Alternative practice models and why doctors are switching

April 3, 2019

The days of the traditional practice are greatly diminished.

In our current healthcare system, doctors and patients alike are struggling and dissatisfied. Doctors are burning out, most often due to the stress of practicing in a dysfunctional system where they have lost control. Patients are footing increasing out-of-pocket expenses while dealing with fewer treatment choices and denials of coverage for necessary care. As frustrations mount, all parties are looking for alternatives.

The days of the traditional practice are greatly diminished. Many doctors, especially lesser-paid specialties like primary care doctors, battle to stay in business, while at the same time navigating the increasing complexities of medical treatment. Many patients, and doctors, prefer the small practice environment where continuity of care rules. But many doctors are leaving this model behind as the pressures mount to insurmountable levels. Some doctors in private practice contract with all insurance plans. Some limit their practice to only commercial insurance plans, opting out of Medicaid and/or Medicare. Additionally, some patients accept only plans with out-of-network options, choosing not to be on the insurance company panels. 

Other than small private practices, what other models are seen in medical practice? 

  • Large physician-owned networks: Many smaller independent practices have consolidated to form larger networks. In these new creations, financial and business practices are often centralized. For physicians, who are often paid a salary plus a productivity bonus, it often unloads much of the stress of running the business alone, spreading overhead costs across many physicians. Additionally, call coverage is lessened because there are more physicians to participate.  Patients often dislike this model because the personal attention gets lost. The one they speak to about their balances or their appointments may not be the individual they see when they come in to the office.

  • Hospital-owned networks: In many areas, hospitals have actively been purchasing existing practices from physicians, or developing new ones and recruiting physicians. In this model, physicians are typically employed for a salary with or without a productivity bonus based on RVUs generated. Physicians in this model lose control of many aspects of their practice, especially business and financial decisions. The hospital is the decision-maker, with or without physician input. Patients often lose continuity of care with the same physician and deal with the hospital for many of their needs. 

  • Direct primary care (DPC): This is a rapidly growing design that removes insurance companies from the equation, so patient deals directly with the doctor. Under this arrangement, patients pay the physicians directly, typically some combination of a monthly fee plus visit fees. Because doctors don’t bill the insurance plans, some overhead costs are greatly reduced. Under this arrangement, patients maintain continuity of care and often have increased access to their physician of choice. But since this model doesn’t cover for catastrophic care, patients are advised to carry supplemental insurance and/or health savings accounts.

  • Concierge medicine: This is another model involving a direct relationship between physician and patients. In this system, the patient pays an annual fee to be part of the practice. Doctors agree to provide advanced care and be more available to these patients. Since the patients are paying a retainer, the physician is often able to limit their practice to much smaller numbers. 

  • Telemedicine: Telemedicine has been another rapidly growing design that has proved especially helpful in isolated and rural areas where patients have very limited access to healthcare services. Typically, it is reimbursed under a fee-for-service arrangement, and insurance companies are increasingly covering these services. For doctors, it cuts down on overhead costs as they do not need to maintain a physical location. For patients, it is convenient and allows them to access care without traveling great distances to receive it.

While our current healthcare system continues to evolve, it will be interesting to see which of these models take root.