Employed vs Self-employed Physicians: Who's Happier? These Are the Tradeoffs

Leigh Page


June 14, 2016

In This Article

Employed Physicians Are Lukewarm About Productivity Targets, Bonus Formulas

Employed physicians continue to be ambivalent about productivity targets that apply to a portion of their compensation, but they do seem to be getting used to them somewhat. Among those who have such targets, 44% were satisfied with them—5 percentage points higher than in 2014.

Marc Mertz reports that many physicians are still struggling to meet the targets. "Physicians will be unhappy if they have to put up with operational inefficiencies that make it hard to reach their targets," he says.

Greg Mertz thinks many employed physicians start out practicing inefficiently. "Many of them came either from practices that were losing money owing to inefficiencies, or from training programs where they had low patient volumes," he says. He attributes the slight increase in satisfaction to "management doing a better job to explain how income and expenses are related."

The survey also picked up a significant amount of dissatisfaction among employed physicians about bonus structures in their compensation formulas. Less than one half (49%) of those who have such arrangements are satisfied with them.

"Some employed physicians feel that their bonus arrangements are simply not attainable," Greg Mertz says, adding that hospitals can improve satisfaction by getting doctors' input in formulating the bonuses.

"Physicians don't want their bonuses tied to factors they don't think are relevant," Marc Mertz says. "If physicians don't have a real role in putting a bonus structure together, they just don't believe in it. They want a say over how the bonus structures are determined, which measures to use, how the data are collected, and the accuracy of the data."

Despite the concerns about compensation formulas, concerns among employed physicians about having a limited income potential declined by 10 points since the 2014 survey, although they were still cited by one third (34%) of respondents.

"Hospitals can pay very attractive wages," Greg Mertz says, "but self-employed physicians can make more money through ancillary services, which are not available to employed physicians."

Employed Physicians Often Disagree With Employers' Decisions

Many employed physicians disagreed with their employer over decisions involving patient care (42%) and workplace policy (57%).

Both Greg and Marc Mertz assert that hospitals don't directly interfere with patient care, but they concede that some of their rules may do so indirectly. Hospitals "don't get involved in clinical matters, but they do impose restrictions that can affect care," such as requiring proof that a patient needs to be admitted, Greg Mertz says.

Greg Mertz adds that in the future, more hospitals may get involved more directly in clinical decisions. "Evidence-based guidelines are in their infancy, but that's where practice is going," he says.

In workplace policies, one common point of disagreement is dealing with staff, Greg Mertz says. "Employed physicians can't just fire staff, like an independent physician can do," he says. "The matter has to go through the human resources department."

He says that other sources of unhappiness are deadlines for turning in medical records, which may result in pay cuts, and inflexible work schedules. "Employed physicians are experiencing a greater push toward standardization," he observes.

Marc Mertz also mentions disagreements with the organization over equipment purchases, EHR selection and implementation, and billing and collection policies.


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