5 Observations on Physician Employment & Recruitment From Dr. Richard Kube

Richard Kube, MD, CEO, founder and owner of Prairie Spine and Pain Institute in Peoria, Ill., discusses five trends impacting physician employment and surgery center investor recruitment this year.

1. Employed primary care physicians are cutting off referrals to surgery centers. Dr. Kube says in his area, hospital employment has concentrated mainly on primary care physicians, posing a threat to specialist referrals in the long term. He says that while hospitals should technically not be able to dictate where treatment occurs, employed primary care physicians frequently push specialists to perform cases at the hospital.

"It's more physician-driven than facility-driven, even though the facility is still probably behind it at the end of the day," he says. He says physicians who bring their cases to the local surgery center are likely to receive a call from the referring primary care physician, asking why the case was not brought to the hospital. Dr. Kube says he has even seen primary care physicians threaten to pull referrals from specialists who choose to take their cases elsewhere.

2. Direct-to-consumer marketing can improve volume in heavily employed areas.
Dr. Kube says direct-to-consumer marketing can help to offset limited referrals from primary care physicians. "If patients are coming to us directly, hospitals and employed physicians have less control over where we can do the procedure," he says. "It has required us to be a lot more active in marketing so that we can get those referrals on our own instead of having to rely on primary care physicians to send cases to us." Marketing your practice or surgery center can involve making and regularly updating a website, posting ads in the local newspaper and advertising in local hotspots to build patient traffic.

3. Large, private physician practices are less susceptible to employment. Dr. Kube says subspecialists are generally resisting hospital employment in his area due to the presence of large specialty groups. "A lot of facilities don't have the resources to replace these large, private groups," he says. "It's much easier for the hospitals to chip and chisel away at primary medical offices, because there are dozens of those. If they want to target ENT, there's one major powerhouse group here." He says the larger groups still have a lot of autonomy in delivering services because they control most of the physicians in a particular specialty.

4. Physicians may be moving away from employment. Though many physicians are moving towards hospital employment for the security of an annual salary, Dr. Kube says others are moving back to private practice after hospitals fail to "follow through" on their promises. "There are some doctors who are now very regretful that they ever got involved with the hospital, and they are trying to get out of the hospital system and branch out on their own," he says.

He believes some employed physicians are realizing that after receiving an attractive sign-on bonus from the hospital, their compensation has decreased compared to what they were making in private practice. "Doctors that are doing the same type of work in a private setting may not do as well early on, but once they get established five or 10 years later, they're making substantially more," he says. Surgery centers should watch for physicians leaving the local hospital or health system and target those physicians for investment, as they may be looking to supplement their income with ancillary revenue.

5. Younger physicians are hesitant to invest in surgery centers because of risk. Dr. Kube says while most physicians are interested in ancillary revenue from surgery center investment, younger physicians are frequently hesitant to pursue investment because of the risk. "In the era of so many doctors wanting to be employed by a hospital, there's an incredible aversion to risk," Dr. Kube says. "Even when you're offering them a guaranteed return on investment, they don't want to buy into anything. They don't want to take that capital risk — which is, of course, the hallmark of business." He says six years ago, almost none of his graduating colleagues had any interest in working for a hospital, but today's young physicians seem to be prioritizing security over profitability.

Related Articles on Surgery Center Physicians:
10 Reasons Physicians Take Cases out of Surgery Centers
Texas Physicians Continue to Opt Out of Medicare
How Hospital Employment Affects Surgery Centers: Q&A With Dr. Joseph Banno of Peoria (Ill.) Day Surgery Center

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