The Water Balloon of Healthcare Costs - Sypore

The Water Balloon of Healthcare Costs

Reading a short and on target article by Mr. Christopher Majid ( reassured me that I have not been a lone voice of reason in the recent past. It reinforced my belief that much like squeezing a water balloon, the healthcare costs only get shifted around within the system from one stakeholder to another, while remaining essentially the same.

Through publishing articles and speaking to audiences, I have tried hard to spread the message to physicians that selling their private medical practice to a hospital is a “net loser” for the physicians. My position is rooted primarily in the following facts:

#1: Loss of lifetime earnings of over $2,000,000

For the average Primary Care physician, working as an employee versus being an owner / partner in a private practice costs over $2 million in lost earnings over the course of a typical career. I’d be glad to share the math behind this calculation should anyone care to see it.

#2: Loss of control over earning ability

When the MedPac and CMS rules change and reverse the tide against the hospitals’ current strategy of using hospital outpatient departments (HOPDs) in order to charge more for the same service, the losses will mount for the hospitals. They will certainly then do what every business does when losses are being incurred: cut costs. The biggest cuts for a services business come from the highest paid employees below the C-suite. A lot of physicians will be laid off and many may find themselves unable to start a new practice unless they have planned for such an event during their employment.

#3: Loss of personal freedom

After working in corporate America for the first half of my career, I ventured out on my own as an entrepreneur. While times have been challenging now and then, two things stand out above all else in support of my decision to “hang my own shingle”:

  1. Freedom to make my own schedule and take time out for family when I need to. Of course, there has to be balance between running and growing a business as there is no paycheck without business generated income.
  2. Freedom to earn what I set as my goal. I believe in no limits in this area: no limit on what my financial goal can be other what I decide it to be and no limit on how hard I will work for this goal.

The personal freedom is truly priceless!

#4: Loss of clinical autonomy

For the physicians I know and for most I others, this is really #1. Being told when to discharge a patient or who to refer the patient to and what tests to order and from where is not what physicians go through the rigors of medical school and residency for. When the rules of their employer clash with their Hippocratic Oath, the emotional pain must be immeasurable. Loss of clinical autonomy is driven contractually in a hospital employment situation. Most physicians realize this too late after signing the employment contract, even when they are “assured” they will not lose this autonomy.

If we can agree on the four facts I listed above, then why do physicians opt for hospital employment instead of remaining in an independent practice, whether group or solo?

I will address this in my next article on this very important topic. In the meantime, please learn more at

No Comments

Post A Comment