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Hospitals hiring doctors to get ready for reform

 

Hospitals made disastrous decisions in the 1990s in hiring doctors. Now, they’re again buying physician practices — saying better management will make the difference this time.

 

Doctors from Baptist Health Medical Group at a meeting: Dr. Anthony Gonzalez, from left, Dr. Jack Ziffer, Dr. Juan-Carlos Verdeja and Dr. Jorge Rabaza.
Doctors from Baptist Health Medical Group at a meeting: Dr. Anthony Gonzalez, from left, Dr. Jack Ziffer, Dr. Juan-Carlos Verdeja and Dr. Jorge Rabaza.
TIM CHAPMAN / MIAMI HERALD STAFF

jdorschner@MiamiHerald.com

In the early 1990s, many hospitals across the country, including Baptist Health South Florida, started buying doctors’ practices. The purchases often proved to be disasters. Many doctors were not nearly as productive as employees as they were in their own practices. Baptist and other hospitals abandoned the idea.

Now, hospitals are at it again, convinced they’ll handle the physicians better this time around. Baptist in South Miami-Dade employs more than 100 doctors these days, while Holy Cross in Fort Lauderdale has hired about 150.

It’s a national trend. The American Hospital Association reports that the number of doctors working for hospitals has increased by 32 percent since 2000, a trajectory that’s accelerating as medical companies prepare for healthcare reform.

Some experts are skeptical. “It’s a very tricky business to buy physician practices,” says Stephen Dresnick, a Miami physician-entrepreneur who once specialized in that business. “You can’t buy them, put them on salary and expect their practices to be just as profitable as they always were.”

But others say hospitals have learned from their past failures. “We’re in an entirely different environment,” says Wayne Brackin, Baptist’s chief operating officer. Hospitals’ contracts with doctors are now written to reward productivity and quality of care “on multiple fronts.”

The hospitals’ motivations vary. Holy Cross is setting up an integrated care network of primary physicians and specialists scattered in offices around Broward County, a structure that could be converted into an accountable care organization, or ACO. ACOs, which reward positive outcomes for patients rather than the traditional fee-for-service model, are part of the federal healthcare reform act.

Baptist has a slightly different focus, concentrating on hiring doctors — called hospitalists when they are employed by the hospital — who treat patients in Baptist facilities, and on hiring surgeons and other specialists who fit particular hard-to-fill jobs, such as neurosurgeons. But Baptist, too, is getting ready for an integrated care, ACO-type system.

Sal Barbera, a former executive of physician services for the Tenet hospital chain, says most hospitals claim they are employing doctors to prepare for ACOs. “However, I believe much of this activity is to control physicians and keep them within their system. Building ACOs is a means to get there.”

Snapping up desirable doctors’ practices could offer hospitals a competitive advantage in the near future. With federal reform plans to reduce healthcare costs by paying for bundled care, rather than a fee for each individual service, the race is on to organize systems. In some parts of the country, insurance companies are the ones setting up networks. In other places, large doctors’ groups are trying to establish their own ACOs. Barbera and other experts say those who set up the biggest networks could come to dominate the new healthcare landscape.

In the early 1990s, the rush to buy doctors’ practices was driven by venture capitalists and healthcare companies intent on creating large corporations offering physician services. “We were thrown into an entirely defensive situation,” says Brackin. Some doctors pleaded with Baptist to take them over so they wouldn’t be gobbled up by impersonal national companies. Baptist also worried that if it had to deal with these big companies, it might have trouble getting doctors to be on call for its emergency rooms.

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