Healthcare Reform Pits Physicians Against Hospitals

Margaret Dick Tocknell, for HealthLeaders Media , April 21, 2011

Hospital leaders, however, aren't willing to cede to those demands just yet. Hospital leaders interviewed by PwC HRI for the report were of the opinion that most physicians lack the business management and leadership skills needed to be effective in positions of leadership and governance. The good news is that some hospital systems are providing continuing education to help physicians develop management skills.

About 66% of the physicians surveyed said they can devote time to leadership and management activities. To make sure they meet those obligations once they take them on, more providers are paying doctors to serve on committees and participate in administrative activities, especially to help create buy-in for new quality programs and cost reduction initiatives. Hospital leaders said they need physicians to not only help reduce supply and infrastructure cost, but also to generate additional revenue.


Physicians are very aware that healthcare is moving toward a payment approach that rewards doctors and hospitals for quality results over volume. In looking at compensation, physicians said that half of their compensation should be fixed salary with the remainder based on meeting a combination of productivity, quality, patient satisfaction, and cost-of-care goals, with upside earning potential for performance.

In HRI interviews hospital leaders said they are developing compensation models that will benefit their overall system. They acknowledge that physicians will be the key drivers in meeting clinical quality standards set for ACO participation. Providing the right mix of compensation could help hospitals increase revenue and avoid financial penalties.

In other compensation findings:
  • Some 45% of physicians who are considering hospital employment would expect to be paid more than they are now with increases ranging from 1.7% to 4.7% percent.
  • Some 38% said they would expect no salary change.
  • Expectations for compensation varied by physician specialty, with pediatrics, psychiatry and cardiology expecting the largest increase at 4.7%, 3.6% and 3.5%, respectively. General surgery, oncology, and emergency medicine expect the least at 1.9%, 1.7% and 1.7%, respectively.
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