Category Archives: Physician Employment

The Value-based Care Agenda in Trump 2.0 Healthcare

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, ACA, Accountable Care Organization (ACO), Alternative Payment Model, Center for Medicare and Medicaid Services (CMS), Center for Medicare and Medicaid Innovation (CMMI), Pay for Performance, Physician Compensation, Physician Employment, Physician Leadership, Physician Practice Management, Risk-Based Compensation, Risk-Based Contracting, Shared Savings Rate, Value Based Care Model, Value Creation, Value-Based Care Functions, Value-Based Contracting, Value-Based Healthcare • Leave a comment
The Value-based Care Agenda in Trump 2.0 Healthcare

This week, the House Energy and Commerce and Ways and Means Committees begins work on the reconciliation bill they hope to complete by Memorial Day. Healthcare cuts are expected to figure prominently in the committee’s work.

And in San Diego, America’s Physician Groups (APG) will host its spring meeting “Kickstarting Accountable Care: Innovations for an Urgent Future” featuring Presidential historian Dorris Kearns Goodwin and new CMS Innovation Center Director Abe Sutton. Its focus will be the immediate future of value-based programs in Trump Healthcare 2.0, especially accountable care organizations (ACOs) and alternative payment models (APMs).

Central to both efforts is the administration’s mandate to reduce federal spending which it deems achievable, in part, by replacing fee for services with value-based payments to providers from the government’s Medicare and Medicaid programs. 

The CMS Center for Medicare and Medicaid Innovation (CMMI) is the government’s primary vehicle to test and implement alternative payment programs that reduce federal spending and improve the quality and effectiveness of services simultaneously.

Pledges to replace fee-for-service payments with value-based incentives are not new to Medicare.  Twenty-five years ago, they were called “pay for performance” programs and, in 2010, included in the Affordable Care as alternative payment models overseen by CMMI.

But the effectiveness of APMs has been modest at best: of 50+ models attempted, only 6 proved effective in reducing Medicare spending while spending $5.4 billion on the programs. Few were adopted in Medicaid and only a handful by commercial payers and large self-insured employers. Critics argue the APMs were poorly structured, more costly to implement than potential shared savings payments and sometimes more focused on equity and DEI aims than actual savings.

The question is how the Mehmet Oz-Abe Sutten version of CMMI will approach its version of value-based care, given modest APM results historically and the administration’s focus on cost-cutting.

Context is key:

Recent efforts by the Trump Healthcare 2.0 team and its leadership appointments in CMS and CMMI point to a value-agenda will change significantly. Alternative payment models will be fewer and participation by provider groups will be mandated for several. Measures of quality and savings will be fewer, more easily measured and and standardized across more episodes of care. Financial risks and shared savings will be higher and regulatory compliance will be simplified in tandem with restructuring in HHS, CMS and CMMI to improve responsiveness and consistency across federal agencies and programs.

Sutton’s experience as the point for CMMI is significant. Like Adam Boehler, Brad Smith and other top Trump Healthcare 2.0 leaders, he brings prior experience in federal health agencies and operating insight from private equity-backed ventures (Honest Health, Privia, Evergreen Nephrology funded through Nashville-based Rubicon Founders). Sutton’s deals have focused on physician-driven risk-bearing arrangements with Medicare with funding from private investors.

The Trump Healthcare 2.0 team share a view that the healthcare system is unnecessarily expensive and wasteful, overly-regulated and under-performing. They see big hospitals and drug companies as complicit—more concerned about self-protection than consumer engagement and affordability.

They see flawed incentives as a root cause, and believe previous efforts by CMS and CMMI veered inappropriately toward DEI and equity rather than reducing health costs.

And they think physicians organized into risk bearing structures with shared incentives, point of care technologies and dependable data will reduce unnecessary utilization (spending) and improve care for patients (including access and affordability).

There’s will be a more aggressive approach to spending reduction and value-creation with Medicare as the focus: stronger alternative payment models and expansion of Medicare Advantage will book-end their collective efforts as Trump Healthcare 2.0 seeks cost-reduction in Medicare.

What’s ahead?

Trump Healthcare 2.0 value-based care is a take-no prisoners strategy in which private insurers in Medicare Advantage have a seat at their table alongside hospitals that sponsor ACOs and distribute the majority of shared savings to the practicing physicians. But the agenda will be set, and re-set by the administration and link-minded physician organizations like America’s Physician Groups and others that welcome financial risk-sharing with Medicare and beyond.

The results of the Trump Healthcare 2.0 value agenda will be unknown to voters in the November 2026 mid-term but apparent by the Presidential campaign in 2028. In the interim, surrogate measures for performance—like physician participation and projected savings–will be used to show progress and the administration will claim success. It will also spark criticism especially from providers who believe access to needed specialty care will be restricted, public and rural health advocates whose funding is threatened, teaching and clinical research organizations who facing DOGE cuts and regulatory uncertainty, patient’s right advocacy groups fearing lack of attention and private payers lacking scalable experience in Medicare Advantage and risk-based relationships with physicians.

Last week, the American Medical Association named Dr. John Whyte its next President replacing widely-respected 12-year CEO/EVP Jim Madara. When he assumes this office in July, he’ll inherit an association that has historically steered clear of major policy issues but the administration’s value-based care agenda will quickly require his attention.

Physicians including AMA members are restless:

At last fall’s House of Delegates (HOD), members passed a resolution calling for constraints on not-for-profit hospital’ tax exemptions due to misleading community benefits reporting and more consistency in charity care reporting by all hospitals.

The majority of practicing physicians are burned-out due to loss of clinical autonomy and income pressures—especially the 75% who are employees of hospitals and private-equity backed groups. And last week, the American College of Physicians went on record favoring “collective action” to remedy physician grievances. All impact the execution of the administration’s value-based agenda.

Arguably, the most important key to success for the Trump Healthcare 2.0 is its value agenda and physician support—especially the primary care physicians on whom the consumer engagement and appropriate utilization is based. It’s a tall order.

The Trump Healthcare 2.0 value agenda is focused on near-term spending reductions in Medicare. Savings in federal spending for Medicaid will come thru reconciliation efforts in Congress that will likely include work-requirements for enrollees, elimination of subsidies for low-income adults and drug formulary restrictions among others. And, at least for the time being, attention to those with private insurance will be on the back burner, though the administration favors insurance reforms adding flexible options for individuals and small groups.

The Trump Healthcare 2.0 value-agenda is disruptive, aggressive and opportunistic for physician organizations and their partners who embrace performance risk as a permanent replacement for fee for service healthcare. It’s a threat to those that don’t.

Insurers and Private Equity Look to Join Forces to Further Consolidate Control of Americans’ Access to Health Care

Posted on by • Posted in 2024 Election Issues, Access, Antitrust, Health Insurance Industry, Medicare, Medicare Advantage, Monopoly, Monopoly Behavior, Out of Network, Patient Referrals, Pharmacy Benefits Management, Physician Acquisition, Physician Employment, Physician Specialist, Private Equity • Leave a comment
https://healthcareuncovered.substack.com/p/insurers-and-private-equity-look?utm_source=post-email-title&publication_id=255152&post_id=145798815&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

With both Republicans and Democrats taking on these Goliaths individually, this could be a watershed moment for bi-partisan action.

The push and pull between providers and insurance companies is as old as our health payment system. Doctors have long argued insurers pay too little and that they too often interfere in patient care.

Dramatic increases in prior authorization, aggressive payment negotiations and less-generous reimbursement to doctors by Medicare Advantage plans show there’s little question the balance of power in this equation has swung toward payers.

These practices have led some doctors to look for outside investment, namely private equity, to keep their cash flow healthy and their operations functional. The trend of private equity acquisitions of physician practices is worthy of the federal scrutiny it has attracted. Insurers have noticed this trend, too, and appear ready to propose a profitable partnership.

Bloomberg recently reported that CVS/Aetna is looking for a private equity partner to invest in Oak Street Health, the primary care business CVS acquired for $9.5 billion last year. Oak Street is a significant player in primary care delivery, particularly for Americans on Medicare, with more than 100 clinics nationwide. CVS is said to be exploring a joint venture with a private equity firm to significantly expand Oak Street’s footprint and therefore also expand the parent corporation’s direct control over care for millions of seniors and disabled Americans across hundreds of communities.

Republicans have led scrutiny of pharmacy benefit managers on Capitol Hill. And Democratic attacks on private equity in health care have recently intensified. I hope, then, that both parties would find common ground in being watchful of a joint venture between private equity and one of the country’s largest PBMs, Caremark, also owned by CVS/Aetna.

The combination of health insurers and PBMs over the last decade – United Healthcare and Optum; CVS/Aetna and Caremark, and Cigna and Express Scripts – has increasingly handed a few large corporations the ability to approve or deny claims, set payment rates for care, choose what prescriptions to dispense, what prescriptions should cost, and how much patients must pay out-of-pocket for their medications before their coverage kicks in.

As enrollment in Medicare Advantage plans has grown to include a majority of the nation’s elderly and disabled people, we have seen insurers source record profits off the backs of the taxpayer-funded program. But in recent months, insurers have told investors they have had higher than expected Medicare Advantage claims – in particular CVS/Aetna, which took a hammering on Wall Street recently because its Medicare Advantage enrollees were using more health care services than company executives had expected.

It is natural, then, that one of the largest insurer-owned PBMs is looking to expand its hold on primary care for older Americans. Primary care is often the gateway to our health care system, driving referrals to specialists and procedures that lead to the largest claims insurers and their employer customers have to pay. By employing a growing number of primary care providers, CVS/Aetna can increasingly influence referrals to specialists and therefore the care or pharmacy benefit costs those patients may incur.

Control of primary care doctors holds another benefit for insurers: determination of what primary care doctor a patient sees.

People enrolled in an Aetna Medicare Advantage or employer-sponsored plan may find that care is easier to access at Oak Street clinics. Unfortunately, while that feels monopolistic and ethically alarming, this vertical integration has received relatively little scrutiny by lawmakers and regulators.

No law prevents an insurance company or PBM from kicking doctors it does not own out of network while creating preferential treatment for doctors directly employed by or closely affiliated with the corporate mothership.

In fact, the system largely incentivizes this. And shareholders expect insurers to keep up with their peers. As UnitedHealth Group has become increasingly aggressive in its acquisitions of physician practices – now employing or affiliated with about one in ten of the nation’s doctors – it has also become increasingly aggressive in its contract negotiations with physicians it does not control, particularly the specialists who depend on the referrals that come from primary care physicians.

That’s another area where looking to expand Oak Street Health makes smart business sense for CVS/Aetna. Specialist physicians are historically accustomed to higher compensation than primary care doctors and are used to striking hard-fought deals with insurers to stay in-network.

By controlling the flow of primary care referrals to specialists, CVS/Aetna can control what insurers have long-desired greater influence over: patient utilization. As a key driver of referrals to specialists in a specific market, CVS/Aetna will have even more power in contract negotiations with specialists.

As Oak Street’s clinics grow market share in the communities they serve, specialists in that market will feel even more pressured to stay in-network with Aetna and to refer prescriptions to CVS pharmacies. That has the dual benefit for CVS/Aetna of helping to predict what patients will be treated for once they go to a specialist and control over what the insurer will have to pay that specialist.

With different corporate owners, this sort of model could easily run afoul of the federal Anti-Kickback Statute and Stark Law.

No doctor or physician practice is allowed to receive anything of value for the referral of a patient. But that law only applies when there is separate ownership between the referring doctor and the specialist.

CVS/Aetna would clearly be securing value – in the form of lower patient utilization and effective reimbursement rates – under this model. But with Oak Street owned by CVS/Aetna and specialists forced to agree to lower reimbursement rates through negotiations with an insurer that appears separate from Oak Street, there’s no basis for a claim under the Stark Law. There may be antitrust implications, but those are more difficult and take longer to prove – and the fact the federal government cleared CVS/Aetna to acquire Oak Street Health last year wouldn’t help that argument.

This model is already of concern, which is why I continue to urge examination of increasing insurer control of physicians across the country. Their embrace of private equity to accelerate this model is truly alarming. And given Democrats’ recent focus on private equity in health care, they should work with their Republican colleagues who are rightly alarmed about the increasingly anti-competitive, monopolistic health insurance industry.

Is Corporatization Killing Primary Care?

Posted on by • Posted in Corporatization of Primary Care, High Value Care, Physician Employment, Physician Incentives, Physician Independence, Primary Care, Primary Care Delivery Model, Quality of Care • Leave a comment

One emerging model brings hope for independent primary care in a rapidly transforming healthcare landscape.

More than 48% of all U.S. physician practices and nearly 70% of physicians are now owned or employed by either hospitals or corporate entities, according to the latest research.

Add to this shift the recent news of Amazon’s new One Medical benefit, billed as delivering access to high-quality primary care and 24/7 on-demand virtual care to the company’s more than 160 million Prime subscribers, and it’s clear that the corporatization of primary care is showing no signs of slowing.

As two primary care physicians committed to providing the best possible care for our patients, we have a front-row seat to the threat that corporatization poses to the very essence of independent primary care. We also have hope.

One emerging model is successfully embracing the tenets of independent primary care, shining a light on the path to better patient health in a rapidly transforming healthcare landscape.

Defining high-value primary care  

High-value primary care relies on maintaining its independence. Independent primary care physicians (PCPs) excel at providing personalized care by fostering meaningful relationships with patients, ensuring that medical decisions are tailored to individual needs, and focusing on prevention to avoid health catastrophes and improve overall health. They often integrate with community leaders, influence local health policy, and mobilize community resources to help patients facing socioeconomic challenges.

In the independent setting, patients of these PCPs benefit from a continuous relationship with the same PCP over time, leading to better health outcomes born of a deeper understanding of their unique healthcare needs.

Notably, these PCPs (and their patients) are less likely to be influenced by the economic incentives that perversely drive patients back to hospitals and health systems in search of expensive but preventable or unnecessary care.

In fact, primary care owned or employed by a hospital is often seen as a loss leader for downstream revenue generators. Hospital-based PCPs are also more likely than their independent peers to experience a loss of autonomy over patient care decisions.

A recent survey from the Physicians Advocacy Institute found that 60% of physicians believe that the trend away from private practice ownership has reduced care quality, largely due to a lack of clinical autonomy and an increased focus on cost savings by facility leadership. These collective factors are obstacles to the sacred physician-patient relationship in service of a hospital-driven agenda and slow-moving bureaucracy.

Collaboration over corporatization

Maintaining independence in primary care has become increasingly difficult due to powerful industry headwinds that often lead previously independent practice owners to sell their businesses in defeat. Fortunately, PCPs have more options beyond joining hospitals, health systems, or emerging corporatized healthcare, where financial and operational pressures can form barriers to better care.

Collaborative primary care networks, also known as “enablers,” are entities that combine the strengths of independent primary care with the bargaining power and economies of scale associated with larger corporations. These network groups offer a viable way for practices to maintain independence by working together under a federated body to pool resources and improve infrastructure, thereby reducing administrative burden on the practice and bringing in new technologies and care coordination capabilities. These enablers also help independent practices negotiate collectively to secure better payer contracts, which ensure sustainable revenue streams without sacrificing their patient-centered approach. 

Collaborative primary care networks are effective because they embrace the power of consolidation crucial to the success of corporatized care models while preserving practice autonomy, divorced from upstream economic incentives, which place patient care at risk. Such groups are financially rewarded for keeping patients healthy and out of the hospital, which is ultimately what independent primary care does best. 

Incentivizing value alignment 

Only time will reveal Amazon’s impact on care, but the rise of corporate primary care doesn’t have to spell the death of patient-centered care. What we do know is that primary care innovations deliver true value only when the right incentives are in place, as demonstrated by independent primary care. 

When corporatized primary care organizations function independent of misaligned financial incentives, success can instead be defined through health and well-being. When aligned with the values of independent primary care, corporatized primary care can invest in robust multidisciplinary teams, focus on preventive care, and use technology to improve efficiency in a new model of care delivery that combines the best of what corporate and independent primary care each have to offer.

When independence is maintained, high-quality, personalized primary care will retain a meaningful place within the U.S. healthcare system and continue to help patients live healthier, longer lives. And that gives these two veteran physicians more hope for a brighter future.

Healthcare winners and losers after FTC bans non-compete clauses

Posted on by • Posted in Competition, Federal Trade Commission (FTC), Health System, Hospital, Hospital Industry, Non-Compete Agreements, Operating Margin Drivers, Outpatient Care, Outpatient Clinic Model, Outpatient Revenue, Physician, Physician Compensation, Physician Contracts, Physician Employment, Primary Care • Leave a comment

https://www.linkedin.com/pulse/copy-healthcare-winners-losers-after-ftc-bans-clauses-pearl-m-d–lidic/

With a single ruling, the Federal Trade Commission removed the nation’s occupational handcuffs, freeing almost all U.S. workers from non-compete clauses. The medical profession will never be the same.

On April 23, the FTC issued a final rule, affecting not only new hires but also the 30 million Americans currently tethered to non-compete agreements. Scheduled to take effect in September—subject to the outcome of legal challenges by the U.S. Chamber of Commerce and other business groups—the ruling will dismantle longstanding barriers that have kept healthcare professionals from changing jobs.

The FTC projects that eliminating these clauses will boost medical wages, foster greater competition, stimulate job creation and reduce health expenditures by $74 billion to $194 billion over the next decade. This comes at a crucial moment for American healthcare, an industry in which 60% of physicians report burnout and 100 million people (41% of U.S. adults) are saddled with medical bills they cannot afford.

Like all major rulings, this one creates clear winners and losers—outcomes that will reshape careers and, potentially, alter the very structure of U.S. healthcare.

Winners: Newly Trained Clinicians

Undoubtedly, the FTC’s ruling is a win for younger doctors and nurses, many of whom join hospitals and health systems with the promise of future salary increases and more autonomy. However, by agreeing to stringent non-compete clauses, these newly trained clinicians have little choice but to place their trust in employers that, shielded by air-tight agreements, have no fear of breaking their promises.

Most newly trained clinicians enter the medical job market in their late 20s and early 30s, carrying significant student-loan debt—nearly $200,000 for the average doctor. Eager for stable, well-paying positions, these young professionals quickly settle into their careers and communities, forming strong relationships with friends and patients. Many start families.

But when these clinicians realize their jobs are falling short of the promises made early on, they face a tough decision: either endure subpar working conditions or uproot their lives. Taking a new job 25 or 50 miles away or moving to a different state are often are only options to avoid breaching a non-compete clause.

In a 570-page supplement to its ruling, the FTC published testimonials from dozens of healthcare professionals whose lives and careers were harmed by these clauses.

“Healthcare providers feel trapped in their current employment situation, leading to significant burnout that can shorten their career longevity,” said one physician working in rural Appalachia.

By banning non-competes, the FTC’s rule will boost career mobility for all clinicians within their own communities. This change will likely spur competition among employers—leading to improved pay and benefits to attract and, equally important, retain top talent. And with the reassurance that they can easily switch jobs if their current employer falls short of expectations, clinicians will enjoy greater professional satisfaction and less burnout.

Winners: Patients In Competitive Markets

Benefits that accrue to doctors and nurses from the FTC’s ban will translate directly to improved outcomes for patients. For example, we know that physicians who report symptoms of burnout are twice as likely to commit a serious medical error. Studies have shown the inverse is true, as well: healthcare providers who are satisfied with their jobs tend to have lower burnout rates, which is positively correlated with improved patient outcomes.

Once freed from restrictive non-compete clauses, many clinicians will practice elsewhere within the community. To attract patients, they will have to offer greater access, lower prices and more personalized service. Others with the freedom to choose will join outpatient centers that offer convenient and efficient alternatives for diagnostic tests, surgery and urgent medical care, often at a fraction of the cost of traditional hospital services. In both cases, increased competition will give patients improved medical care and added value.

Losers: Large Health Systems

Large health systems, which encompass several hospitals in a geographic area, have traditionally relied on non-compete agreements to maintain their market dominance. By barring high-demand medical professionals such as radiologists and anesthesiologists from joining competitors or starting independent practices, these systems have been able to suppress competition and force insurers to pay more for services.

Currently, these systems can demand high reimbursement rates from insurers while also maintaining relatively low wages for staff, creating a highly profitable model. Yale economist Zack Cooper’s research shows the consequence of the status quo: prices go up and quality declines in highly concentrated hospital markets.

The FTC’s ruling challenges those conditions, potentially dismantling monopolistic market controls. As a result, insurers will no longer be forced to contend with a single, dominant provider. And with health systems pushed to offer better wages and benefits to retain their top talent, bottom lines will shrink.

While nonprofit hospitals and health systems are not currently under the FTC’s jurisdiction, the agency has pointed out that these facilities might be at “a self-inflicted disadvantage in their ability to recruit workers.” Moreover, as Congress intensifies scrutiny on the nonprofit status of U.S. health systems, hospitals that do not voluntarily align with the FTC’s guidelines may find themselves compelled to do so through legislative actions.

Losers: Hospital Administrators

Individual hospitals have faced a unique challenge over the past decade. Across the country, inpatient numbers are falling, which makes it harder for hospital administrators to fill beds overnight. This trend has been driven by advancements in medical technology and new practices that enable more outpatient procedures, along with changes in insurance reimbursements favoring less costly outpatient care. As a result, hospital administrators have been compelled to adapt their financial strategies.

Nowadays, outpatient services account for about half of all hospital revenue. These range from physician consultations to specialized procedures like radiological and cardiac diagnostics, chemotherapy and surgeries.

Medicare and other insurers typically pay hospitals more for these outpatient services than they pay local doctors and other facilities. Knowing this, hospitals are hiring community doctors and acquiring diagnostic and procedural facilities, then boosting profitability by charging the higher hospital rates for the same services.

Hospital administrators know that this strategy only works if the newly hired clinicians are prohibited from quitting and returning to practice within the same community. If they do, their patients are likely to go with them. This is why the non-compete clauses are so essential to a hospital’s financial success.

As expected, the American Hospital Association opposes the FTC’s rule, arguing that non-compete clauses protect proprietary information. In practice, most of the doctors affected by the ban are providing standard medical care and have no proprietary knowledge that requires protection.

Looking Ahead

Today’s hospital systems are starkly divided between haves and have-nots. Facilities in affluent areas often enjoy high reimbursement rates from private insurers, boosting financial success and administrator salaries. In contrast, rural hospitals grapple with low patient volumes while facilities in economically disadvantaged, high-population areas face greater financial difficulties.

The current model is not working. The old ways of doing things—enforcing non-competes, charging higher fees for identical services and promoting market consolidation to hike prices—are not sustainable solutions.

The abolition of non-compete agreements will produce both winners and losers. In the healthcare sector, the ultimate measure of a policy’s impact should be its effect on patients—and the overwhelming evidence suggests that eliminating these clauses will benefit them greatly.

Chasing downstream margin over downstream revenue

Posted on by • Posted in Health System, Hospital, Hospital Industry, Labor Spend Management, Operating Expenses, Operating Margin, Operating Margin Drivers, Physician Compensation, Physician Downstream Margins, Physician Employment, Physician Incentives, Physician Productivity, Physician Reimbursement • Leave a comment

https://mailchi.mp/fc76f0b48924/gist-weekly-march-1-2024?e=d1e747d2d8

A recent engagement with a health system executive team to discuss an underperforming service line uncovered a serious issue that’s becoming more common across the industry. 

“Our providers are more productive than ever,” the CFO informed our team, “and yet we keep losing money on the service line.” 

After digging into their physician compensation model, we came upon one source of the system’s issue. Because it was incentivizing physician RVUs equally across all payers, its providers responded, quite rationally, by picking up market share where growth was easiest: Medicaid patients, who weren’t generating any margin. 

“We recognize that we’ve been employing these physicians as loss leaders in order to generate downstream revenue,” the CFO shared, “but what’s the point of that revenue if there’s no longer any downstream margin?”
 


The economics of physician employment becomes a tough conversation very quickly; it’s a sensitive topic to many, and one with myriad facets. 

But the loss leader physician employment model obviously only works when it produces positive downstream margins. 

We’re in a critical window of time, where hospital margins are just beginning to recover as volumes return—but those volumes are not necessarily in the same places as before. 

The opportunity is ripe for systems to work closely with their aligned physicians to reexamine the post-pandemic margin picture for individual service lines and ensure incentives are aligning all parties to hit operating margin goals. 

Are these kinds of conversations taking place at your health system?

Allina Health doctors unionize over health system’s objections

Posted on by • Posted in Doctors Council Service Employees International Union (SEIU), Health System, Hospital, Hospital Industry, Labor Organizing, Labor Relations, Labor Spend Management, Labor Union, Labor Union Grievance, Patient Safety, Physician Burnout, Physician Employment, Physician's Labor Union • Leave a comment
https://www.healthcaredive.com/news/allina-health-doctors-union/704751/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202024-01-17%20Healthcare%20Dive%20%5Bissue:58245%5D&utm_term=Healthcare%20Dive

Dive Brief:

  • The National Labor Relations Board has certified the union election of more than 130 Allina Health doctors at Mercy and Unity Hospitals, nearly a year after they voted to join the Doctors Council Service Employees International Union (SEIU).
  • The certification follows objections from the Minneapolis-based nonprofit health system, which said that physicians active in the union drive held supervisor or managerial positions and may have unlawfully pressured colleagues into supporting the union. The NLRB rejected that claim.
  • It’s another victory for Doctors Council SEIU at Allina facilities. In October, more than 500 Allina doctors, physician assistants and nurse practitioners at over 60 facilities voted to join the union, according to NLRB documents.

Dive Insight:

Allina doctors and physician assistants said that chronic understaffing, high levels of burnout and compromised patient safety due to the corporatization of care motivated them to seek union representation.

“We have been seeing the shift of healthcare control going to corporations and further and further away from patient voices and patient advocacy. That really fell apart during the pandemic,” said Allina physician Liz Koffel during a press conference on Aug. 15 announcing primary care physicians’ unionization drive.

Koffel detailed workplace grievances that she said occurred due to Allina’s push for profits, including high productivity demands backed by few support staff and the health system’s now-abandoned policy of interrupting non-emergency medical care for patients with high levels of debt. 

In a statement to Healthcare Dive, an Allina spokesperson said the system had “committed to taking steps to make sure the National Labor Relations Board’s process was fair to all involved,” and that it would not take further procedural action against the union.

Across the country, physicians’ feelings of limited autonomy is driving similar interest in unionization, according to John August, director of healthcare labor relations at Cornell’s School of Industrial and Labor Relations. 

“Frankly, I’ve never seen anything like it in my whole career — where so many people are saying exactly the same thing at the same time, from a profession that heretofore has been essentially not unionized,” he said.

Although doctors have historically shown little interest in unionization — the physician unionization rate was under 6% nationwide in 2021 — the tide is beginning to turn. 

Doctors are increasingly working in consolidated hospitals owned by larger health systems or private equity firms. They report consolidation limits the influence they have on their day-to-day jobs, according to a December study from the Physician Advocacy Institute.

In addition, other options, such as physician-owned practices, are disappearing, with the percentage of owned practices falling 13% between 2012 and 2022, according to an analysis from the American Medical Association.

Elsewhere in the healthcare industry, unionization and strikes have led to gains for workers.

Last year, nurses at Robert Wood Johnson University Hospital successfully negotiated nurse-to-patient ratios by holding the picket line for nearly four months in New Jersey, and more than 75,000 healthcare workers secured a 20% raise over four years at Kaiser Permanente by staging the largest healthcare strike in recent history.

I’m Glad I’m not a California Hospital or Practice Administrator…

Posted on by • Posted in Competition, Health System, Hospital, Hospital Industry, Law, Non-Compete Agreements, Physician Compensation, Physician Contracts, Physician Employment, Retention, Talent Competition, Talent Management, Talent Pipelines • Leave a comment
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On January 1st, 2024 #AB1076 and #SB699, two draconian noncompete laws go into effect. It could put many #employedphysicians in a new position to walk away from #employeeremorse.

AB1076 voids non-compete contracts and require the employer to give written notice by February 14th, 2024 that their contract is void.

Is this a good or bad thing? It depends.

If the contract offers more protections and less risk to the employed physician, and the contract is void – does that mean the whole contract is void? Or is the non-compete voidable?

But for the hospital administrator or practice administrator, we’re about to witness the golden handcuffs come off and administrators will have to compete to retain talent that could be lured away more easily than in the past. But the effect of the non-compete is far more worrisome for an administrator because of the following:

The physicians many freely and fairly compete against the former employer by calling upon, soliciting, accepting, engaging in, servicing or performing business with former patients, business connections, and prospective patients of their former employer.

It could also give rise to tumult in executive positions and management and high value employees like managed care and revenue cycle experts who may have signed noncompete contracts.

If the employer does not follow through with the written notice by February 14th, the action or failure to notify will be “deemed by the statute to be an act of unfair competition that could give rise to other private litigation that is provided for in SB699.

The second law, SB699, provides a right of private action, permitting the former employees subject to SB699 the right to sue for injunctive relief, recovery of actual damages, and attorneys fees. It also makes it a civil violation to enter into or enforce a noncompete agreement. It further applies to employees who were hired outside California but now work in or through a California office.

What else goes away?

Employed physicians can immediately go to work for a competitor and any notice requirement or waiting period (time and distance provisions) are eliminated by the laws. So an administrator could be receiving “adios” messages on January 2nd, and watch market share slip through their fingers like a sieve starting January 3rd.

And what about the appointment book? Typically, appointments are set months in advance, especially for surgeons – along with surgery bookings, surgery block times, and follow up visits.

Hospitals may be forced to reckon with ASCs where the surgeons could not book cases under their non-compete terms and conditions. They could up and move their cases as quickly as they can be credentialed and privileged and their PECOS and NPPES files updated and a new 855R acknowledged as received.

Will your key physicians, surgeons and APPs leave on short notice?

APPs such as PAs and NPs could also walk off and bottleneck appointment schedules, surgical assists, and many office-based procedures that were assigned to them. They could also walk to a new practice or a different hospitals and also freely and fairly compete against the former employer by calling upon, soliciting, accepting, engaging in, servicing or performing business with former patients, business connections, and prospective patients of their former employer.

Next, let’s talk about nurses and CRNAs. If they walk off and are lured away to a nearby ASC or hospital, or home health agency, that will disrupt many touchpoints of the current employer.

Consultants’ contracts are another matter to be reckoned with. In all my California (and other) contracts, contained within them are anti-poaching provisions that state that I may not offer employment to one of their managed care, revenue cycle, credentialing, or business development superstars. Poof! Gone!

The time to conduct a risk assessment is right now! But many of the people who would be assigned this assessment are on holiday vacation and won’t be back until after January 1st. But then again, they too could be lured away or poached.

What else will be affected?

Credentialing and privileging experts should be ready for an onslaught of applications that have to be processed right away. They will not only be hit with new applications, but also verification of past employment for the departing medical staff.

Billing and Collections staff will need to mount appeals and defenses of denied claims without easy access they formerly had with departing employed physicians.

Medical Records staff will need to get all signature and missing documentation cleared up without easy access they formerly had with departing employed physicians.

Managed Care Network Development experts at health plans and PPOs and TPAs will be recredentialing and amending Tax IDs on profiles of former employed physicians who stand up their own practice or become employed or affiliated with another hospital or group practice. This comes at an already hectic time where federal regulations require accurate network provider directories.

The health plans will need to act swiftly on these modifications because NCQA-accredited health plans must offer network adequacy and formerly employed physicians who depart one group but cannot bill for patient visits and surgeries until the contracting mess is cleared up does not fall under “force majeure” exceptions. If patients can’t get appointments within the stated NCQA time frames, the health plan is liable for network inadequacy. I see that as “leverage” because the physician leaving and going “someplace else” (on their own, to a new group or hospital) can push negotiations on a “who needs whom the most?” basis. Raising a fee schedule a few notches is a paltry concern when weight against loss of NCQA accreditation (the Holy Grail of employer requirements when purchasing health plan benefits from a HMO) and state regulator-imposed fines. All it takes to attract the attention of regulators and NCQA are a few plan member complaints that they could not get appointments timely.

Health plans who operate staff model and network model plans that employ physicians, PAs and NPs (e.g., Kaiser and others who employ the participating practitioners and own the brick and mortar clinics where they work) are in for risk of losing the medical staff to “other opportunities.” These employment arrangements are at a huge risk of disruption across the state.

Workers Compensation Clinics that dot the state of California and already have wait times measured in hours as well as Freestanding ERs and Freestanding Urgent Care Clinics could witness a mass exodus of practitioners that disrupt operations and make their walk in model inoperative and unsustainable in a matter of a week.

FQHCs that employ physicians, psychotherapists, nurse practitioners and physician assistants could find themselves inadequately staffed to continue their mission and operations. Could this lead to claims of patient abandonment? Failed Duty of Care? Who would be liable? The departing physician or their employer?

And then, there are people like me – consultants who help stand up new independent and group practices, build new brands, rebrand the physicians under their own professional brands, launch new service lines like regenerative medicine and robotics, cardiac and vascular service lines, analyze managed care agreements, physician, CRNA, psychotherapist, and APP employment agreements. There aren’t many consultants with expertise in these niches. There are even fewer who are trained as paralegals, and have practical experience as advisors or former hospital and group practice administrators (I’ve done both) who are freelancers. I expect I will become very much in demand because of the scarcity and the experience. I am one of very few experts who are internationally-published and peer-reviewed on employment contracts for physicians.

Private equity-backed practices flexing market share muscle 

Posted on by • Posted in Antitrust, Federal Trade Commission, Federal Trade Commission (FTC), High Prices, Market Consolidation, Market Power, Market Trends, Mergers & Acquisitions, Physician, Physician Acquisition, Physician Aggregator, Physician Employment, Physician Practice Acquisition, Physician Specialist, Physician Staffing - Private Equity Backed, Private Equity • Leave a comment

https://mailchi.mp/d0e838f6648b/the-weekly-gist-september-8-2023?e=d1e747d2d8

This week we showcase data from a recent American Antitrust Institute study on the growth of private equity (PE)-backed physician practices, and the impact of this growth on market competition and healthcare prices. 

From 2012 to 2021, the annual number of practice acquisitions by private equity groups increased six-fold, especially in high-margin specialties. During this same time period, the number of metropolitan areas in which a single PE-backed practice held over 30 percent market share rose to cover over one quarter of the country. 

These “hyper-concentrated” markets are especially prevalent in less-regulated states with fast-growing senior populations, like Arizona, Texas, and Florida. 

The study also found an association between PE practice acquisitions and higher healthcare prices. In highly concentrated markets, certain specialties, like gastroenterology, were able to raise prices rise by as much as 18 percent. 

While new Federal Trade Commission proposals demonstrate the government’s renewed interest in antitrust enforcement, it may be too little, too late to mitigate the impact of specialist concentration in many states.  

Physician contracts are changing

Posted on by • Posted in Employee Compensation, Employee Incentive, Health System, Hospital, Hospital Industry, Physician, Physician Compensation, Physician Contracts, Physician Employment • Leave a comment
https://www.beckershospitalreview.com/compensation-issues/physician-contracts-are-changing.html?origin=RCME&utm_source=RCME&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

Shorter contracts, noncompete agreements and increased emphasis on value-based components are among the shifts occurring in physician contracts as hospitals and medical groups build recruitment pipelines and offer incentives to retain physicians. 

Changes in how physician contracts are layered echoes a trend that has been occurring in the labor market itself. Physicians are increasingly opting for employed opportunities and contracts within those models are changing accordingly. 

From 2019 to 2021, more than 108,700 physicians left private practice for employment opportunities, with 58,200 physicians joining hospitals. About three in four physicians are now employed by hospitals, health systems, private-equity-owned groups, payers or other corporate entities. 

The rising costs of private practice, increasing administrative burdens and reimbursement hurdles are also making solo practice a challenging model for many physicians today.

Fewer large medical groups are offering salaries with production bonuses, according to an AMN Healthcare report on physician and advanced practitioner recruiting incentives. The company’s 2017 report found that 75 percent of contracts featured a salary with production bonus, while only 17 percent had a straight salary.

Some medical groups have stopped offering production bonuses because they found that the straight salary model has less ambiguity and is less likely to cause friction with physicians, according to the report. 

AMN also found that a relatively high percentage of academic medical centers do not offer the salary with production bonus model, which may account for the decline in the use of this compensation structure in its report. 

Income guarantees, which are essentially loans that must be repaid generally (but can be forgiven over time) are used to establish physicians in solo or small independent practices. Income guarantees were once the standard contract model, but as the number of private practices has declined, so has the use of income guarantees, according to the report..

Health systems continue to rethink physician contracts as healthcare continues its shift away from fee for service, but challenges remain when it comes to compensation in these models. Systems at the forefront of this shift are developing ways to incentivize physicians in value-based care as the trend towards team-based compensation gains traction and fosters collaboration among providers.

Physicians lack trust in hospital leadership

Posted on by • Posted in Health System, Hospital, Hospital Industry, Leadership, Leadership Medical Staff, Leadership Physician, Leadership Physician Alignment, Leadership Transparency, Leadership Trust, Physician Employment, Physician Leadership, Transparency, Trust • Leave a comment

https://mailchi.mp/c02a553c7cf6/the-weekly-gist-july-28-2023?e=d1e747d2d8

A recent physician survey conducted by strategic healthcare communications firm Jarrard Inc. uncovered a startling finding: only 36 percent of physicians employed by or affiliated with not-for-profit health systems trust that their system’s leaders are honest and transparent. In contrast, a slight majority of physicians working with investor-owned health systems and practices answered that question in the opposite.

Overall, only around half of physicians trust their organization’s leaders when it comes to financial, operational, and patient care decision-making. Unsurprisingly, doctors put the most trust in peer physicians, by a wide margin.

The Gist: While the numbers, especially for nonprofit systems, are stark, this survey reflects an on-the-ground reality felt at health systems in recent years. Physician fatigue has spiked in the wake of the pandemic.

And health system-physician relationships are also being disrupted by cost pressures, payer and investor acquisitions, and the shift of care to ambulatory settings. We’ve heard from physicians that, compared to hospital owners, investor-backed systems provide greater transparency and clearer financial goals centered around the success of the business. 

That physicians trust their peers so highly suggests a path forward: provide physician leaders with greater transparency into system performance and agency over strategy, with clear goals and metrics.