Dr. Theodore Strange and his 60 physician colleagues at the University Physicians Group in New York City will soon be hospital-employed again.
The practice, launched in 1991 as part of Staten Island University Hospital in New York City, became independent in 2002. But faced with the need to upgrade reporting systems, a shortage of capital and an aging leadership, the group will rejoin the hospital, now a part of Northwell Health (formerly North Shore-Long Island Jewish Health System) on Aug. 1.
“We'll have the financial capital to stay state of the art,” said Strange, 57.
The group that University Physicians is joining, Northwell Health Physician Partners, has more than 2,500 employed physicians and is the seventh-largest physician group practice in the nation. It is a key part of the state's largest healthcare system with 21 hospitals and 450 outpatient practices.
Across the country, physician groups are going through the same deliberate exercises that led Strange and partners to cast their lot with a bigger system.
They're asking themselves: Do we have the money, information technology and access to data to transition from traditional fee-for-service to value-based reimbursement that asks physicians to take financial risks for patient care and puts a premium on quality?
Over the past several years, there's been a steady increase of physicians choosing employment over independence. They're joining either hospital systems or giant physician-staffing companies, such as TeamHealth of Knoxville, Tenn., and AmSurg's Sheridan subsidiary.
According to member surveys by the Medical Group Management Association, the share of physicians who worked directly for a hospital or in practices at least partially owned by a hospital rose from 29% in 2012 to 33% in 2014.
Of 84 respondents this year to Modern Healthcare's hospital systems survey, almost all respondents added employed physicians in 2015 with the total physician employment among respondents showing a 9.8% increase year over year.
Physician practices purchased by third-party staffing companies in the first quarter nearly doubled to 21 groups compared with 13 in the year-ago quarter, said Michael Abrams, managing partner of healthcare management consultancy Numerof & Associates.