads to certain hospitals refusing to contract with freestanding centers if they don't have their own departments.

Now is that fair? I think the tables should be even, not lopsided in favor of the hospital. And this doesn't just apply to rad onc. It's well-documented that hospital purchasing and ownership of competing physician practices leads to higher healthcare costs and less choice for patients in a given community. I think hospital-based centers and free-standing centers should be reimbursed the same..... if that leads to a decrease for hospitals and increase for free-standing centers, so be it. Let them meet in the middle.

 

[thesauce]

As it stands right now, freestanding centers get reimbursed less for the exact same services. In addition, they cannot treat inpatients without the hospital taking the hit on DRG funding.

Now is that fair? I think the tables should be even, not lopsided in favor of the hospital. And this doesn't just apply to rad onc. It's well-documented that hospital purchasing and ownership of competing physician practices leads to higher healthcare costs and less choice for patients.

Of course not, but the solution isn't to throw our hospital-employed colleagues under the bus. Who does that help? It isn't as if you gain something as a result. I can see no benefit unless it helps you sleep better at night knowing that salaries are dropping for others.

 

[medgator]

Of course not, but the solution isn't to throw our hospital-employed colleagues under the bus. Who does that help? It isn't as if you gain something as a result. I can see no benefit unless it helps you sleep better at night knowing that salaries are dropping for others.

I agree and I wouldn't just advocate for hospitals to lose on the reimbursement side. I think the best solution would be the increase reimbursement at freestanding centers and decrease it at hospitals so they meet in the middle. Take it off the technical revenue. It shouldn't hurt the hospital-guys too much since most of them are professional only or employed. You can apply to any other number of fields and procedures as well. Why should an echocardiogram reimburse double because a hospital just bought the cardiologists' practice?

Going forward a specialty, we should want this. Make the freestanding concept strong again so we don't end up with a bunch of hospital-based centers one day.

 

[Tanner]

Originally Posted by thesauce
Why exactly would we want this? I agree that equalizing reimbursment between the two settings is good, but not through further cuts. It seems like all that accomplishes is hurting the salaries of hospital employed physicians. Is there an upside that I'm not seeing?

Originally Posted by stems
Exactly we DO NOT want this as most radoncs are hospital based. I'm guessing the fellow who wants this is in private practice and would rather have the whole ship sink rather than see his lifeboat sink alone. And don't you worry, hospitals have a much bigger lobbying power to prevent this.
.

I think once you've matriculated out of residency and into the profession you will look past the numbers and see something more important. This is not hospital vs. free-standing; it is employment vs. independence. Once you are employed by a hospital or a health system, you will likely find yourself in a position where you lose your professional autonomy. You risk not being able to do what you think is best for your patients as your performance and clinical judgement may now be based on a matrix set by administrators. You may have your salary cut, or you may even be fired, by hospital administrators regardless of how "good" your are. You may be pressured to over- or even under treat your patients.

I wonder why you would be worried about how much more a hospital can make if you are an employed, salaried physician. Radiation oncology global reimbursement still carries over 40% margins, since your salary will be roughly stable (even with "productivity" bonus), the money you are defending goes to the hospital. There are so much bigger issues at stake beside what the hospital makes....

You speak with pride of hospitals (and health systems) having a much bigger lobbying power, and while that is quite true, you should realize you are cheering on the biggest bully of physicians and surgeons. Unless you have yearnings to be part of the bullying process as an administrator, you are cheering for the wrong team.

 

[Gfunk6]

This is not hospital vs. free-standing; it is employment vs. independence. .

Bravo, could not have set it better myself. A (long) time ago, the only 'employed' Radiation Oncologsits were located in academic medical centers. The thinking went that the noble among us chose academics for a slightly reduced salary to advance the profession in a significant way through research and/or teaching. My my, how those times have changed today!

Nowadays, graduating MDs are by-and-large lazy. There, I said it. It's all about, 'how can I work 4 days per week', 'how much vacation do I get,' 'how do I minimize my call,' and 'how much salary I will make out of residency.' Even the term salary implies a subservient relationship to some administrator. Part of the problem is being entitled and spoiled is par for the course for Gen X and Gen Y. Sure you may see yourself as privileged that you earn $400k per year and you may laugh at Joe Schmo Rad Onc who took $180k per year on a partnership track position.

But in a few years, guess what? You'll be earning the same/less in your vaunted hospital and talking to an administrator/RN who is your boss trying to explain why you are screwing up the hospital's Press-Ganey score, why can't you generate more RVUs, and I'm sorry that you hate the new therapists and physicist but we pay them 15% less then the guys you liked. Pretty soon, they'll be asking you for a pay cut to some other Rad Onc who is willing to work for 10% less.

Private practice is not all sunshine and roses and there is often risk involved, but you are the master of your own fate. You can choose to pay good employees higher wages, you can choose when/how to upgrade your machine, you can choose to employ people on a 'mommy/daddy track' or 'senior track,' etc. etc. You are independent from administrators growing fat off of your work who contribute virtually nothing to your success.

This may sound idealistic and it is, but the concept emphasized is solid. As more and more people head down the employed route at non-academic centers we as a profession (and indeed all of medicine) will be worse off for it, not to mention that our patients and patient care will be worse off. You have been warned.

 

[stems]

I think once you've matriculated out of residency and into the profession you will look past the numbers and see something more important. This is not hospital vs. free-standing; it is employment vs. independence. Once you are employed by a hospital or a health system, you will likely find yourself in a position where you lose your professional autonomy. You risk not being able to do what you think is best for your patients as your performance and clinical judgement may now be based on a matrix set by administrators. You may have your salary cut, or you may even be fired, by hospital administrators regardless of how "good" your are. You may be pressured to over- or even under treat your patients.

I wonder why you would be worried about how much more a hospital can make if you are an employed, salaried physician. Radiation oncology global reimbursement still carries over 40% margins, since your salary will be roughly stable (even with "productivity" bonus), the money you are defending goes to the hospital. There are so much bigger issues at stake beside what the hospital makes....

You speak with pride of hospitals (and health systems) having a much bigger lobbying power, and while that is quite true, you should realize you are cheering on the biggest bully of physicians and surgeons. Unless you have yearnings to be part of the bullying process as an administrator, you are cheering for the wrong team.

Bravo, could not have set it better myself. A (long) time ago, the only 'employed' Radiation Oncologsits were located in academic medical centers. The thinking went that the noble among us chose academics for a slightly reduced salary to advance the profession in a significant way through research and/or teaching. My my, how those times have changed today!

Nowadays, graduating MDs are by-and-large lazy. There, I said it. It's all about, 'how can I work 4 days per week', 'how much vacation do I get,' 'how do I minimize my call,' and 'how much salary I will make out of residency.' Even the term salary implies a subservient relationship to some administrator. Part of the problem is being entitled and spoiled is par for the course for Gen X and Gen Y. Sure you may see yourself as privileged that you earn $400k per year and you may laugh at Joe Schmo Rad Onc who took $180k per year on a partnership track position.

But in a few years, guess what? You'll be earning the same/less in your vaunted hospital and talking to an administrator/RN who is your boss trying to explain why you are screwing up the hospital's Press-Ganey score, why can't you generate more RVUs, and I'm sorry that you hate the new therapists and physicist but we pay them 15% less then the guys you liked. Pretty soon, they'll be asking you for a pay cut to some other Rad Onc who is willing to work for 10% less.

Private practice is not all sunshine and roses and there is often risk involved, but you are the master of your own fate. You can choose to pay good employees higher wages, you can choose when/how to upgrade your machine, you can choose to employ people on a 'mommy/daddy track' or 'senior track,' etc. etc. You are independent from administrators growing fat off of your work who contribute virtually nothing to your success.

This may sound idealistic and it is, but the concept emphasized is solid. As more and more people head down the employed route at non-academic centers we as a profession (and indeed all of medicine) will be worse off for it, not to mention that our patients and patient care will be worse off. You have been warned.

Yes, and we all know CMS has a reputation of raising the reimbursements of one group to equal the other and not lowering both if they had the chance

And fyi the administrators will lower your income if you're bringing in less money.

 

[medgator]

Yes, and we all know CMS has a reputation of raising the reimbursements of one group to equal the other and not lowering both if they had the chance

Seen the reimbursement headlines for primary care lately? At a time of cuts to rad onc, rads and cards among other specialities, they are getting a boost.

http://www.hhs.gov/news/press/2012pres/05/20120509b.html

http://www.upi.com/Health_News/2012...tors-to-get-more-Medicare/UPI-63541352201612/

 

[seper]

I take issue with often cited demands for "professional autonomy". Quality of patient care in our field would increase immensely if RadOnc's would start adhere to simple guidelines, like say anesthesiology does.

 

[deleted4401]

It's a noble gesture and the right thing to do to equalize the payments, but I don't trust the feds on this. I doubt they'll meet in the middle. They will just lower the higher rates. The divisions also aren't as straightforward. Some people contract with hospitals and get a professional fee, and aren't employed. Other groups have both freestanding and hospital based centers, and the greater revenue from one or the other helps subsidizes the practice during leaner times. There are many different types of approaches. Gotta protect everything, man. The feds won't redistribute it. They'll just make the pot smaller. That is how they roll.

 

[MOHS_01]

Interesting developments.... hopefully this actually trickles into the real world

http://www.nytimes.com/2013/06/15/h...or-services-doctors-offer-for-less.html?_r=1&

Not really sure if we want to pull for this race to the bottom... perilous path, at best.

 

[MOHS_01]

It's a noble gesture and the right thing to do to equalize the payments, but I don't trust the feds on this. I doubt they'll meet in the middle. They will just lower the higher rates. The divisions also aren't as straightforward. Some people contract with hospitals and get a professional fee, and aren't employed. Other groups have both freestanding and hospital based centers, and the greater revenue from one or the other helps subsidizes the practice during leaner times. There are many different types of approaches. Gotta protect everything, man. The feds won't redistribute it. They'll just make the pot smaller. That is how they roll.

This.

Reminds me of a class action suit some years ago involving several health plans and payment discrepancies for like codes depending upon the designated specialty of the rendering physician. At the time, specialists received a premium for E&M codes; the court ruled in favor of the plaintiffs (primary care MD's) and ordered non-discriminatory pricing. Guess what happened next? Specialists were taken down the primary care rates. The plaintiffs claimed victory. Good deal.

 

[medgator]

perilous path, at best.

That's pretty much what any non-hospital owned, freestanding practice (not just in radiation oncology) is looking at now. Why do you think there has been such a trend towards physician employment and practice ownership by hospitals? Hospitals get premium pricing for doing the exact same thing over a freestanding center.

 

[Tanner]

Yes, and we all know CMS has a reputation of raising the reimbursements of one group to equal the other and not lowering both if they had the chance

And fyi the administrators will lower your income if you're bringing in less money.

Since some here are just stuck on the numbers, I'll play this game, as I'm getting a sense that there is a misunderstanding of the numbers. Some of you equate what is paid to the hospital directly to what you will professionally earn. That is not typically the case. In general, the fees associated with an MD's professional service is roughly the same whether in the hospital or in a freestanding center. The extra juice that the hospital gets is in the technical and the ambulatory payment classification (APC) payment rate. Unless you and your practice has a PSA that includes some percentage take on the global collection, your professional service fee is not affected, as any "equalization" will not affect professional component. I would venture that any equalization will never go down to free-standing center level because APC is formulated to account for ancillary services such as staffing, supplies, etc (which, by the way, is not accounted in a freestanding center, though it should be).

If you are just salaried, it doesn't matter and most likely, the total profession fees collected from your service, which now goes to the hospital, is likely more than what the hospital is paying you, so the hospital and health system is skimming off what you would have taken if you billed yourself.

They don't teach this to you in residency, so don't take it personally when I say you are naive. I certainly was, too!

 

[Tanner]

Exactly we DO NOT want this as most radoncs are hospital based. I'm guessing the fellow who wants this is in private practice and would rather have the whole ship sink rather than see his lifeboat sink alone. And don't you worry, hospitals have a much bigger lobbying power to prevent this.

Here is another "numbers" info for you: Hospitals can set up a freestanding center, exactly the same as any independent freestanding center, BUT bill hospital-based rates as long as they are within 30 miles from the main hospital treatment center.

Answer this honestly: did you know that? and is that fair for patients? You can keep cheering for your hospital lobbying power, but please answer honestly.

 

[Gfunk6]

Here is another "numbers" info for you: Hospitals can set up a freestanding center, exactly the same as any independent freestanding center, BUT bill hospital-based rates as long as they are within 30 miles from the main hospital treatment center.

Answer this honestly: did you know that? and is that fair for patients? You can keep cheering for your hospital lobbying power, but please answer honestly.

Well, the "hospital" free-standing center must be OSHPD compliant. That means they have copper pipes and doors that are ADA compliant vs. the physician-owned freestanding center who can use PVC pipes and narrower doors. Surely that is worth the extra money that a "hospital" free-standing center would get??

They don't teach this to you in residency, so don't take it personally when I say you are naive. I certainly was, too!

Very true. Once you get out of the academic bubble for a couple of years, you will learn how the real world works. Two years ago, I was stupidly ignorant in these matters.

 

[Tanner]

Is it fair that we have more free standing centers where physicians have a stake in the technical component prescribing 40 Gy in 20 fractions for bone mets, whole brain 40/20, or prostate 37.5/5 without real evidence supporting it? I dont know the answer but I think if you talk fairness you walk a slippery slope.

That is more of an individual physician behavior and occurs in both free standing and hospital settings. You will have those behavior, which I do not condone, regardless of how much the reimbursement rate is. That has no significant relationship to the existing issue of "misdistribution" (in honor of your paper) numbers between payments to true free-standing centers and hospital-owned centers voiced by certain people here.

Poor try in attempting to deflect the question

 

[deleted4401]

I'm in freestanding centers and I have to say, we don't play that game. We have a lot of people currently getting 42.56 Gy/16 fx for breast, 20 Gy in 5 for bone mets. For early stage larynx, we do the 63/28 fx (even though NCCN says 66/33 fx is allowable). We don't boost every breast. We do BID for SCLC. So, I don't think it's as easy to say that freestanding does this or hospital does that. We're stopping at 60 Gy for lung. We no charge a lot of patients. So, I think it to do more with individual behavior, although, yeah, there may be some tendencies seen ...

Btw, for prostate, it's the other way. The total reimbursement for 5 fraction SBRT is far lower than 43 fraction IMRT with IGRT. Like half as much maybe. So, if free standing are doing it, they are not making more money off of it, plus they are making way less money than a hospital with Cyber (b/c of the the difference we've been talking about). Maybe more per fraction, but in aggregate less. Have your billing team price it out. It's not financially astute to offer it, IMO, especially since not on the NCCN recommendations yet.

The People's Republic of Maryland actually has been one of the few states to keep costs down using some pretty stronghanded manuevers. http://www.washingtonpost.com/blogs...ls-prices-now-it-wants-to-cap-their-spending/

Our outpatient vs freestanding facility costs actually are not that disparate, but basically it has led to very few freestanding facilities doing SBRT (probably a good thing).

 

[medgator]

I'm in freestanding centers and I have to say, we don't play that game. We have a lot of people currently getting 42.56 Gy/16 fx for breast, 20 Gy in 5 for bone mets. For early stage larynx, we do the 63/28 fx (even though NCCN says 66/33 fx is allowable). We don't boost every breast. We do BID for SCLC. So, I don't think it's as easy to say that freestanding does this or hospital does that. We're stopping at 60 Gy for lung. We no charge a lot of patients. So, I think it to do more with individual behavior, although, yeah, there may be some tendencies seen ...

Btw, for prostate, it's the other way. The total reimbursement for 5 fraction SBRT is far lower than 43 fraction IMRT with IGRT. Like half as much maybe. So, if free standing are doing it, they are not making more money off of it, plus they are making way less money than a hospital with Cyber (b/c of the the difference we've been talking about). Maybe more per fraction, but in aggregate less. Have your billing team price it out. It's not financially astute to offer it, IMO, especially since not on the NCCN recommendations yet.
.

Assuming you get paid for doing ck for prostate. Some insurances consider it experimental and won't pay at all. And yes it definitely pays less than conventional 43-44 fx imrt with image guidance.

Breast brachy ends up being better for the surgeon putting the device in and less for the center compared to conventional whole breast with a boost

 

[stems]

Here is another "numbers" info for you: Hospitals can set up a freestanding center, exactly the same as any independent freestanding center, BUT bill hospital-based rates as long as they are within 30 miles from the main hospital treatment center.

Answer this honestly: did you know that? and is that fair for patients? You can keep cheering for your hospital lobbying power, but please answer honestly.

Yes I did know that. Also hospitals do look at their bottom lines when they're negotiating salaries with physicians. If the physician fees don't cover the physician salaries, their salary gets cut or they don't get hired. Did you know that?

But the most important point that half of this board foolishly doesn't seem to realize or selfishly realizes but ignores, is that all this bill will do is cut the hospital based physicians salaries. It won't do a darn to increase the payments for free-standing centers. And considering most radoncs and new jobs are hospital based, stop being foolish/selfish; and yes I will continue to cheer hospital lobbyists.

 

[Tanner]

Yes I did know that. Also hospitals do look at their bottom lines when they're negotiating salaries with physicians. If the PO fees don't cover the physician salaries, their salary gets dropped or they don't get hired. Did you know that?

But the most important point that half of this board foolishly doesn't seem to realize or selfishly realizes but ignores, is that all this bill will do is cut the hospital based physicians salaries. It won't do a darn to increase the payments for free-standing centers. And considering most radoncs and new jobs are hospital based, stop being foolish/selfish; and yes I will continue to cheer hospital lobbyists.

Thank you for validating what I originally stressed: This is an employment vs. independence issue. All the concerns you've voiced is about lack of control- income, job security,etc. That is just a small part of what happens when you cede control and become employed. Hospitals and health systems are gaining more control of radiation oncology services every year. On top of that, they are given a subsidy in the form of hospital-based higher rates, so you are just adding octane boost to that machine. And you are gleefully cheering them on. Ever wonder why you are seeing more and more employment-based opportunities?? Take a moment and think about that.

You seem to be stuck on your entitled $$$. That's fine, it is a reality we all accept. But if you have more independence and control, you also would not be worrying about what someone else pays you. As I said before, profession service fees are roughly the same whether it is in a freestanding or hospital-based setting and the difference is the extra APC code and technical fees. And professional fees account for roughly 18% of this global take. Even at this stage, it is not hard to earn $250K+ on professional service alone, even at non hospital-based rate. Radiation Oncology remains one of this biggest cash cows for hospitals. Believe me, if they cannot get a positive earning, then they either are being mismanaged or not getting enough referrals and should not be running a department in the first place, or they are blatantly lying to you about their finances, which by the way, if you are an employed physician, you will rarely and likely never see the financials. So I am now dumbfounded why you still believe any equalization will lower your salary.

 

[Tanner]

Interested to hear views regarding this likely scenario: Case rate for radiotherapy- it will come, believe me. They will give you a lump sum and you can do whatever you want with it- 3D/IMRT/SBRT/Brachy, hypofractionation/standard fractionation etc.

In that setting then, do you or do you not support equal payment regardless if you are free standing or hospital-owned?

 

[medgator]

But the most important point that half of this board foolishly doesn't seem to realize or selfishly realizes but ignores, is that all this bill will do is cut the hospital based physicians salaries. It won't do a darn to increase the payments for free-standing centers. And considering most radoncs and new jobs are hospital based, stop being foolish/selfish; and yes I will continue to cheer hospital lobbyists.

False, unless they are employed in which case, it might be true. Professional fees will likely be unchanged. Many groups that work at hospitals have professional service contracts

Thank you for validating what I originally stressed: This is an employment vs. independence issue. All the concerns you've voiced is about lack of control- income, job security,etc. That is just a small part of what happens when you cede control and become employed. Hospitals and health systems are gaining more control of radiation oncology services every year. On top of that, they are given a subsidy in the form of hospital-based higher rates, so you are just adding octane boost to that machine. And you are gleefully cheering them on. Ever wonder why you are seeing more and more employment-based opportunities?? Take a moment and think about that.

You seem to be stuck on your entitled $$$. That's fine, it is a reality we all accept. But if you have more independence and control, you also would not be worrying about what someone else pays you. As I said before, profession service fees are roughly the same whether it is in a freestanding or hospital-based setting and the difference is the extra APC code and technical fees. And professional fees account for roughly 18% of this global take. Even at this stage, it is not hard to earn $250K+ on professional service alone, even at non hospital-based rate. Radiation Oncology remains one of this biggest cash cows for hospitals. Believe me, if they cannot get a positive earning, then they either are being mismanaged or not getting enough referrals and should not be running a department in the first place, or they are blatantly lying to you about their finances, which by the way, if you are an employed physician, you will rarely and likely never see the financials. So I am now dumbfounded why you still believe any equalization will lower your salary.

exactly

Interested to hear views regarding this likely scenario: Case rate for radiotherapy- it will come, believe me. They will give you a lump sum and you can do whatever you want with it- 3D/IMRT/SBRT/Brachy, hypofractionation/standard fractionation etc.

I've been saying that forever. They do it for hospitals now with DRG payments, as well as in other countries.

 

[Tanner]

It may be individual physicians behavior and there are people in all walks doing it but in my experience, it is more commonly seen in private practice at free standing centers. As I said above instead of relying on my experience or your experience, before making any decisions lets do the math. Take a look at the total bill for common cases-prostate, breast, rectal, lung, head and neck, palliative, etc and look at the total professional, technical, and not each code but the total bill for free standing vs. hospital based. My guess is that lower reimbursement per code is made up by doing more from what I have seen.

The maldistribution also exists in light of higher costs that larger organizations face. If you are a free standing center with less than 50 employees, well no worries about the ACA or a lot of other regulations that cost money. Sure there are some economies of scale gained as well, not sure where the balance lies there.

What you are addressing is more about problems with fee for service / per click, not employment vs independence and not about differences between hospital-based and freestanding pay schedule.

Nonetheless, to chime in, I would venture that in your personal observation that more freestanding centers are over treating and over fractionating, those are more likely single owners or single full-time rad onc practice where there is no true peer review. It is not the freestanding setting. It is likely the environment of doing what ever you want without any quality peer oversight.

There are many private practice multi rad onc groups out there with freestanding centers that practice best medicine with peer review. I think they exist more than those who abuse the system.

 

[MOHS_01]

That's pretty much what any non-hospital owned, freestanding practice (not just in radiation oncology) is looking at now. Why do you think there has been such a trend towards physician employment and practice ownership by hospitals? Hospitals get premium pricing for doing the exact same thing over a freestanding center.

You are preaching to the choir on this one as I am disadvantaged on all sides as a solo provider in a region where the large single specialty group has an ASC (we're a CON state), the large MSG has a CON, and both enjoy favorable contracting due to their increased leverage with payers.

Discussion on the preferable remedies to the problem are most productive when one is able to accurately delineate what the actual problem is, however. In this instance, transparency in pricing is the issue at hand here... so let us not enter into the game of utilizing the strong arm that is State force because you perceive that it injures your "enemies" more than it does yourself. That is what I consider a fool's folly... for, like it or not, your value is ultimately determined by your cheapest replacement alternative.... it is a vicious little cycle that will come back around to flank you and bite you in the ol' arse, I promise you.

 

[Tanner]

This goes to a lot of arguments. Those in free standing centers (the minority) are willing to skin those that are employed (the growing majority) to help themselves. It seems we are still stuck on fighting to each getter a bigger piece of the pie instead of working together.

I heard that line before in many other context. Seems more like the "majority" wants everyone to fall in line, just like they did, giving up their independence.

not so long ago, independent practices were the majority, but perhaps more people, especially new grads, are just as what Gfunk called out, lazy and complacent. And now those who are upholding the original ethos have become the minority. It is not the minority that is "skinning" you, Wagy. I do not need to spell it out for you.

 

[Tanner]

Seriously Wagy, lets not kid ourselves with your silly notion that I am the one who is not looking at the whole picture when all you have focused on is your own $$$. Do not take it the wrong way, but for you to think that having one year under you belt in a sheltered academic setting empowers you to think others do not have "all the relevant info" confirms more to us that you are as naïve as I was when I was still a resident, (and the available positions in my year was only 92).

What I expound next is for the benefit of those here who are earnestly trying to understand the issue at hand and not for those who are brain-locked into seeing the world only through their personal financial well being and have an "if you're not with us, you're against us" mentality.

I and others have emphasized on the importance of physician independence. Independence is key to how you determine your professional legacy, make your own clinical decisions, staffing decisions, even who you want to refer. Fundamentally, It is not a financial issue. Yet, time and time again, there are those here who fall back on how it will affect their wallet; they fall back on this fear of losing their salary by the prospect of equalization when I and experienced others have made it quite clear that the difference does not significantly affect those who contracts with or are employed by a hospital system. Equalization of fee schedule (not just for radiation oncology, but any outpatient services) nullifies the financial incentives to a system that is taking away more and more of your independence and burdens patients with higher unnecessary costs. Remember, physicians did not lobby to have different fee schedules for hospitals and non-hospital (free-standing) services. Hospitals did.

 

[DukeNukem]

I dont have data to back this up but my experience has been that free standing centers where physicians have a larger stake in the bottom line are more likely to ... 3) offer patients care that is out of line with the standard of care nationally in terms of pushing for treatments the reimburse well but aren't warranted off-protocol at this time(ex. Cyberknife prostate).

It's the hospital/academic based practices that are doing the vast majority of the protons for prostates. To me, the expansion of protons is the biggest disgrace to our field, and the easiest thing for other specialties to hold against us.

Also, I think Tanner makes good points. If all the private practice jobs suddenly disappeared, and academic and other hospital based practices suddenly had no competition, our salaries would tank, while the MBAs and other administrators who run the hospitals make themselves richer off our backs. That's business for you. It's only by having multiple practice opportunities that we maintain any negotiating power.

 

[medgator]

It's the hospital/academic based practices that are doing the vast majority of the protons for prostates. To me, the expansion of protons is the biggest disgrace to our field, and the easiest thing for other specialties to hold against us.

Also, I think Tanner makes good points. If all the private practice jobs suddenly disappeared, and academic and other hospital based practices suddenly had no competition, our salaries would tank, while the MBAs and other administrators who run the hospitals make themselves richer off our backs. That's business for you. It's only by having multiple practice opportunities that we maintain any negotiating power.

Good post. While I agree that hospitals and academic centers have been pushing for for protons, it's important not to ignore the role that for-profit entities and corporations (like Procure) have also been playing

http://www.nytimes.com/2007/12/26/business/26protonba.html?_r=0

Other companies help finance, build and operate the facilities. The most well known, ProCure Treatment Centers, is signing up community hospitals and even private medical practices. The hospitals or doctors get a small ownership stake, and therefore a small part of the profits, while directing the medical treatments.

ProCure's first project is being built in Oklahoma City by two medical practices with a total of six radiation oncologists. Some wealthy local residents, led by Aubrey McClendon, who runs a big natural gas company in the area, invested $35 million in the $100 million project.

The company then arranged the rest of the financing through two Belgian banks that do business with Ion Beam Applications, the equipment supplier. Financing the proton centers has been a challenge even for big academic medical centers, which have taken different approaches.

While M. D. Anderson Cancer Center is part of the University of Texas, its proton center is not. To avoid endangering the university's credit rating, the proton center is a separate, for-profit entity.

M. D. Anderson supplies staff members for the center, but owns only 15 percent. The rest is owned by various investors recruited by an investment bank in Houston.

http://www.dotmed.com/news/story/20365

The for-profit ProCure chain of proton therapy centers currently operates three out of 10 proton therapy centers in the U.S., representing a significant portion of U.S. patients treated with the advanced form of radiation therapy.