Slow ROI with Newly Hired Physicians

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As the Affordable Care Act (ACA) continues to push physician reimbursement towards a value-based payment program, a majority of CFOs have begun to temper expectations with new physicians due to the fact that most are hired for improvements in quality rather than productivity. A surveyrecently conducted by the Healthcare Financial Management Association (HFMA) illustrates this by showcasing that only 25 percent expect to see positive returns within a physician’s first two years on the job.

The lowered expectation of a newly hired physician demonstrates a “changing of the guard” in the healthcare marketplace. Previously, short-term results of volume were key to a physician’s net worth at a hospital. Now, that mindset has been shifted towards cost reduction and building value. In the long run, the latter will create more dividends under ACA programs since benefits of new physician hires will show up in the form of improved care coordination, patient referrals, and market share. Hence, HFMA researchers encourage value assessments of physicians, rather than the traditional “loss per physician” measures.


Has there been a paradigm shift with your hospital’s new hires as well? Have you seen any drawbacks to this shift in the operating room? Or have there been improvements? As the healthcare landscape continues to develop around the ACA programs, we will continue to monitor changes like this, and alter our own expectations with the clients in which we serve.

Kevin O'HaraResearchComment