Children's Hospital and Medical Center

Exteriors of Children's Hospital and Medical Center at 8200 Dodge Street in Omaha on Friday, Jan. 4, 2019. 

Physicians, a headstrong bunch who like to call their own shots, increasingly are turning their independence over to hospitals and hospital systems.

The trend toward hospital-employed physicians causes concern among some independent doctors who see their profession changing and incomes threatened by competition from large institutions.

Employed physicians more and more are the norm, here and nationwide. The American Medical Association reported two years ago that for the first time in the AMA’s documentation, fewer than half of physicians had an ownership interest in their practice.

The trend appears to be one factor in two doctors’ lawsuit against Children’s Hospital & Medical Center and its chief executive, Dr. Richard Azizkhan. That hospital “has engaged in a campaign to ‘own and control’ the medical practices of physicians who provide services inside the hospital,” the suit said.

The two doctors no longer practice at Children’s but have hospital privileges elsewhere.

Dr. William Lowndes has been both a private operator and an employed doctor. The grass is “no greener on either side of the fence,” Lowndes said. “It’s just cut differently.”

But Lowndes also said he likes his employment with CHI Health because he doesn’t have to worry about personnel issues, regulations and other business management headaches. He concentrates, instead, on patient care. Being part of a system also gives him access to counselors and other services that can be challenging for independent doctors to provide, he said.

And 57-year-old Clark Sisson, a patient of Lowndes, said Lowndes and his team do a great job. “He’s awesome,” said Sisson of Omaha. “They’re really, really good.”

The lawsuit against Children’s has rattled Omaha’s medical community. The suit says “physicians who are employed by, and whose practices are owned by Children’s Hospital, offer a more profitable and predicable stream of revenue” for the hospital “even if the captive physician is less skilled or devoted” than an independent doctor.

The two doctors also contend in the suit that the Children’s administration has allowed an incompetent surgeon to practice there. Children’s has denied the allegations outlined in the suit.

The conflict is reminiscent of a doctors’ rebellion against Alegent Health nine years ago. Physicians at two hospitals voted that they had no confidence in Alegent Health’s leader, Wayne Sensor.

Sensor had moved some services from one hospital to another and wanted to employ more doctors. He eventually resigned, as did some other administrators. Alegent in time transformed into CHI Health.

The AMA said the share of physicians who own doctors’ offices fell to 47.1 percent in 2016, down from 53.2 percent four years earlier. The AMA has no position on whether private practices or employed physicians are preferable.

Dr. Cliff Robertson, head of the CHI Health system in Nebraska and southwestern Iowa, said many young doctors see employment in a system as more stable than private practice. He said hospital systems give those doctors an alternative to the risk and hassle of starting a business.

Robertson said the notion that hospitals can behave as dictators over employed physicians is laughable. “Anyone that thinks they can own and control physicians is smokin’ something,” he said.

Employed doctors receive salaries, or base compensation, he said, and have incentives for a combination of quality care, accessibility and productivity.

When he was a family practitioner, he said, he knew how many patients he needed to see on average in a week or month to help his employer cover costs and sign paychecks.

He said that he doesn’t have “quotas” for the number of patients who must be seen but that all doctors, employed and independent, need to be productive. They must build up a solid patient base over time.

“Everybody tracks productivity,” he said. “We all are sensitive to being efficient and effective.”

Dr. Emily Vuchetich, a pediatrician employed by Norfolk’s Midtown Health Center, said she didn’t go into medicine to become a businesswoman.

“I’ve always been an employed physician,” Vuchetich said. “I don’t have to worry about utilities. I don’t have to worry about paying rent” for the business. She focuses on her job — seeing patients.

Greg Mertz, managing partner at Virginia-based Physician Strategies Group, said employed doctors bring more competition into the market and “chip away at the patient base that private doctors once had.”

For young doctors who emerge from medical school with $200,000 in student loan debt, Mertz said, it can be hard to get a loan to start a private practice.

Nevertheless, Mertz said, “If a physician has a good business mind, they can do quite well in private practice.”

Mertz said he has no reason to believe that the quality of care is any better in one model than the other. As far as Mertz knows, quality is “physician-specific” and not a result of being employed or in private practice.

Dr. Jerry Fischer, an Omaha kidney specialist who retired a couple of years ago, said he always liked the ability to control his own practice.

“It comes down to decision-making,” said Fischer, 70, who had from one to 10 partners in his career. He always had a private practice.

If an independent doctor wants to spend extra time educating patients on why they should take their medications, they can do it without being worried about hearing from a supervisor, he said.

“In many, many ways, you get to be your own boss,” Fischer said.

Many burdens come with running a private practice. They include paying taxes, dealing with insurance networks, fixing computers, following government regulations, maintaining the grounds and building, hiring, firing and billing.

Jay Wolfson, associate vice president of University of South Florida Health, said in an email that in addition to work, the new breed of doctor wants to travel, have a family and enjoy life. That is more likely done as an employed doctor, he said.

A CHI Health spokeswoman said that across the state, about 40 percent of the system’s doctors are employed and the rest are independent doctors who have privileges to practice in CHI hospitals and others. The University of Nebraska Medical Center and Methodist Health System also employ doctors.

One of Fischer’s longtime patients, Omaha businessman Bob Carmichael, said Fischer always gave him time and instruction.

Carmichael, 69, said Fischer stayed on top of his cholesterol and abnormally low sodium levels and advised him on what he needed to do to stay healthy.

And when Fischer announced that he was retiring, Carmichael’s wife paid Fischer the ultimate compliment. She cried.

“Anyone that thinks they can own and control physicians is smokin’ something,” said Dr. Cliff Robertson, head of CHI Health system in Nebraska.