Down on the Farm The Attack on Physician Ownership

“How you going to keep them down on the farm, after they've seen Paree,
How you going to keep them away from Broadway, jazzing around, painting the town,
How you going to keep them away from harm, that's a mystery,
They'd wish they'd never seen a rake or plow, so who the heck can parlez-vous a cow,
How you gonna keep them down on the farm, after they've seen Paree.”

- Young, Lewis & Donaldson

Since the 1990s, while most professions saw an increase in their earnings, physician compensation has been essentially stagnant. Physicians’ investment in outpatient (and inpatient) specialty provider enterprises were undertaken, in great measure, to support the economic viability of their medical practices in the face of consistent decreases in physician professional component fee reimbursement yield, which has not kept up with inflation indices, as well as to respond to the growing initiatives aimed at improving quality of care and technological development.

Benefits of Physician Ownership

Over the past two decades, physicians have led the movement to care from inpatient/on-campus to outpatient/off-campus, resulting in well documents, substantial cost savings and quality-of-care benefits. However, continuing technological advances in diagnostic and therapeutic care may further increase competitive pressures between hospitals and physicians over ancillary services and technical component (ASTC) revenue streams. Further advancements in technology can only be achieved if physicians, as the developers and users of technological advancements, continue to have significant control over the operation and capital structure of healthcare delivery. As explained by Harvard professor Regina Hertzlinger, “Specialized healthcare facilities, partially owned by entrepreneurial physicians, represent the best hope for a higher-quality and higher-productivity healthcare system. The specialization integrates care that consumers must now struggle to obtain from a system organized by separate providers. Along they way, it reduces costs. And ownership provides an important additional incentive for physicians to provide the best value for the money.”