Practice Owners Dwindling in the U.S.

June 2, 2017

For the first time ever, practice owners no longer represent the physician majority, according to a new AMA study.

Welcome to Practice Rounds, our weekly column exploring what's being covered in the larger world of healthcare.

Share of Doctor-Owned Practices Drops Below 50 Percent

For the first time ever, practice owners no longer represent the physician majority in the U.S., according to an American Medical Association (AMA)

released Wednesday.

The share of practice owners dropped from 53.2 percent in 2012, to 47.1 percent in 2016, according to the study. Furthermore, the share of physicians who work for an employer increased from 41.8 percent to 47.1 percent over the same timeframe. As a result, there were equal shares of physician employees and physician practice owners in 2016, with 5.9 percent of patient care physicians as independent contractors.

The leading cause of the shift were physicians under the age of 40, two-thirds (65.1 percent) of whom opted for employment rather an ownership in 2016, up from 51.3 percent in 2012. The share of employees among physicians age 40 and older also increased between 2012 and 2016, but at a more modest pace than younger physicians.

Whether physicians are owners, employees, or independent contractors varied across specialties in 2016. Surgical specialties had the highest share of owners (59.3 percent) followed by radiology (56.3 percent). Emergency medicine had the lowest share of owners (27.9 percent) and the highest share of independent contractors (24.8 percent), while pediatrics was the specialty with the highest share of employed physicians with 58.3 percent.

"Patients benefit when physicians practice in settings they find professionally and personally rewarding, and the AMA strongly supports a physician's right to practice in the setting of their choice," said AMA President Andrew W. Gurman, MD, in a press release.

eClinicalWorks To Pay $155 Million False Claims Act

Electronic health records (EHR) vendor eClinicalWorks will pay $155 million to settle claims of misrepresenting software capabilities and giving kickbacks to customers, according to a Department of Justice (DOJ) press release.

The DOJ alleged the Massachusetts-based EHR vendors' software misrepresented its capabilities and took a shortcut to certification due to the company only programming the 16 drug codes necessary to pass, instead of giving it the ability to find any drug code from a database.

According to the DOJ, eClinicalWorks also allegedly failed to properly test the software before it was released, did not meet data portability requirements, and paid kickbacks totaling more than $392,000 to some customers in exchange for promoting the software. The company's actions led to the filing of false claims based on the use of its software, according to the press release. eClinicalWorks has denied the allegations, saying in a statement that it chose to settle to avoid drawn-out litigation.

"Today's settlement recognizes that we have addressed the issues raised, and have taken significant measures to promote compliance and transparency," said Girish Navani, CEO and co-founder of eClinicalWorks, in a statement.

According to the DOJ press release, the settlement also resolves allegations in a lawsuit filed in the District of Vermont by Brendan Delaney, a software technician formerly employed by the New York City Division of Health Care Access and Improvement. The lawsuit was filed under the whistleblower provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.

DPC Pioneers Qliance and Turntable Close

Two pioneers of the Direct Primary Care movement, Qliance Medical Management of Seattle, Wash., and Turntable Health of Las Vegas, Nev. have closed their doors, putting a question mark on the movements' future.

Qliance closed its doors in mid-May after more than a decade in business, while Turntable closed in January after serving the Las Vegas community for three years. Both companies fell on difficult financial times, leading to their demise.

"Unfortunately, the economic realities of the Las Vegas market meant we could no longer sustainably offer care in our downtown location….We flatly refused to compromise when pressured by payers to offer fee-for-service options, or to begin charging a co-pay. We firmly believe that healthcare is a relationship, not a transaction," wrote Turntable Health founder and CEO Zubin Damania, MD in a statement on his website. 

In an interview with Medical Economics, Qliance co-founder and CEO Ericka Bliss cited similar financial struggles. "The inability to secure long-term funding was what drove Qliance to shut its doors….We (had been) working on developing a more advanced primary care model under direct primary care, bringing everything all together to make sure all the pieces were together" says Bliss. According to Medical Economics, Qliance needed loans and contracts that ultimately did not happen.

"We tried to figure out if we could scale back enough to hold tight until the contracts went through, but it didn't work out," Bliss says.

While both practices are closed, their founders believe their time in business served as a way to spread the message to fellow practitioners. "I'm proud that Qliance was noisy enough….We got a lot of recognition and it helped shine a spotlight on this model nationwide. Lots more doctors know about it now," said Bliss.

Quote of the Week

Changing the Healthcare Conversation

"It will take real political capital and political support to take on a $3 trillion behemoth like health care. When better, and whom better, to pick up the baton than physicians?"
– James Doulgeris CEO of Osler Health Management, on the changes needed in healthcare