Private practice vs a hospital paycheck: Michigan's evolving health care culture

Mar 23, 2012

Next week, the U.S. Supreme Court will hear legal arguments over the Patient Protection and Affordable Care Act. The federal health care law has come under fire for a variety of reasons, including changes to the way Americans will get their health care.

But whether or not the health care law survives its various legal and political challenges, the way health care is delivered in Michigan will likely continue to change in significant ways.

In the 1970s,  Marcus Welby, MD was a television mainstay. 

"We don’t treat fingers or skins, bones or skulls or lungs -- we treat people.”  Every week, actor Robert Young would dispense fatherly advice along with a little medical wisdom as America’s reliable family doctor.

Of course, Marcus Welby was a doctor with a private practice.       

But times are changing, according to Charlie Carpenter. 

“Younger doctors want what we call a new social contract. They don’t feel obligated to this "Marcus Welby" archetype," says Carpenter. He's the president of the Medical Advantage Group. Carpenter’s been studying a trend in Michigan of physicians moving away from private practice to working for hospitals.     

He says young doctors would rather get a paycheck from a hospital than run a private practice as a small business.

Hospitals are also in the hiring mode.

In 2004, 83,000 doctors were employed full or part-time by U.S. hospitals. In 2011 that number rose to 115,000. A survey by the American Medical News found three-quarters of hospital administrators planned to hire more physicians this year.   

Why is this happening?

Charles Carpenter says one reason is hospitals are worried about the future of health care reform. He says hospital administrators fear tighter controls on health care spending will drive down demand for hospital services.

“And so they are all engaged in defensive hedge strategies to shore up their market share," says Carpenter. "And one of the ways to do that is to employ the physicians that are responsible for the referrals to (their) facility. So you buy your marketing channel.”

For doctors, rising technology costs and lower insurance reimbursements are a factor, making hospital work more attractive.

Nearly 30 years ago, Dr. Tim Wellemeyer bought into a private practice in Holt, just south of Lansing. But Dr. Wellemeyer has joined the ranks of doctors getting a paycheck.  He and his partners recently agreed to let McLaren Health Care buy their practice.

He says McLaren made them a good offer that will make it easier for the doctors to serve the patients that they have taken care of for decades.

Wellemeyer says one change is they are now referring patients to specialists affiliated with McLaren, instead of Sparrow Hospital, which they often worked with in the past.

“We still use specialists at both hospitals," says Wellemeyer. "We’re moving slowly to getting more referrals into the McLaren system.  It’s a transition. It’s not something that you can turn the switch off, because people have relationships with those doctors.”

But what happens to the trend of doctors moving from private practice to hospital employee if the U.S. Supreme Court strikes down the federal health care law? Or if a new Congress or a new president reverses course? 

Well, probably nothing.

Brian Peters is with the Michigan Health and Hospital Association. The association looks out for the interests of Michigan hospitals.

“Federal health care reform has only accelerated the trends that were already ramping up in the state of Michigan," says Peters.   

Peters says the private sector is driving changes in health care spending and will continue to do so whether federal health care rules stay as they are or change.    

He says in the end it will be up to hospitals and doctors to work together to make the system work.

Oh, by the way, remember at the end of the TV series, even good old Dr. Welby moved his private practice to a hospital.