Shifting Toward Employment

More PCPs are becoming hospital employees, according to ACA impact study on physicians and their practices


“Uncertainty prevails” was a common theme in the recently released Jackson Healthcare study on the Affordable Care Act’s (ACA) impact on physicians and practices.

“We found that a significantly larger number of physicians desire to be employees (versus independent contractors) in the post-ACA world,” said Sheri Sorrell, manager of market research for Jackson Healthcare, a national healthcare recruitment firm based near Atlanta. “They know a salary is constant, even when reimbursements decline. Plus, they know someone else will navigate the complexities of the ACA.”

Jackson Healthcare’s “Physician Practice Trends 2014,” a national study with nearly 2,000 physicians representing all 50 states and medical-surgical specialties, revealed some rapidly changing statistics that are shaping physicians’ decisions to ink an employment deal with a hospital or healthcare system.


  • The happiness factor. Physicians whose income decreased in the last year are more likely to be age 45 to 64, own their medical practice, work more than eight hours a day, be dissatisfied with their career, and discourage young people from entering the medical field. Because of the ACA roll-out, they say they’ve lost patients, and remaining patients often delay treatments because of higher out-of-pocket costs.
  • The “never-known-independence” physicians. Satisfied physicians are more likely to be between the ages of 25 and 44, work eight hours a day, be employed, have chosen employment for lifestyle reasons, and have a greater number of patients with private insurance. “Younger physicians are most likely to have never been in private practice,” noted Sorrell. “They started out employed and remain employed.”
  • The impact of higher deductibles. As a result of higher deductibles resulting from effects of the ACA law, patients are seeking routine care less frequently and postponing certain procedures. The trend attributed to 12 percent of physicians’ responses to the most prevalent effects the rollout of the ACA has had on their practices. The higher deductible has made insurance the equivalent of self-pay. “In reality,” one physician wrote, “patients don’t have insurance until they’ve met their deductibles.”
  • The insurance cancellation aspect. Insurance policy cancellations led to 23 percent of physicians saying they’ve lost patients since the ACA implementation; another 15 percent lost patients because their practice could no longer accept their insurance plans.


Quality of life and financial reasons are only a part of the reason why older physicians, especially primary care providers (PCPs), are approaching hospitals, with the keys to their practice in hand.

“The majority of acquisitions are initiated by physicians,” emphasized Sorrell. “It’s not necessarily the hospitals going after the practices. It’s the practice physicians knocking on the hospital door.”

Fortunately, practice acquisitions are mutually beneficial for practice physicians and hospitals and health systems, the latter of which are welcoming the opportunity to buy PCP practices as they’re forming and growing Accountable Care Organizations (ACOs).

The answer to which party has the upper hand depends on the geographic location of the practice.

“They’re hedging their bets,” added Sorrell. “They’ve done the math. They know what they need to keep up with the ACA compliance. They see it’s too much to deal with. They realize they’re better off accepting a salary, putting in their eight hours a day, and going home.”

Despite the awkward position of practice physicians approaching hospitals and health systems about a deal, they have a considerable amount of leverage, especially in larger metropolitan areas, Sorrell pointed out.

“They’re offering the practice on their terms,” she explained, “and can say, ‘if you don’t take it, I’m going down the street to offer it to your competitor.’”

A striking study statistic as a positive benefit to physicians of selling their practice: The number of physicians taking call dropped from 77 percent in 2012 to 55 percent in 2014.

“Basically, it’s a result of employment,” Sorrell said. “It’s interesting because physicians, especially older doctors, tend to complain a little bit about the work ethic of younger folks, who want to work eight hours a day and not take call. Those same physicians are making a shift in that percentage by at least limiting on-call time in their contracts.”

Sorrell said study statistics align with broader trends seen in other Jackson Healthcare and industry research.

“We’ve been tracking the trend toward employment in various ways, with studies on physician practice acquisitions, why physicians decided to sell their practice, or why they want to get out of private practice,” she said. “We’ve also been taking a look at what happens when physicians become employed. These are trends we’ll continue to watch.”