M.D. is no prescription for job security at hospital chains
Physicians who become employees are just as susceptible as other workers when hospitals are under pressure to cut costs. Just ask staffers at Edward-Elmhurst.
Stephanie Goldberg
Fifteen doctors are losing their jobs at Edward-Elmhurst Health clinics.
As more doctors go to work directly for hospitals, some are learning the hard way that long-term employment isn't guaranteed in a consolidating health care industry seeking to cut costs wherever possible.
Crain's has learned that about 15 doctors are losing their jobs at Edward-Elmhurst Health clinics, as the west suburban hospital chain shifts work to lower-paid nurse practitioners and physician assistants. The layoffs are part of a trend, with hospitals—and even large physician groups—making similar moves amid competition from retail clinics and pressure to restrain soaring health care spending.
Hospital chains see the shift as a way to offer quality care at a lower price. But for doctors on the payroll, it means less job security in a profession once largely immune to layoffs. For patients, it could mean lower bills but also reduced access to physicians—especially for less-serious ailments.
"Patients have made it very clear that they want less costly care and convenient access for lower-acuity issues," such as sore throats, Edward-Elmhurst said late last month in an internal memo announcing the shift.
Doctors at immediate care clinics operated by the three-hospital network aren't the only casualties of this trend. Pediatricians in Texas found themselves on the chopping block last year when MD Medical Group acquired a series of Children's Health clinics. Local media reported at the time that some sites would close and others would rely more heavily on nurse practitioners, causing dozens of doctors to lose their jobs.
Other health care networks, including Cleveland Clinic and Springfield, Pa.-based Crozer-Keystone Health System, have also cut doctors in recent years as part of cost-saving initiatives.
Not surprisingly, doctors groups object.
In a statement posted to its website, the American Academy of Emergency Medicine urged Edward-Elmhurst to reconsider the layoffs. "Urgent care centers, while created to serve lower acuity patients, do in fact see a significant number of patients who have serious medical problems," the statement says. "We therefore are concerned by the report that these physicians were fired in a cost-cutting move by Edward-Elmhurst Health."
When news of the layoffs hit social media, a firestorm erupted in medical circles. Droves of Twitter and Facebook users, most of whom identified themselves as doctors, criticized the local chain for looking to save money on salaries while potentially putting patients at risk. Others questioned whether savings would even be passed on to patients.
Doctors can expect more job cuts as consolidation reshapes health care and the ranks of skilled nurse practitioners grow. Expanding hospital chains are acquiring medical practices, turning doctors into employees. The share of U.S. physicians employed by hospitals rose to 44 percent from 26 percent between 2012 and 2018, according to a recent report from consulting firm Avalere Health and the Physicians Advocacy Institute. In the Midwest, 55 percent of doctors work for hospitals.
Hospital-employed physicians can become targets for layoffs as insurers press hospital chains to reduce costs. Hospitals are turning to nurse practitioners as a less-expensive alternative to well-paid doctors. From 2010 to 2017, the number of advanced practice nurses billing Medicare more than doubled to 212,000, according to the independent federal Medicare Payment Advisory Commission.
"Hospitals, ambulatory surgical centers and others are increasingly looking at (nurse practitioners) as qualified alternatives to physicians," says David Hebert, CEO of the American Association of Nurse Practitioners.
CUTS BY APRIL
Sources close to Edward-Elmhurst say the 15 doctors will lose their jobs by April, when advanced practice nurses take over at certain immediate care sites—likely five of the network's seven locations.
"We continue to assess our care delivery models in the interest of providing cost-effective care to our patients," hospital spokesman Keith Hartenberger says in an emailed statement. "We shared with physicians that we have plans to change the model next year at some outpatient sites and are working with anyone affected to find alternative placement. Those plans have not been finalized or approved."
Chad Beste, a partner at BDO's Healthcare Advisory Practice, says "Edward-Elmhurst is responding to the market and saying, if the reimbursement levels are fixed and this is what consumers want, we will design a lower cost structure/mode of treatment. . . .A lot of these urgent care facilities, you have to see a high volume of patients to break even with an M.D."
Health insurers support the shift, which began as a way to increase access to care in rural areas. While Medicare pays 85 percent of the physician rate when medical services are billed by nurse practitioners and physician assistants, rates set by private insurers vary.
It's unclear whether patients who visit Edward-Elmhurst's immediate care clinics will see their costs drop as a result of the shift.
While some hospitals follow the retail clinic model and replace doctors with advanced practice nurses, others favor a so-called team-based approach to care, in which a group of providers—including a doctor, in many cases—work collaboratively to treat patients.
In the internal memo, Edward-Elmhurst said the "highly trained" advanced practice nurses staffing its immediate care clinics will work closely with emergency department physicians. It did not say whether such physicians would be present at the clinics.
NorthShore University HealthSystem is among chains transitioning to team-based care "to expand access and also really elevate care," says Dr. Lakshmi Halasyamani, chief quality and transformation officer for the four-hospital network. NorthShore says the shift will not result in physician layoffs.
"It's a misnomer to think the only driver for this shift is cost," she says, noting that advanced practice providers are better at following protocols and communicating than some physicians.
Still, she acknowledges pressure from insurers has led hospitals to rethink their operations. "When you are faced with a situation where you've got to generate more value and your reimbursement to generate that value is shifting," she says, "it forces you to take a look at the ingredients—who's on your team?"
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