Hospital-Based Employment of Orthopaedic Surgeons—Passing Trend or New Paradigm?

Abstract

Hospital employment of physicians in the United States has passed through periods of intense activity and decline over the past several decades. In the early 1990s, many hospitals sought to acquire primary-care physician practices, with the goal of increasing market share by controlling referrals of patients enrolled in managed-care plans and increasing negotiating leverage with managed-care organizations. In general, these employment relationships were hastily developed, with very little foresight and planning regarding the goals and responsibilities of each party. Furthermore, the importance of physician leadership, accountability, and cultural differences between hospitals and physician practices were grossly underestimated. As a result, most of these relationships resulted in financial losses and were divested by the end of the decade1-3. Since the year 2000, there has been an increasing trend toward the acquisition and employment of specialist physicians by hospitals. According to a recent survey of members of the American Academy of Orthopaedic Surgeons (AAOS), more than three times as many orthopaedic surgeons are employed by hospitals today as compared with when they entered into practice4. Physician recruiting agencies note that hospitals are among their fastest-growing clients and now comprise the largest percentage of their physician recruiting activity. Specialist physicians, including orthopaedic surgeons, are among the most common hospital-based physician recruitments5. Multiple factors are driving this trend. Hospitals are seeking increased alignment of their interests and goals with those of specialist physicians for many reasons, including the desire to gain and/or preserve market share in a particular specialty area, such as orthopaedics; to neutralize competition from physician owners of imaging and physical therapy facilities, ambulatory surgery centers, and specialty hospitals; to stabilize their medical staff; and to meet urgent clinical needs, including emergency call and indigent care. Furthermore, alignment with specialist physicians may allow hospitals …