What ‘Big Medicine’ Means for Doctors and Patients

A colleague described a recent meeting at his hospital by saying that five years ago, most of the physicians in the room had been like him, independent owners of small group practices. Now a majority were employees of the hospital.

“I’m a dying breed,” he said, “and it’s getting harder to survive.” The doctors in his own group had just spent months wrangling over their hospital contract, installing an electronic medical record system and scrambling to fill the void in their on-call schedule left by a colleague who went to work for another hospital.

“What’s not to like about working for a hospital,” he asked wearily, “when you can have better hours, a guaranteed salary and no practice management hassles?”

Like wildebeests thundering across the Serengeti in search of greener pastures, doctors have been fleeing their private practices for hospital employment. Over the last decade, there has been a nearly 75 percent increase in the number of doctors employed by hospitals. Nearly three-quarters of hospital leaders say they plan to increase that percentage over the next three years.

How this transformation will affect patients and their relationships with doctors remains unclear. For some, these changes represent yet another nail in the coffin of the old-fashioned patient-doctor bond. For others, they are a déjà vu of the last great physician migration, in the 1990s, when hospitals actively sought, bought then let go of small practices, and doctors went from being independent practitioners to employees and back again.

But according to a recent commentary in The New England Journal of Medicine, there is one striking difference: This time there may be no going back.

Robert Kocher, M.D.

As Dr. Robert Kocher and Nikhil R. Sahni warn in their editorial, “Employment choices that physicians make today may not be able to be undone.”

I spoke recently with Dr. Kocher. An internist by training and the director of the McKinsey & Company Center for U.S. Health System Reform, Dr. Kocher was a member of the National Economic Council and helped shape health care overhaul legislation as a special assistant to President Obama. The following are excerpts from our interview.

What is so unique about this point in time?

Change in health care is generally slow, but right now it’s accelerated relative to the last 10 years. It won’t be as easy to undo this time because of the tremendous, simultaneous changes in the payment system and health information technology.

In the late ’90s, doctors could go back to their practices without missing a beat because it was the same fee-for-service payment environment. Now there are huge efforts to change how doctors are paid. I don’t know of any health plan that is not experimenting with one of the newer ways of payment, like risk-based payment approaches, accountable care organizations or patient-centered medical homes. Right now you may know how to make money in a fee-for-service world; but you’ll have no experience in the payment system five years from now.

Health information technology will also be increasingly important in practice. With the new standards set by the Health Information Technology for Economic and Clinical Health Act that offers clinicians and hospitals incentive payments to use electronic health records, doctors can begin to adopt health I.T. at any point until 2016. But after that time, those expectations and standards are going to be cranked up every two years. If practitioners all around you are using health I.T. at a certain level, you are going to have a hard time collaborating with your peers if you don’t.

With health care systems getting larger, should patients be concerned about pricing and possible monopolies?

As hospitals become larger and control more of the doctors and specialists, they will acquire the ability to charge higher prices. Sometimes those increased costs will lead to better care; those hospitals will be able to afford better I.T. and bigger health care teams. No one, for example, would say that the Mayo or Cleveland Clinic is inexpensive.

On the other hand, you could also end up with a system like Kaiser that provides the same high-quality care at lower costs.

All of these systems exemplify quality, but the price quotients are different.

What do all of these changes mean for patients and the patient-doctor relationship?

There’s no question that forming larger systems that are better integrated could be a really good thing for patients. When you look at some of the best systems in the country today, places like the Mayo Clinic or Kaiser, you see that the model of hospitals employing doctors results in fantastic care. We become a lot more purposeful about how patients are cared for. There’s a lot more attention paid to treatment goals, more emphasis on prevention, better communication, more efforts to standardize and use expensive supplies more judiciously.

I’m quite confident that the employment of doctors or organizing them into larger groups could have a very provocative and profound effect on quality. I’m less certain of the kind of effect these changes will have on costs for patients.

In your editorial, you make the point that doctors should understand the implications of their employment choices. What should patients know?

Patients should realize that there could be a lot of benefits to receiving their care from a larger and more coordinated group of providers. But most of those benefits will come from how well those providers communicate across their system and how well their I.T. is used to guide their clinical decision-making.

Patients should ask: Are my providers being attentive to my treatment plan and goals? Am I seeing providers who have my information? When I reach out, is there someone who knows me or is organizing my care? Is there someone working with patients to make sure the system is actually working?