Health systems are seeking a new physician strategy as the healthcare ecosystem changes.
Over the last 20 years, many health systems took a multispecialty practice approach to provide comprehensive care and optimize administrative efficiencies, according to VMG Health's 2023 Physician Alignment: Tips & Trends Report. Primary care and specialty physicians were combined to operate under a single entity: the medical group adjacent to the hospital.
"For a variety of reasons, multispecialty orientation for employed medical group design has not lived up to its expectations. For many integrated delivery systems, multispecialty compensation models do not portend substantive economic alignment among the 'collective' of specialties, and in turn the terms of the individual employment agreement trump everyone else," the report authors noted.
Once the medical group is employed by the hospital and compensated by productivity or invested time, the alignment and incentives of independent practice dissipate, according to the report. As a result, VMG believes more hospitals are now shifting to a single-specialty physician strategy.
The new organizational structure places the specialty "product lines" and primary care within the ambulatory division, on par with the hospital. The different "product lines," which often include orthopedics, cardiovascular care or neurosurgery, drive physician expertise and streamline workflows, according to the report. The hospital and physician product lines all flow into the non-provider departments and services, including revenue cycle, IT, compensation and more.
The single-specialty structure can shift budget and management accountabilities, but there is an advantage there as well.
"Most systems recognize the inherent value of having infrastructure and developing scalable support (revenue cycle, contract administration, compensation administration, financial reporting, etc.) that promotes best-in-class offerings which can still be done with a single-specialty approach," the report notes.
Employed physician compensation is a big topic at financially strained health systems. The Medical Group Management Associates reported earlier this year that hospital ancillary service-related specialties had a 1 percent pay increase, nearly 1 percent below the expected growth rate. Surgical specialties had the lowest growth rate last year while primary care physicians had a 4 percent pay increase.
Medscape reported in August that around 57 percent of employed physicians are at least satisfied with their income while 20 percent are not. Thirty-two percent of respondents said their pay included a base salary, productivity targets and other performance metrics; 31 percent said they receive salary only.
Health systems are also partnering with physician practices, taking minority ownership or establishing alignment around value-based care.