Tuesday, July 6, 2010

More on the (Non)Death of Small Independent Physician-Owned Primary Care Practices

Somewhere in the Obama Administration, there is an elitist central cabal that operates with the support of the highest organs of our central government. It conspires in windowless basement rooms to plot the gun control, mass vaccinations and the nationalization of key U.S. economic sectors like automobile and chardonnay manufacturing.

Healthcare, however, is its maximum target. Much like pieces on a chess board, and with the support of renegade organizations like the Commonwealth Fund, the New England Journal and UNICEF, it wants to arrange hospitals and providers into regional klepto/monopolies that coordinate care, deprive us of access to breathing as well as dialysis machines and suck up tax dollars faster than Ms. Pelosi can say "but we're saving money!"

Just kidding, but it does seem to the Disease Management Care Blog that a lot is riding on the concept of large, regional and risk-bearing "accountable care organizations" (ACOs) that can reconcile cost and quality. And don't think that there isn't a hospital CEO, academic medical center Board or a medical school Dean that isn't lusting over the prospect expanding and consolidating their local empires under the guise of Obamacare and enlightened not-for-profit community service. Ask these healthcare potentates, and they'll tell you that this is the wave of the future, where size, access to capital and rationalized central planning will finally break the back of health care inflation and those evil insurers. It's Wal-Mart, it's Amazon, it's the electronic record, it's inevitable, right?

It's easy to think that is the conspiratorial purpose of the Central Committee's minions when it comes to small independent PCP clinics. And thanks to the travails of managed care, Medicare's SGR, competition over Botox parties, poaching of patients by Convenience Clinics and dismay over Concierge Practices, what's left of primary care is ready to be swept up into ACOs, right?

Maybe not so fast, according to an article appearing in the July 3 issue of The Economist. Dubbed "The Click and the Dead," it describes the double whammy of transparent E-Commerce pricing and economies of scale that slaughtered smaller book stores and travel agencies. However, it turns out that the very smallest book and travel shops with low numbers of employees, lean overhead and special service niches thrived despite the fierce competition from the Internet and big business.

Which is why the DMCB thinks some primary care practices will consolidate and many will become aligned with bigger health care systems. However, a considerable percent that remain small, minimize costs and, most of all, provide high customer value (defined as a combination of service and quality) could continue to thrive.

The DMCB has opined before about reports of the death of small practices being an exaggeration. Maybe it's wishful thinking, but this article in The Economist is another reason to keep an open mind.

Picture from Wikipedia


Dr Synonymous said...

The DMCB has good insight on the potential for small, elite highly motivated kiosk docs to pop up in malls all over America... or street corners, or closets.

Seriously, to actually survive, they have to initiate direct primary care practice, such as Qliance in Seattle or Health Access Rhode Island, then attract or hold patients who value a personal, relationship focused physician. Then the patient must believe that paying their own money for primary care is worth it.

You are accurate in comments to the effect that few will seek to transform into or continue to be the small, profitable family practices, but many will. In ten years when the smoke clears, we'll know what we should have done. Peace.

Jaan Sidorov said...

So true, Dr. Syn! Ten years from now, all the pundits will be able to take credit for their predictions, because it'll all come true. Practices will splinter into myriad business models. That being said, there's a good possibility that the large publically financed "take a number and wait" clinics could end up at the bottom of the service/profitability heap.

c3 said...

As a "service industry" it makes sense that small, lean staffed physician offices can do well. It seems to me the key success factors will be:
1) excellent customer service
2) ease of access (i.e. same day appt)
3) excellent info systems with a minimum of paper and paper communication (i.e. snail mail and fax)
4) tight integration with other systems (i.e. home health, hospital info systems)
5) good cross-coverage arrangements
6) ?lower physician earnings expectations

I could see an office staffed by an RN and an MD with an "automated" check in system, the physician and RN sharing patient care duties and check in duties, EMR,on-line scheduling, rapid turnaround on phone calls etc

Anonymous said...

From a solo FP with 25 years in, and solo independent for 6 years:

Thank you so much for pointing out this model of independence IS viable and rational.

It is telling that:

1) Mayo clinic in Arizona no longer takes Medicare and INSISTS on "upfront" $1500 payment.

2) House of reps voted 417:1 to confirm the 2.2% increase (really stable) reimbursement for Medicare services after 3 weeks of NONPAYMENT of Medicare claims in June lead to a statement through the AMA, AAFP that 30% OF PRIMARY CARE MDS WERE NO LONGER GOING TO TAKE ANY NEW MEDICARE PATIENTS.

3) There is a movement offoot for "concierge" practices to be more of a "subscription" type fee based practice, where an "enrollment fee" of about $50 per month covers overhead for the doc, and insurance is still used.

4) A recent article in a leading journal states unequivocally that about $250 is spent per year for outpt primary care doctor fees, and if $600 (about $50/month!) was spent up front, then these quality initiatives would be actually doable!

With this model I could do quite well; even if I never go monthly fee, I'm getting there bit by bit with secure email, EMR (x 10+ years), ePrescribing, and 10-15 pts per day in my solo.

Still moonlighting though 1 day a week (if I was at 50 pts/week I wouldn't have to do that either...).

Dr Matt Levin
Family Medicine, Board certified
Pittsburgh, PA