Other than relationships with family and friends, the relationship to one’s employer may be one of the most important in a person’s life. When you spend 40, 50, 60, or more hours a week in the service of an employer, the relationship can affect your physical and emotional health in a myriad of ways. With all of the rapid changes taking place in health care (regulatory, economic, clinical, etc.) the employer-employee dynamic changes continuously. This month, we underscore some of those important changes and how they impact the practice of anesthesiology.

Dr. Polce discusses the critical role that capital plays in his group’s practice. Backed by a large private equity (PE) firm, he reviews how his employer’s partnership with PE allowed his group to not only survive, but to thrive in a perilous health care environment.

Attorney and practice management expert Judith Semo reviews a critically important issue that is often overlooked by anesthesiologists – mandatory arbitration clauses. Though physicians often focus on compensation and duty hours when reviewing employment contracts, mandatory arbitration can have far-reaching consequences for one’s employment and relationship with their employer.

Drs. Beta, Ural, and Rafique discuss staffing models and strategies for anesthesiology. When an employer sets a group’s staffing, it affects not only one’s duty hours and lifestyle, but also job satisfaction. Anesthesiologists practice in a large range of staffing models, from MD-only to large care teams, and this fact is a crucial determination when a prospective employee interviews for a job, or chooses to continue employment.

Drs. Ibekwe and Gupta dive into quality metrics – a critical issue that affects patient care. Quality metrics are frequently highlighted by administrators and used as a component of compensation, but do they really improve value? How are these indicators used by an employer to determine employee efficacy at the patient bedside? What does the future hold for anesthesiologists seeking employment? The only certainty, it seems, is that change will continue.

One such change, occurring with more frequency in many parts of the country, includes a shift to hospital-based work or employment with a large health care system. Historically, physician practice was synonymous with being an entrepreneur. Often, the image of doctors in society was that of the solo practitioner or the owner-partner within a group of health care professionals, working long hours, but directly reaping financial benefit from their extraordinary efforts. Increasingly, however, physicians are either transitioning to employee models of practice from partnership or spending their entire career as employed practitioners. These non-owner employees may work for physician-owned groups, PE-backed corporations, or hospitals and health care systems. It is this last trend – to hospital-based or health care system-based employment that we will discuss further.

According to an analysis by the American Medical Association (AMA), between 2012 and 2022, the number of self-employed physicians fell by 9%, and nearly half (49.7%) were employed by another entity (asamonitor.pub/3VCQxk9). During that same 10-year period, the share of physicians working in private practice dropped from 60.1% to 46.7%. In the same study, the share of physicians employed by, or contracted directly with, a hospital increased from 5.6% to 9.6%. Physicians working in a hospital-owned practice increased from 23.4% to 31.3%.

There are a variety of reasons a physician would seek direct employment by a hospital. Potentially of more interest, however, is why a practice owner would pursue acquisition by a hospital, especially given the likelihood of a reduced (or absent) payout. This is especially true when compared to a potential PE-backed acquisition. The AMA 2022 Physician Practice Benchmark Survey assessed the underlying motivations of physicians who had switched to hospital employment. Of the survey respondents, 79.5% cited negotiating ability for higher payments as an important or very important reason for their decision to be acquired by a hospital (asamonitor.pub/3VCQxk9; asamonitor.pub/3VEXzEP). Further, 69% cited access to costly resources and 71.4% cited regulatory and administrative requirements as important or very important factors.

I recently had the privilege of discussing hospital-based employment for anesthesiologists with several physicians who have been through the transition from private or corporate-owned practice. David Ryu, DO, is Medical Director for Anesthesiology at Holy Name Medical Center in Teaneck, New Jersey. In 2018-2019, his hospital transitioned perioperative services from TeamHealth to hospital employment, and he and many of his colleagues remained at Holy Name, citing their dedication to the hospital and community as their primary consideration. He states that his “mission is to take care of the patients” and believes that this employment construct enables him and his colleagues to be more involved in the hospital ecosystem. Whereas, under his prior employer, decision-making may have been slowed by layers of bureaucracy, he states that direct employment allows his department to be more “nimble.” For example, he can now pick up the phone and speak directly to the chief medical officer and is able to quickly streamline decisions related to quality, patient safety, and clinical or financial considerations.

“It’s the way things are going,” Dr. Ryu continued, referring to hospital-based employment. He went on to explain that the private practice model suffered from declining reimbursement and regulatory or administrative pressures. That likely led to the influx of PE investment in the health care industry. Groups and clinicians then benefited from the ability to outsource financial and administrative responsibilities, focusing instead on patient care. Further financial strain due to declining reimbursement and ongoing staffing shortages, however, likely led to an increased need for facility stipends or reduction of services. These factors often lead to conditions that prompt hospitals and health care facilities to seek out direct employment models.

Jonathan Bauman, MD, is the Medical Director of Anesthesiology for Northwell Health in New York state, serving dozens of hospitals and ambulatory surgical sites. His private practice was directly acquired by the health care system, and he now oversees about 700 anesthesiologists and nurse anesthetists. In addition to leading the integration of his former partners into the Northwell system, he has worked to transition many of Northwell’s sites from other practice modalities to fellow hospital employees. He cites the success of his system’s anesthesia service line to the belief that this model allows the anesthesiologist to “focus on the patient.” He believes that Northwell’s model continues to attract new employees because “the security is there.” When he and his partners considered the initial offer to join Northwell as hospital employees, their single biggest consideration was long-term planning. They found that those interests were well-aligned with the hospital, given their mutual focus on both patient care and quality of services. Despite leading a large number of health care providers at countless facilities throughout New York, Dr. Bauman has been given great autonomy to direct clinical care, stating that Northwell “is not looking to change our clinical practice.”

Is hospital employment a passing fad, or is it the new normal for anesthesiology? When the article “Understanding the Physician Employment ‘Movement’” by Bonnie Darves was published by the New England Journal of Medicine in 2014, long-term economic effects of health reform and declining reimbursement were cited as primary reasons driving physician employment models (asamonitor.pub/45Y8j6h). Work as an independent practitioner or as a partner in a private practice often requires the desire to run a business, with its associated responsibilities and stressors. Those physicians who choose employment can focus on their clinical practice instead of financial and regulatory burdens. Consequently, the author states that hospitals and health care systems also seek direct employment to ensure improved alignment for both clinical and financial interests between providers and facilities. This is especially true as efforts increase to improve health outcomes and cut costs as systems form or join accountable care organizations.

For those physicians considering this career path, it is important to consider performance expectations by their prospective employer. This includes successful identification of performance and productivity metrics in their contract. When a practitioner chooses a newly formed hospital-based group, it is also especially important to consider the goals, vision, philosophy, and plans of the organization. Though it remains to be seen if hospital employment will be an ongoing trend, it is clear that this employer-employee relationship may offer anesthesiologists unique opportunities for future consideration.