For graduating residents and fellows the word is out: There are not enough of you to fill the demand for physicians in this country, and this problem is only going to grow over the next decade. No matter what can be done in attempts to adjust this equation—better use of mid-levels, telehealth, the move from volume to value, new med schools opening—no significant change will alter this trend in the foreseeable future.
I recently received an interesting data sheet from the venerable recruiting firm Merritt Hawkins that plotted hospital inpatient/outpatient revenue generated by certain specialties. Not surprisingly, cardiovascular surgery led with $3.6Million, followed closely by invasive cardiology ($3.5M), neurosurgery (same). At the tail end of this list of ten were pulmonology ($2.4M) and non-invasive cardiology ($2.3M).
That’s a lot of downstream income.
Short story: Years ago I worked with two surgeons who had built a strong private practice augmented by an integrative platform that really captured all of their patients’ clinical needs (this was years before integrative had become the buzz word it is today). It was a huge success, almost pioneering for its time. Patient volume shot up.
The hospital really noticed. Soon, in an effort to insure this explosion of revenue, the hospital approached my docs about coming on board as employed physicians, we demurred and started to gather information. Soon we got a good estimate of the downstream net revenue these surgical procedures generated. The hospital was clearly surprised when we presented this data, and we used this number to negotiate salaries far greater than the MGMA income figures presented to us. In effect, we got a little piece of the bigger pie.
So how does all of this come together? There are some obvious touch points. First, in this world of diminishing hospital revenues, physicians with specialties that generate in-patient revenues are going to be absolute necessities for hospital success. Heads and hearts, ortho and gastro will continue to rule. And these types of doctors will be in great demand. Second, with the shortage of physicians growing annually, highly trained specialists will be in great demand. But it won’t just be them. All physicians will be in great demand.
So it this a forecast for the perfect storm, the moment when all these forces combine to give physicians, graduating residents and fellows a new strength and leverage in negotiating relationships with hospitals, ASCS, ACOs and even insurance companies? When doctors finally take back some of the power they’ve given up?
Some larger employers are already addressing this, creating multi-specialty groups where revenues are not just based on the old standard “eat what you kill.” They understand the value of recognizing and reimbursing physicians for their contribution to the total patient revenue picture.
For graduating residents and fellows, I believe the time is now. There is no need to act like a deer in the headlights when negotiating employment agreements. As the number of job offers they field grows from 50 to 100, they have the leverage to really examine potential employers and how they reimburse their physicians and negotiate with hospitals for a piece of the downstream dollars and see how they fit into all of this.
It’s an intriguing time, with many changes on the horizon. All docs should be watching developments, but especially graduates.---TOM ELLIS III