Hospitals and PCPs: it's the referrals

It’s well known that for most hospitals, taking on a new doctor translates into hefty costs. So why the hiring frenzy?

Aug 09, 2011 - Doximity Blog

Editor’s note: Doximity Advisory Board member Peter Alperin, MD, is a
board certified internist currently practicing at the San Francisco VA Medical
. He previously led informatics at Brown and Toland Medical Group,
and has also worked at Epocrates.

The number of doctors on hospital payroll has shot up by almost 75% over the
past decade, according to data from the Medical Group Management
. More than half of practicing physicians are now employed by a
large hospital or integrated medical group, a figure that’s poised to grow:
Almost three-quarters of hospital leaders say they plan to add more doctors
within the next three years.

It’s well known that for most hospitals, taking on a new doctor translates into
hefty costs. Over the first three years of employment, these can run as high as
$250,000 a year (and they rarely dip below $150,000), After that, losses tend
go down by about half, but they never full disappear. To break even, a newly
hired primary care physician has to increase his or her patient volume by about
30%. This, according to a recent report in the New England Journal of

In light of so much loss, then why the hiring frenzy? The data lays it out:
It’s the referrals. Traditionally, hospitals have been set up to profit from
treating the sick rather than preventing illness in the well. But now we’re
seeing a radical shift in the system–one that requires hospitals themselves,
ironically, to become the focal point in keeping people out of hospitals. The
prospect of a single national payer coming down the line is shifting systems
more toward the model we now have in Kaiser or the VA. In other words, we’re
asking institutions that for 100 years have been set up to handle illness to
get into the prevention business. Faced with this radical change of course,
hospitals are betting on patient flow. By bringing more doctors into the fold,
tests and procedures that would otherwise be done privately or at other
hospitals will take place on-site, and specialist referrals are more likely to
be made internally.

Thanks to their broad patient pool, primary care physicians tend to be the main
target in these initiatives–and hospitals are willing to bid high. PCPs now
typically earn compensation of $192,116 in such a network, according to the
NEJM research. That’s over $12,000 more than the $179,688 expected for those
who choose to stay private. Another incentive to join: The increasing
challenges of maintaining a practice and a income. For many, the choice really
does feel like it boils down to this or forming a concierge practice. Moreover,
as opposed to the 1990s, when we saw a rapid hiring boom, followed by a bust,
primary care physicians can expect a fair amount of job security from these
deals: Already in 1998, less than half of internal medicine residents went
on to practice primary care. Now, those numbers are dramatically lower. By
2025, the American College of Physicians is anticipating a shortage of
between 35,000 to 44,000 PCPs.

For specialists, it is slightly different set of issues. In many locales, there
are too many specialists, so they need to be careful to be part of the large
systems that are forming so that they don’t find themselves without a chair
when the music stops. For example, if a hospital had two competing groups of
cardiologists, one group could lose out. This is, in part, because the more
specialists currently practicing at a given hospital, the greater the risk of
being frozen out when it comes to the referrals from PCPs that belong to
particular hospital system. Already, I know specialists who are asking
themselves not whether they should join, but when they should.

All these developments mean doctors will have to adopt new ways of thinking
about their jobs. In many respects, physicians are starting to resemble highly
compensated technical workers, such as airline pilots. Issues such as work
hours, and contracts with employers rise to the forefront. Because individual
doctors generally represent the weaker negotiating force in these
relationships, it will be critical to really scrutinize these employment
contracts, defining questions such as “what is productivity,” “how is my bonus
calculated,” and “what exactly does it mean to ‘be available’.”

If you choose not to join you need to think hard about where your referrals
will come from in the future. It’s difficult for a hospital to totally exclude
people because of anti-trust, but I wouldn’t be surprised if in the longer-run
those laws may be relaxed or changed. One final note: I predict that doctor
unions can and will become more prominent. It is a natural evolution of payer
and hospital consolidation. As a newly minted doctor 20 years ago, I would have
never thought this possible, but it’s the reality of where today’s market is

Physician Anonymity: No room for aliases

There’s logic behind why the convention of anonymity has dominated healthcare forums for so long. Until now.

Jul 31, 2011 - Production Blog Author

Editor's note: A few weeks ago, the American Medical Association published
a blog post discussing the pros and cons of online physician anonymity.
Around that same time, a group of influential doctors who’ve previously written
about the issue, among them Bryan Vartabedian, MD, and Wendy Sue Swanson,
, teamed up with the Mayo Clinic Center for Social Media to record
their viewpoints in a YouTube video.

Since then, the dialogue’s been enriched even further (we especially enjoyed
reading this essay by Mark Ryan, MD and this one from Jen Gunter, MD).
Here, Michael Nierenberg, MD, Clinical Professor of Medicine, Emeritus at
Stanford University and member of Doximity’s Advisory Board, offers his opinion
on what’s at stake, including how a verified community such as Doximity can
benefit doctors.

There’s logic behind why the convention of anonymity has dominated healthcare
forums: Anonymity protects us from retribution, makes it easier for us to feel
confident making bold arguments, and helps flatten status differences. But
anonymity comes with a price. A few years ago a team of researchers argued in
the journal Communication
that the
unintended consequences—specifically, fostering a culture of mistrust
surrounding participants’ motives and expertise—may outweigh the benefits. I’m
inclined to agree. Here are five reasons why we need to kick anonymity to the
curb and how a real-name network like Doximity can radically improve
doctor-to-doctor communication.

Accountability promotes credibility
Adding your name to a comment affords you an opportunity to pause and make sure
you really stand behind what you are saying. Anonymity suspends real-world
judgment and emboldens us to jump into a dialogue, to express strong opinions,
and to stick to our guns in the face of peer pressure. But it also fosters
hasty, sloppy reasoning, making mistakes more likely. As healthcare providers,
we have an ethical responsibility to be sure what we’re saying is true. This is
especially important on the Internet, where an offhanded slip can live on
forever (racking up pageviews all the while). Put simply, accountability
increases veracity.

Anonymous conversations can get unruly
Why do bank robbers wear masks? Because their identities make them accountable
for bad behavior. Accountability holds people up to a certain standard of
conduct. Not everyone needs that reminder, but it takes only one or two
disruptive individuals to spark hostility in a debate. When this happens,
otherwise productive conversations lose focus—and participants—fast.

Identifying yourself demonstrates expertise and expedites dialogue
Allowing people to see who you are and what you’ve done can actually help get
your point across. It gives readers a frame of reference to interpret your
comments. One is more inclined to trust a statement about an anemia made by J.
Archer, Stanford hematologist, than one made by a physician with the handle

Knowing who-and what-is involved brings people to the conversation
Online conversations are a little like buying a car. You want to check out the
product before you invest. Say you’re reading a discussion about a
controversial weight surgery device. As much as the commentators’ experience
and expertise matters to you, you’re also going to want to evaluate their
involvement and any conflict of interest. Wondering whether doctor X—an
enthusiastic proponent—is a bariatric surgeon with a financial interest in the
company may keep you from fully trusting what they have to say. Once you know
with whom you are dealing, you can start looking at their comments on their own
merits. Ultimately, knowing who’s participating and what’s at stake improves
the level of communication and builds trust that’s essential for community.
Trustworthy dialogue draws more people into the conversation and makes the
interaction more robust.

Letting people know who you are opens up opportunities to network, collaborate, and build your reputation and practice
Good comments get good attention; it’s as simple as that. By going public you
have an opportunity to get your opinion out there, and to make connections. The
beauty of participating in online conversations is that it lets us all go
beyond the social and geographic parameters we already know to forge new
connections and make new discoveries. Say I have a patient moving to Stanford,
California, and I don’t know a lot of physicians in that area to refer him to.
I’m far more comfortable referring to Dr. J Archer, Stanford hematologist, with
whom I have interacted online, than to “Crackerdoc71”. The same goes for
clinical studies. If I’m working on a study and I come across a forum with an
insightful group of physicians, I can contact them about a way to collaborate.

Physicians all too often act in isolation because of the logistical
difficulties of communication. Letters and phone calls are time-consuming. The
internet can solve this problem but interaction needs a foundation of trust and
openness to succeed. Doximity is trying hard to provide this environment. I’m
eager for all of us to take advantage of this powerful tool to facilitate
physician-to-physician communication without the need for aliases.

What is Doximity?

A very warm welcome to our company blog!

Jul 21, 2011 - Doximity Blog

A very warm welcome to Doximity Blog! Since our company’s beta launch in
April, we’ve had the opportunity to talk a lot about what Doximity is; that
we’re a private, HIPAA-compliant network where verified physicians and
medical professionals can connect, refer, and securely communicate on the
iPhone, Android, and Web.

A blog is a way to engage more frequently, more diversely, and–if we do the job
right–with more fodder for discussion. For all those reasons, we wanted to set
the tone and kick things off with a post that focuses the conversation on not
just our product but also the group of individuals behind it.

As a team, we at Doximity are:

Physician-centric. Many of us are physicians, and those who aren’t wish we
were. As such, we’ve used the leading hospital/clinic software systems, and
we’re generally annoyed by how ugly and inefficient they are. They seem to be
made primarily for CFOs and CIOs. That’s because, more often than not, they

Technophilic. We’re all Silicon Valley immigrants and while we hate the
housing prices here, we love the technology. We geek out about the latest sites
and gush over elegant design. Our 2 year-old kids know how to say “iPhone,”
“iPad,” and “Android,” and we secretly like it.

Pragmatic. We lack the patience to be political. That’s not to say health
policy isn’t important, it’s just not our cup of tea. We’re practical “do’ers”
and there’s lots that can be done right now to improve medical communications.
Our beta product is testament to that.

Several of us hail from Epocrates, where we had the same founding ideals and
spirit–we just never had a place to write about them back then. There’s a lot
to dig into in this space, and we’ve configured our blog so that individual
team members can take the floor. Ideally, this will afford you a breadth and
depth of information and points of view. We couldn’t be more excited to get

Jeff Tangney, CEO & the Doximity Team