Fitch: MACRA encourages hospital employment of physicians

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The Medicare Access and CHIP Reauthorization Act is stimulating hospitals to employ physicians, according to Fitch Ratings.

In its monthly series "Fitch Focus on Munis," analysts said the law is tightening hospital-physician relationships and moving more independent physicians toward hospital employment.

"Healthcare is experiencing transformational change, with population health, value-based
reimbursement and outpatient service growth affecting the hospital operating environment," said Gary Sokolow, director at Fitch Ratings. "Employing physicians, when executed well, can help solidify a hospital's market position and grow its clinical footprint — offsetting their associated expenses."

Hospitals with a high level of physician integration, firm financial footing and good market position are better positioned for MACRA, Fitch analysts predict. The law will also distinguish hospitals along the credit scale.

"MACRA could provide the nudge needed for markets with less physician employment and integration to consolidate and integrate physicians, disrupting long standing referral patterns and increasing costs as these markets sort themselves out," according to Fitch Ratings. 

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