"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Thursday, October 15, 2015

Hiring Physicians

Last week there was an article in Becker's Hospital Review, "Whistle-blower Physicians: We have got to get hospitals out of the business of hiring doctors."  The article was based on a physician who brought allegations against a Florida health system for engaging in improper financial relationships with physicians.  The health system settled with the federal government for $69.5 million.  

It was the same physician who stated that hospitals shouldn't be hiring physicians.  I couldn't agree more if their intent is to engage in illegal practices; however, that isn't the case for the great majority of hospitals.  There are always going to be some who push the envelope too far, but for the most part they eventually get caught.  The Feds have made it very lucrative for whistle-blowers, such as the physician in this case, by sharing in a percentage of the settlement payment.   

As for hospitals not employing physicians, that's ridiculous.  The ability to engage in improper financial relationships pretty much goes away when one takes volume out of the equation.  All US hospitals are transitioning to a new care delivery model and away from fee-for-service or volume-based care.  Basing payment and incentives on quality and performance as one does in a value-based care delivery model pretty much takes away the incentive for hospitals to pay for referrals.  

In addition, the federal government continues to make it very difficult for physicians to conduct business from a regulatory perspective.  With tens of thousands of federal regulations that both hospitals and physicians must comply with, physicians have found it easier to be employed by hospitals so they can focus on practicing medicine rather than complying with onerous regulatory requirements.  

There will always be an opportunity for hospitals and physicians to act inappropriately, but such opportunities as described by the physician whistle-blower are significantly reduced through a change in how both hospitals and physicians are paid.

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