At first glance Direct Employment can appear to result in a $50,000 – $100,000 loss per provider. It is important to consider the downstream effect of Direct Employment. Estimates are that for every dollar of revenue generated in a physician practice between $6.40 and $10.32 is billed elsewhere in the healthcare system.

Do not overlook the need to develop a strong Physician Leadership structure. May physicians will be attracted to this model as they believe it will allow them to defer all non-clinical decisions to the hospital. Employing large numbers of physicians who lack interest in the non-clinical elements of healthcare will result in physicians who are not vested in the success of the practice/clinic. Physicians must be partners in the process. The hospital must provide opportunity for leadership, management skills training and mentoring with skilled administrative team partners.

A sense of autonomy and control are the biggest barriers to physician interest in this model. A well structure Physician Leadership will contribute to the employed physicians gaining a sense of autonomy and control as they partner with the hospital to provide professional services in a model they participated in building, maintaining and growing.

Aligning financial incentives is also important in this model. Well developed incentive plans will reward the physicians for hard work and reinforce key initiatives of the hospital.