Trendspotter: Private Practice Physicians Need to Join Together

December 8, 2010

A staggering 40 percent of physicians say they plan to leave patient care within the next three years, according to a recent poll by the Physicians Foundation. That spells big trouble for healthcare reform and for medicine in general. If even half of that number of doctors retire, find administrative positions, or leave healthcare entirely, we’re going to have medical assistants taking care of patients and the remaining doctors tearing out their hair in frustration.

A staggering 40 percent of physicians say they plan to leave patient care within the next three years, according to a recent poll by the Physicians Foundation. That spells big trouble for healthcare reform and for medicine in general. If even half of that number of doctors retire, find administrative positions, or leave healthcare entirely, we’re going to have medical assistants taking care of patients and the remaining doctors tearing out their hair in frustration.

While 68 percent of the physicians who responded to the survey think the Affordable Care Act (ACA) will hurt their practices, reform is not the only factor that has made so many doctors unhappy. The continuing threat of a 30 percent reduction in Medicare fees, the increasing pressure on doctors to get electronic health records, and market forces that threaten independent practice are all on the minds of physicians these days. Thirty-four percent of the respondents said that reform is the factor that will have the greatest impact on their practices in coming years; but 36 percent named the impending Medicare cut.

Meanwhile, trends that have been gathering for years or decades are snowballing on private-practice doctors. For instance, practice expenses have long been rising faster than revenues. In that context, the Medicare cutback is only the coup de grace. And the increased hiring of doctors by hospitals, which now employ more than half of all U.S. physicians, imperils the private practitioners that are left in hospital-dominated markets. By promoting payment bundling and the formation of accountable care organizations, many doctors fear, the reform law will make it even more difficult for independent practices to survive.

This explains some of the findings of the recent physician survey:

• Eighty percent of respondents said the ACA will harm private practice;
• Sixty-eight percent opposed payment bundling;
• More than half of respondents said that reform will cause patient volume to increase, but 69 percent said they can’t handle any more patients; and
• Sixty percent said that they would close or restrict their practices to certain categories of patients. Of those physicians, 93 percent said they’d close their practices to or limit the number of Medicaid patients they treated, and 87 percent said they’d do the same with Medicare patients.

The Physicians Foundation report that includes the survey results also incorporates several case studies of practices and healthcare organizations that are pursuing various reform or alternative reimbursement models. These include patient-centered medical homes, accountable care organizations (ACOs), and concierge practices. But the study doesn’t indicate what percentage of physicians are pursuing such models. My unscientific guess is that most doctors in private practice are planning do to little beyond changing their payer mix, or, in some cases, acquiring EHRs in the hope of qualifying for the government’s ARRA incentives.

This reactive posture guarantees that physicians will be at the mercy of payers and/or hospitals during the rapid changes that lie ahead. But it need not be that way. As a recent Trendspotter points out, some physicians are forming IPAs or reviving physician-hospital organizations to take advantage of reform trends.

The AMA recently sent a letter to the Centers for Medicare and Medicaid Services (CMS), asking the agency to take a number of steps to ease the transition of private practices to the new era of accountability. Among other things, the AMA would like the government to make it easier for IPAs to bargain with payers; provide loans and technical assistance to small practices so they can join together to build ACOs; and introduce new reimbursement methods that will cover the costs of doing population health management.

What all of this reflects is the need for physicians to come together and use their clout as the real providers of care to win concessions that will preserve private practice. Unless physicians assert themselves and learn how to work with their colleagues to coordinate care and improve quality, they may soon have no choice but to join large healthcare organizations that are building ACOs or other structures capable of assuming financial risk.

So if you’re thinking about throwing in the towel, there may be an alternative that will allow you to keep practicing medicine without giving up your independence. But it will require organization and the willingness to collaborate with your colleagues.