The business of how physicians practice medicine has undoubtedly evolved over time. Proponents of healthcare reform argue that many of the changes allow better care for our patients. Some doctors aren’t too convinced. Whether or not we’re on the mainstream bandwagon, we still have to play the game if we practice medicine.
The healthcare system in America has largely operated on a fee-for-service basis. This means that the health insurance (or patient) pays the doctors a pre-arranged amount for services. There was a time in the 1980’s where this compensation almost went away, but due to reasons I can fully understand fee-for-service has stayed alive.
The employed physician
The prominence of the employed physician has grown over time regardless of the underlying compensation structure. This is partly due to growth of certain physician specialties and economic demands of physicians.
Hospitalists, intensivists, and emergency medicine doctors constitute a growing number of the physician workforce. These specialists often work shifts for hospital systems, either as contracted groups or as straight employees. This means that they are compensated for a set amount of work. If they provide more services, they will likely earn more.
You don’t have to belong to those specialties above in order to be employed. Doctors who opt for straight employment contracts with a medical group can also work as an employee. Additionally, you could join a managed care group such as Kaiser Permanente to live a career as an employee.
The benefits of being an employee are exactly the same disadvantages of employment. As an employee, you provide a set amount of services for payment. Life is pretty clear-cut. You receive benefits from your employer, but you also have to work under the rules of the employer. As long as you finish your work, your job is done. Bad coworkers? Tough luck getting rid of them. If you’re the bad coworker, then you could probably feed off of the system while getting paid! In fact, an employed physician exchanges professional time for money. This is an important aspect—whether or not you are actually practicing medicine during this time you are still paid on the clock.
The owner/partner physician
Many years ago, doctors literally started a business to care for patients. They contracted with insurers, bought or rented an office, equipment, hired staff, and worked the business. With any business, the owner is responsible for everything. Deadbeat payors? Deadbeat employees? Your problem. That’s perfectly fine for some of us, but some of us aren’t equipped to run a business in addition to practicing medicine. Some of us simply prefer not to deal with running a business—we became doctors presumably to practice medicine, not to handle the front desk employees.
Presumably the hassle of running your own medical practice or being an owner of a medical practice ought to come with some reward, whether it be freedom to call the shots or monetary compensation that you wouldn’t otherwise enjoy with being a corporate slave or peon.
The take-home? Do you want the freedom to practice medicine for your career in exchange for others managing the business, or does the reward from being your own boss outweigh the additional work?
We’ll look at some financial analyses in a later post. Stay tuned…