The New Era of Hospital-Employed Subspecialty Practices April 19, 2010

Independent subspecialty practices face daunting challenges in the near term. The transition in subspecialty medicine from independent group-based practice to hospital-employed practice appears imminent. Much of this transition will be the result of established and developing policies that “nudge” entities in this direction.

Soft Paternalism, or Libertarian Paternalism, is an approach to behavioral economics wherein policies are designed to maintain freedom of choice while also steering people’s decisions in directions that “will make their lives better.” The premise behind these policies presupposes that people are susceptible to a wide array of routine biases resulting in poor decisions. In this regard, public policy can “nudge” people into making more prudent decisions. One of the co-authors of this concept, Cass R. Sunstein, was appointed by the Obama administration in January 2009 to head the White House Office of Information and Regulatory Affairs. 

Policies that direct physicians toward hospital employment have been in existence for quite a while; however,  the Centers for Medicare and Medicaid Services (CMS) has felt more emboldened in the past year with the support of the current administration. A few of these policies have included: pending resolution of the sustainable growth rate model, increased scrutiny and new regulations around physician ownership of facilities where they refer patients, the scope of practice issues at the state level, divergent goals between specialist and primary care physician societies, and substantial cuts in reimbursement for cardiology services in the 2010 Medicare Physician Fee Schedule (much of which was predicated on flawed PPIS data). (more…)