The Corporate Practice of Medicine

Two opposing views, one for the corporate practice of medicine:

The trend toward hospital employment became a stampede on Jan. 1, when CMS enacted drastically reduced payments for in-office echocardiograms and nuclear stress tests, and eliminated codes for consultations. Even worse, MedPac, an influential panel advising Congress on Medicare, has recommended complete elimination of the in-office exemption for physician-owned imaging services. Payment for the technical as well as the professional component of echocardiograms and nuclear cardiology procedures performed in their offices has been a major source of revenue for independent cardiologists, who are faced with ever increasing overhead to pay for complex billing services, malpractice insurance and an electronic health record.

As expenses continue to increase and revenues decline, it is little wonder than an estimated 50% to 75% of all cardiologists in the country will be hospital employees by the end of 2010, up from less than 25% just 5 years ago. According to MedAxiom, which recently surveyed 5,400 cardiologists in 300 practices, cardiologists who have become hospital employees have seen their incomes stabilize, or even increase slightly, while independent practitioners continue to experience a steady decline in income.

Economics aside, the transformation from independent practice to hospital employment can offer real advantages to both cardiologists and hospitals when both parties have developed a joint vision of care models and global care delivery paradigms, truly sharing responsibility for decision-making based both on what is best for individual patients and for the health care system as a whole. A continuing challenge in virtually all integrated practices is the fusion of a facility-centric model with a physician-centric model, sharing not just governance, but control of everyday activities.

Nearly everyone agrees that the quality of health care benefits from a team approach, with seamless exchange of electronic data, systematic monitoring of appropriate resource utilization and realistic measurement of the quality of care delivered using clinical rather than billing data.The current legislative, legal and regulatory environment favors initiatives from integrated systems of hospitals and employed physicians. It is more difficult for hospitals and non-employed physicians to collaborate in order to meet ongoing demands for increased quality and decreased costs of health care.

... and one against the corporate practice of medicine:

The bar against the corporate practice of medicine has been in place in California since 1938 and continues to protect patients from corporate entities exerting control over the delivery of medicine. When hospitals are allowed to hire and charge for physician services, a division of the physician’s loyalty to the patient can be created, commercial exploitation of medical care can occur, and lay control over a physician’s professional medical judgment can be exerted, each of which resulting in higher healthcare costs and — what is worse — diminished quality of care provided to patients in California.

Other states have similar statutes barring the corporate practice of medicine, but in many states hospitals are exempted.

How do we keep the patients' best interests at the forefront when doctors are increasingly becoming corporate employees?

-Wes