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Shift in markets pushes doctors to salaried jobs

NEW YORK — American physicians, worried about changes in the health care market, are streaming into salaried jobs with hospitals. Though the shift from private practice has been most pronounced in primary care, specialists are following.

Last year, 64 percent of job offers filled through Merritt Hawkins, one of the nation’s leading physician placement firms, involved hospital employment, compared with only 11 percent in 2004. The firm anticipates a rise to 75 percent in the next two years.

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Today, about 60 percent of family doctors and pediatricians, 50 percent of surgeons, and 25 percent of surgical subspecialists — such as ophthalmologists and ear, nose, and throat surgeons — are employees rather than independent, according to the American Medical Association. “We’re seeing it changing fast,” said Mark E. Smith, president of Merritt Hawkins.

Health economists are nearly unanimous that the United States should move away from fee-for-service payments to doctors, the traditional system where private physicians are paid for each procedure and test, because it drives up the nation’s $2.7 trillion health care bill by rewarding overuse. But experts caution that the change from private practice to salaried jobs may not yield better or cheaper care for patients.

“In many places, the trend will almost certainly lead to more expensive care in the short run,” said Robert Mechanic, an economist who studies health care at Brandeis University’s Heller School for Social Policy and Management.

When hospitals gather the right mix of salaried front-line doctors and specialists under one roof, it can yield cost-efficient and coordinated patient care, like the Kaiser system in California and Intermountain Healthcare in Utah.

But many of the new salaried arrangements have evolved from hospitals looking for new revenues and could have the opposite effect. When doctors’ practices are bought by a hospital, a colonoscopy or stress test performed in the office can suddenly cost far more because a hospital “facility fee” is tacked on. Likewise, Smith said, many doctors on salary are offered bonuses tied to how much billing they generate, which could encourage physicians to order more X-rays and tests.

“The question now is how to shift the compensation from a focus on volume to a focus on quality,” said Smith. He said that 35 percent of the jobs he recruits for currently have such incentives, “but it’s pennies, not enough to really influence behavior.”

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