Surgeons as employees: Is the lining always golden?

When I recently queried third-year medical students at the University of Florida College of Medicine, Gainesville, FL, about their plans for practice after finishing their residencies, 75 percent of them indicated that they plan to work for some form of a health conglomerate. The idea of proceeding into one of the many private practice models of the past is not part of their mindset. In other words, they plan to be employees of the “system.”

The allure of hospital employment

In a 2008 article titled “Medicine in a vortex,” published in the Bulletin of the American College of Surgeons, I outlined the likely reasons for these students’ decisions.* Basically, physicians entering the workforce today enjoy the lifestyle employee status affords and, for the time being, have an income initially better than that of a junior partner in a private practice. Work hours are more predictable, and the employed physician is protected from the perils of private practice, primarily the cost of medical liability insurance and oppressive night call.

Even employed trauma surgeons have a satisfactory lifestyle. They are usually on call no more than once every four days, and their inpatient demands are limited because typically one of the members of the trauma group is designated as having responsibility for inpatients, usually a week at a time. When on the inpatient service, night call is not a responsibility. So at worst, night call is once every three days and patients are admitted to the team member who is responsible for inpatients that week. Because the service usually includes acute care surgery, surgical specialists, such as surgical oncologists and laparoscopic surgeons, have no acute care or trauma responsibilities.

Much has been written about the pros and cons of this system. I will limit my comments to the potential pitfalls for employed physicians.

Financial incentives for hospitals

In an editorial published in General Surgery News, “Health care delivery: Its origin and its dilemma. Who is in charge in the USA?,” I concluded that the answer is hospitals. The reason is quite simple: our reimbursement for medical care collects primarily on the hospital side of the profession from both private and government insurers. Many hospitals are flush with money, and salaries of hospital administrators can reach well above the $1 million mark. All of this money comes from the delivery of health care services or from the investment of prior money obtained from the provision of patient care. So, for now, hospital systems have the financial resources to recruit physicians as employees and with what may turn out to be inflated salaries.

Trauma centers are proliferating, at least throughout Florida, and especially in for-profit hospital systems. Why this sudden interest in trauma center development? The obvious and true answer is to provide better care to the injured patient. The other reason, however, is income to the hospital. Trauma patients often have multiple medical problems, each of which is attached to a billable Current Procedural Terminology (CPT) code. Medicare, as an example, uses a computer program that groups these CPT codes into diagnostic-related groups (DRGs) from which reimbursement is determined. The CPT codes associated with trauma care fall into multiple DRGs, thereby generating a potential surplus of income. This phenomenon I have termed “legal unbundling” of reimbursement.

In the early days of trauma centers, the criteria to be a Level I center were strict and the term “trauma center” was applied only to Level I centers. Level II centers now are advertised as trauma centers or trauma hospitals and are accepted as such by the public, by various triage services, and by payors. Therefore, in my opinion, the rush to become a “trauma center” is for reimbursement purposes along with the ability to provide better care to the trauma patient. Fortunately, there has been a proliferation of trauma fellowships to staff some these new centers.

What would happen if reimbursement changed? For example, what if my legal unbundling were to disappear and patient reimbursement was based on the entire hospital event rather than on multiple CPT codes? Would the financial incentive for having a trauma center take precedence over providing care for the trauma patient? Would the trauma center disappear along with the elimination of its associated expense?

Hospital systems are in a rush to form meaningful financial relationships with freestanding facilities. This event is occurring in metropolitan and rural areas of the country. For rural hospitals, the advantage is telemedicine, especially for the evaluation of radiographs by subspecialty radiologists in the “mother” institution. The attachment of the name of the mother institution to the small hospitals is seen as a way to stimulate retired patients who have a second home in desirable remote areas to seek follow-up care in a facility associated with the mother hospital rather than returning to their primary residence. It also allows for establishment of large specialty groups so that a specialist has time to travel to the rural area on a scheduled basis.

A surplus of surgeons?

For metropolitan and surrounding areas economy of scale makes financial sense and has led to the amalgamation of several hospitals into a single functional unit. Eventually, as in many businesses, one system is incorporated (bought out) by a larger system. The simple result of this process is that there are often two employees for only a single job—and somebody, unfortunately, has to go. If this somebody is a surgeon, radiologist, or any other specialist, where will he or she go? I suppose that if the U.S. population continues to rise and if the Affordable Care Act creates many more “paying” patients, such a dilemma is unlikely to occur.

The thought process driving medical education today is the possibility of having a deficit of 20,000 physicians in the year 2020. Consequently, states are rushing to increase the physician pipeline by establishing new medical schools and/or increasing the student body size of existing ones. New osteopathic schools are opening, and the number of American students studying abroad continues to increase. When a void is recognized in a free society, there typically is a rush to fill the void, which often results in a plethora of individuals seeking to seal the gap. So what was once recognized as a need has now become a surplus. We are several years from realizing such an event, but I believe one is on the horizon.

The bottom line is that employee status is almost always at the discretion of the employer. On the expense side of the ledger, often the most costly items are employee salaries and benefits. These costs are not fixed and may be subject to reduction at the employer’s discretion. As employees, surgeons will need to do their best to ensure that they are largely indispensable and their salaries are safe from dramatic reductions.

Most young physicians live at the end of their income stream and carry a large personal debt service. I advise them to do their best to avoid becoming a victim of the system. Do not totally rely on quality measures to ensure your continued employment. Many of these quality measures are not yet “drilled down” to identify the best surgeon who cares for the patients with the highest severity index scores. Do not totally rely on disease protocols to protect your quality of clinical practice. Many protocols are devised to take the best surgeons and the worst surgeons and create a median of clinical care among them. Such a system could result in your being a victim of “downsizing” for reasons other than quality of care. Political connections and personality are just a couple of other reasons.


* Copeland EM, Trunkey DD. Medicine in a vortex: Quantity versus quality. Bull Am Coll Surg. 2008;93(6):10-13.

† Copeland EM. Health care delivery: Its origin and its dilemma. Gen Surg News. 2008;35(12). Available at: Accessed November 21, 2013.

‡ Cooper, RA. Weighing the evidence for expanding physician supply. Ann Intern Med. 2004;141(9):705-714.

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