Healthcare Reform will bring new challenges to Hospital Physicians and all providers in healthcare. Historically, the physician reimbursement in the US has been that of fee-for-service. This model essentially provided greater reimbursement to the practitioner and hospital, for greater services rendered. Utilization and cost-effectiveness were always a concern.

In the 1970’s, the term HMO was coined for the Nixon administration; to describe an organization that would compete on the basis of price and quality, while combining healthcare and insurance into one organization. For many physicians, this was unfavorably viewed, as it essentially rewarded physicians for doing less. Specifically, remuneration based upon services that were not delivered.

With time, many physicians in private practice, decided to accept employee or hospital physician relationships with hospitals. This was largely due to apprehension about declining reimbursement experienced by the private practice physicians.

The Patient Protection and Affordable Care Act of 2010 and Health Care and Education Reconciliation Act of 2010 are estimated to reduce the federal deficit by $143 billion over the first decade. To accomplish, it is mandated that remuneration be based solely upon the success of the patient’s outcome – described as value-based purchasing. In this model, the success of each component in a patients care is dependent on the others (hospital, physician, etc.). This is will require hospitals, hospital physicians, and non hospital-based physicians to work together in cohesion.

Undoubtedly, the next four years will prove telling, as the numerous health-related provisions take effect. It will likely be quite challenging to restore the already imbalanced healthcare system without additional resources and or legislation. Hospital Based Physicians will prosper in some systems, while struggle in others. Hospitals as employers will likely incorporate more physician-lead medical leadership into their administrative team to achieve key performance benchmarks, and profit margins. Many hospitals will consider reducing the number physician group contracts, while others will struggle to attain performance benchmarks without them.