Like many hospital systems, Bon Secours Health System has been on a physician buying spree.
As of last May, the 13-hospital system employed 708 physicians and midlevel providers, representing a nearly 30% increase since fiscal 2011 and an 86% jump since fiscal 2009, according to its most recent financial filing. And it continues to acquire physician practices. Employing doctors is just one prong of Bon Secours' physician integration strategy aimed at preparing the system for greater care coordination.
“We think that to do population health, especially in chronic disease, you have to have an integrated system,” said Dr. Marlon Priest, executive vice president and chief medical officer of the Marriottsville, Md.-based system.
But Bon Secours' acquisition of physician practices hasn't been without bumps. In its fiscal 2013, ended Aug. 31, the not-for-profit system took $158 million in losses as a result of its physician employment strategy, according to Moody's Investors Service. Employing more physicians has meant a 5.2% increase in salary and benefit expenses, as well as added costs related to renting and staffing office space. The system has been working with a consulting firm since fiscal 2012 on a cost-reduction plan, focusing on better integrating its employed doctors, according to its financial report.
Systems across the country have been rapidly buying physician groups to expand their referral networks and prepare for a not-too-distant future where they will have to manage the health of their patient populations and be held financially accountable for meeting cost and outcomes goals. The hope is that stronger physician alignment will leave systems better positioned to meet the demands of payers, particularly as more health plans move to narrow networks. In addition, some systems are launching their own managed-care plans and are using employed physicians to offer a broader and more attractive network.