I believe the future remains bright for private practice. While market indicators a few years ago were interpreted by many in the industry as signaling the demise of private practice, more recent data suggests the move away from private practice has not only leveled off, but may move back toward more independence.
Here are five reasons why private practice will remain healthy for the foreseeable future:
1. The trend of hospitals buying physician practices is not as strong as it once was.
While it's true that hospitals and integrated delivery systems have purchased physician practices since well before Congress passed the Affordable Care Act in 2010, some hospitals also have lost money on these acquisitions. Some say the losses total as much as $100,000 per physician, per year. Also, some physicians are not happy being employed by these larger systems.
2. New practice models help physicians stay independent.
Patient-Centered Medical Homes, for example, allow physicians to organize care to meet patients' needs in a way that was not possible in the past. Recognizing that the center-of-care has shifted to patients, providers and insurers are investing in systems to meet patients' needs and boost patient satisfaction scores. One reason for this shift has been the focus on delivering more preventive care under the ACA, a factor aimed at keeping patients well rather than simply treating them when they're ill. And patients want to keep their doctors, meaning they'll follow them wherever they go.
3. Accountable care organizations (ACO) are another option for physicians seeking to remain independent.
Physicians can contract with ACOs or do as some large physician groups have done and form their own ACOs. Either way, these organizations allow physicians to stay in private practice while focusing on improving care. Some ACOs offer shared-savings contracts that let physicians reap the benefits if they keep costs below a target amount calculated at year's end.
4. Health insurers are emerging as physician partners.
In the recent past, health insurers have not had much of an opportunity to affect whether a doctor or physician group sells out to a hospital. But since the ACA became law, health plans have changed how they pay physicians to support the transition from volume-based reimbursement to value-based care. Developing financial incentive programs to get doctors to focus on keeping costs down and quality up have taught health insurers that physicians can and should be considered partners in care delivery.
5. Health plans also recognize that physicians deliver care in low-cost settings.
Hospitals and health systems are much more expensive sites of care. The fact that physicians keep costs down is perhaps the most critical success factor for any health plan or health system. Cost has always been the most important factor for individuals buying insurance plans on the health insurance exchanges and for employers buying health insurance for their workers and family members.
For all these reasons, I believe physicians have a large and maybe even a growing role to play in any reformed health system. Of course things have and continue to drastically change for physicians today, but it's safe to say the sky is not falling for those in private practice.