After a monthslong wait to join their new employer, providers at Medical Faculty Associates in Washington, D.C., opened their emails in late May. An agreement had been finalized to transition ownership of their struggling physician group under the umbrella of one of the nation’s largest for-profit healthcare facility operators.
Providers were instructed to pick up a hard copy outlining their new benefits and employment contracts, with no option for a digital version. That was the first of many frustrating developments, according to several providers who were granted anonymity to speak openly without fear of retribution.
Parental leave seemed to be cut. Crucial questions about benefits were directed to faceless corporate email addresses, with days between responses. Benefits structures and internal meetings often needed to be translated out of legal jargon. “Are you following any of this?” one doctor recalled their colleagues texting during a meeting. One provider, incensed by the lack of clarity in their contract, briefly considered filing a lawsuit.
The unsteady rollout of employment contracts for providers at MFA after announcing it would hand over clinical operations to a subsidiary of Universal Health Services underscores the difficulties of increasing industry consolidation.
Providers say poor communication fuels frustration
Last month, UHS said it was creating a nonprofit, called Capital Medical Group, to absorb the physician group with more than 750 providers after years of multimillion dollar losses.
UHS, an international facility operator that owns over 29 acute care hospitals across the country through its subsidiaries and has over 100,000 employees, said the transition would help stabilize staffing and operations at George Washington University Hospital, Cedar Hill Regional Medical Center and other outpatient sites. It also said it would provide a lifeline for MFA, which was over $400 million in debt.
The deal is set to close in July. GW, which previously oversaw MFA, will continue to maintain academic and research relationships with the facilities under the agreement.
But doctors and other providers told Healthcare Dive that some of their benefits, including parental leave, are being cut as UHS attempts to unify MFA under its portfolio of consolidated groups. They also say their new employment contracts will push them to meet higher performance metrics that are tied to clinical visits, which some claim could incentivize providers to perform unneeded procedures to hit internal goals.
A spokesperson for UHS said that the benefits and compensation packages offered to providers are “consistent with fair market value and industry standards for large physician groups.” The health system “is providing a valuable lifeline to all MFA providers and staff in light of the severe financial distress of MFA and in order to preserve the clinical services at the hospital, availability of healthcare for the community and the continuation of the GWU academic mission.”
Providers have until Friday to sign the new contracts, but some are on the fence about joining a vast healthcare organization that they say is already failing to answer crucial questions about their new job terms. They said UHS and MFA have directed them to corporate email addresses to ask questions, and that they often wait days for replies that can get bounced around to other email addresses. This is especially jarring for many who said they were used to working at a physician group built on personal relationships and face-to-face interactions.
“I think a lot of people will leave, they're going to hemorrhage doctors.”
Physician
Medical Faculty Associates
Providers said they’ve also been told to direct questions to their department chairs, but the chairs themselves are asking the same questions employees have during internal meetings.
Some providers are unsure about signing the contracts because they say crucial questions are still outstanding days before the deadline to sign them.
One doctor said their specific contract contained errors, including a list of job duties that do not align with their work.
“There’s no way I will sign this,” one physician said about their contract. “I think a lot of people will leave, they're going to hemorrhage doctors.”
While a portion of the staff originally believed they might be able to negotiate terms, another provider said, “It’s been clear that you’re gonna get your contract, and either you sign it as is or you leave.”
Experts, however, said that some of the tactics disgruntling the providers — like the fact that they don’t appear to be able to negotiate their new contracts or benefits — are a common and even recommended practice for large operators acquiring physician groups in order to standardize benefits across their growing portfolios.
Chad Stutelberg, who has provided consulting services for 32 years regarding physician compensation issues, said he usually recommends hospitals not to individually negotiate employment contracts because they need to standardize benefits among disparate physician groups and other subsidiaries.
“I understand why that group wants to have their own benefit package, their own contractual terms for time off, their own compensation model,” Stutelberg, the national managing director of healthcare compensation and rewards at Gallagher, said. “But if you do that … you potentially open yourself up to pay discrimination issues, pay equity issues, just an unhappy group. How do I get this group to work together as a team when everyone has their own deal?”
Those acquired groups are “going to want to feel that they got treated special, they’re going to want to negotiate their own contract” and more, he said. “And what I tell my clients is: Don’t do it.”
Still, effective approaches exist broadly to integrate physician groups, according to Andy Swanson, chief customer success officer at the Medical Group Management Association.
Navigating acquisitions is hard. “I’ve never seen it go 100% great,” he said, but stressed that joint and public communication between acquirers and physician groups is important.
“There are times when you’re spot on, but the more top down and the more dictatorial and the more templated everything is for every physician, then the worse it gets,” Swanson said. “However, there has to be some standardization across contracting.”
You can’t have a plethora of different contracts, he said. But, “the devil’s in the details.”
UHS promises lifeline, some doctors see cuts
But for some MFA providers, standardization looks less like a unified company and more like a reduction in their quality of life.
One of the biggest sticking points is what appears to be a lack of parental leave, according to benefits contracts viewed by Healthcare Dive. Previous MFA contracts seen by Healthcare Dive allowed salary continuation for up to four weeks every two years, following two years of employment.
Clinicians said they were told by UHS and MFA representatives during a town hall meeting in late May to utilize government and local benefits for parental leave, like the federal Family and Medical Leave Act and another program offered by Washington, D.C.
In an internal benefits meeting last week viewed by Healthcare Dive, lawyers for the physician’s steering committee from the firm King & Spalding suggested employees direct questions about parental leave to a UHS email, but acknowledged they would “work on a more specific contact.”
“We do understand there’s different parental leave benefits between MFA and Foggy Bottom,” one lawyer said. Foggy Bottom Physician Group is the legal entity name of Capital Medical Group, the nonprofit subsidiary created by UHS that will assume operations of MFA.
Multiple employees during the meeting said their questions about benefits hadn’t been answered even after emailing the suggested corporate email addresses.
Annual paid time off is also being reduced for some employees. UHS’ nonprofit will offer 20 days of PTO, according to a benefits town hall meeting. That’s down from 23 days offered by MFA, according to several contracts viewed by Healthcare Dive.
A spokesperson for UHS said that, while it wouldn’t discuss specific matters or financial components in the contracts, the offers it’s made to providers have maintained their compensation levels.
Some providers also said they would need to meet productivity metrics — called relative value units, which are tied to medical codes and are meant to assess clinical workloads — when they previously didn’t have one or weren’t held to one prior. Many health systems and hospitals pay providers a bonus by the total work RVUs they produce annually. Still, some clinicians told Healthcare Dive they were concerned the new RVUs could incentivize unnecessary care.
“That, to me, was the biggest red flag,” one provider said regarding their new productivity metrics.
A UHS spokesperson told Healthcare Dive it “expressly rejects any unfounded assertion that productivity metrics would encourage the performance of unnecessary procedures.”
“Such metrics are industry standard for physician practices and UHS will maintain the compliance auditing currently in place at the MFA to ensure that inappropriate procedures are not performed or billed,” they said.
Research suggests, and many hospital senior leaders believe, that physicians are less productive concerning patient care when they are acquired by hospital systems, according to Gary Young, a professor at Northeastern University and director of its Center for Health Policy and Healthcare Research.
“Hospital senior leaders, hospital managers will often complain that they do see a substantial drop-off, and then they try to work that out through various incentive arrangements in their contracts,” Young said.
Physician group acquisitions on the rise
While clinicians at MFA consider whether to accept contracts at UHS, the long-term effects from the consolidation of physician groups remain unclear.
There is little research on physicians after their groups are acquired by hospitals, according to Catherine Ishitani, a postdoctoral research associate at Yale University’s Tobin Center for Economic Policy.
“We know way more about hospitals buying hospitals,” Ishitani said. “Physicians have historically been a little bit tricky to track just because the data is a lot more fragmented, and it’s harder to follow.”
There are few comprehensive studies analyzing physician compensation regarding acquisitions. One, published in 2021, showed that physician income decreased on average following acquisitions of independent doctor groups by health systems and hospitals. (Most doctors and clinicians that spoke to Healthcare Dive said their salaries were slated to increase with the acquisition.) Although MFA bills itself as the “largest independent academic physician practice” in D.C., GW assumed some governance over the group and also lent financial support.
“Physicians typically worked in practices they owned, or they worked for other physicians. That’s all changing, and it’s changing dramatically.”
Gary Young
Director, Northeastern University’s Center for Health Policy and Healthcare Research
A qualitative study published this week in JAMA Network Open found that independent practice acquisitions were most often initiated by physicians due to financial concerns. In those acquisitions, hospital leaders said they were frustrated with physicians’ productivity, while physicians said they felt sidelined in discussions about support and work schedules.
Still, Northeastern’s Young, who was the lead author on the study, said that benefits usually improve with those acquisitions, especially if physician groups were funding their own benefits beforehand.
“My general sense of that is that physicians get better benefits when they move into hospital systems, and that actually is something that we heard about in our study,” Young said.
Other studies have analyzed healthcare prices and found that they can increase for some services following acquisitions of physician practices.
The limited data comes as physician groups are increasingly affiliated with hospitals and health systems. Nearly half of all American physicians were consolidated with hospital systems in 2024, up from less than 30% in 2012, according to a study reviewed by the Government Accountability Office.
“The vanishing independent physician sector is a major development in the U.S. healthcare system,” Young said. “Physicians typically worked in practices they owned, or they worked for other physicians. That’s all changing, and it’s changing dramatically.”
Hard economic realities for healthcare practices, like rising expenses and flatlining reimbursements, are to blame for some of the consolidation, Gallagher’s Stutelberg said.
“The amount of administrative [work], the paperwork, the technology, the security, all of the things you need to do to run your business today are 10 times greater than they were before,” he said.
Those are the challenges swirling around as the providers Healthcare Dive spoke to at MFA think about their future.
A UHS spokesperson said that over three-quarters of MFA staff have already signed and returned their employment offers.
Still, some said they won’t sign the contract, while others feel they have little choice.
“I don't have a backup plan,” one provider said. “So I will sign it, and then see what happens.
