By: Craig Allan Ahrens
The Business of Healthcare
A talk show and discussion forum dedicated to the strategic issues impacting the business of healthcare

It is like "Back to the Future" all over again...by the way who said that quote because I have been using that a lot lately. Anyway, physician employment is getting really, really hot again as a strategy for health systems. It is interesting because many of the lemmings that jumped into employment in the 90s jumped back out. However, for the lemmings that I know who didn't leap off the mountain after taking the first plunge, some have gotten very good at managing the employment of physicians. What is even more interesting is that the organizations that I am aware of who have pulled physician employment off well have for the most part solidified their strategic positions in their respective markets. Well, if you employ your distribution channel and run it effectively, then it is pretty hard to crack. Right?

Believe me I am not waving the flag of employment for everyone. More than most, I am intimately aware that each market has its individual quirks. The competitive pressures that led to physician employment by hospitals are different today than in the 90s. Back in the good old 90s, everyone thought managed care was coming and the chickens listened to chicken little and started the massive primary care employment trend. The providers that did a good job of managing those physicians have realized advantages against today's competitive pressures that many did not anticipate years ago.

Today, the competitive pressure are not a "coming soon" fear like in the 90s; rather they are a reality forcing systems to strongly pursue employment. Some examples include:

1. Declining physician reimbursement by the government.
2. Increased outpatient competition by physicians.
3. High cost of malpractice insurance.
4. Physicians' desire to "have a life".
5. Severe shortages in key specialties.

I'm sure there are a multitude of other reasons and I look forward to your thoughts. Maybe hospitals should start putting a line item in their financials called physician capital expense?

By the way, look for the next podcast on the "The Business of Healthcare" website or on the Itunes store under the Business of Healthcare. Our guest will be Parveen Chand, who is a facilities and business development planning executive for BJC Health System's Barnes Jewish St. Peter's hospital in St. Louis, Missouri. We will be discussing their innovative approach to facilities planning and budgeting. It should be uploaded by Wednesday October 11th, 2006.

If any of you have any ideas, people, or topics that you think that would be interesting for the "The Business of Healthcare" podcast, please email me at info@thebusinessofhealthcare.com.

Thank you.

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Most recent podcasts:

Show 7: Roundtable Discussion with Three Healthcare Leaders: Strategic Issues - A Midwest, East Coast and West Coast Perspective
Show 6: Service Line Success and the Strategic Impact of the Rebasing of DRGs
Show 5: Orthopedic Service Line Planning
Show 4: Neurosciences Planning for Healthcare Institutions
Show 3: Human Resources as the Critical Hospital Strategic Partner?
Show 2:Patient Satisfaction and Customer Service as a Hospital's Strategic Priority
Show 1: Surviving and Thriving as an Independent Hospital in a Competitive Market

Mr. Ahrens is a healthcare strategy consultant at ECG Healthcare's Midwest office with expertise in general hospital strategic planning, operational turn-arounds, physician business development, and service line planning. You can reach him at info@thebusinessofhealthcare.com.