Physician Owned Private Practice Is Still Alive and Well: Here's Why

A death greatly exaggerated...

The Population Health Blog recently broke bread with a Director at the Tucker Advisory Group.  TAG provides professional services to a host of health care entities, including physician-owned provider groups.

The PHB has been skeptical about the death of private practice, and the breakfast did little to change its mind.

What it learned is that there is no shortage of business for outfits like TAG.  A typical private practice client is a group of ten or more physicians with multiple clinics in a multi-county area serving thousands of patients.  These groups range from primary care to pain management to women's service to cardiology.  While their revenues and expenses cannot be taken for granted and payer hassles abound, it's not impossible for a nimble and hard-working group of private practice docs to serve their patient population and still end the year in the black.

In addition, it hasn't been that unusual for individual physicians who are in salaried positions in large hospital-dominated provider organizations to contact TAG to explore the options for going into "private practice."

Anecdotal you say?

Despite the narrative that the death of private practice is "unstoppable," there are plenty of reasons to be contrarian:

1) The latest good information (like this) on physician employment that supports the narrative that private practice is dead is from the AMA's 2012 data base.  While newer data from 2014 indicate that independent primary care practice is dwindling, there are pockets of specialty physician private practice that are remaining strong. In other words, one reason for the growth of salaried physicians is their flight from continuing struggles of primary care, not toward the advantages of employment.

2) Whether they're in a salaried position or in private practice, today's physicians are still demanding autonomy, adequate resources, input and to be rewarded.  Given reports like this and this on getting docs to do what they're told cooperate, is it any wonder that physician entrepreneurship is still alive?

3) And speaking of being rewarded, physician compensation in ACOs don't appear to provide any particular advantages.

4) What about the patients, you ask?  Good question, and you can be sure that the docs are asking it too.

The point?  Large hospital-provider systems relying on salaried physicians are an important option in health care reform.  The PHB suggests that reports of the death of private practice have been exaggerated and it will also remain an important option. 

Stay tuned!

The Death of Private Practice?

Private practice faces the future?

Quick: if you were asked how many practicing physicians have bailed out of private practice and have become employees of large corporations, regional hospitals, accountable care organizations or multi-site clinic groups, would you say.... a majority?  A huge majority?

You'd be wrong.  Most mainstream media reports on the decline of private practice either project the rise of large medical groups or have (shockingly) engaged in anecdotes. In other words, a killer version of the flu is not going to kill millions anytime soon, global warming is not going to result in the sea flooding of central Pennsylvania (at least not tomorrow) and private practice is not dead.

So says this report by the American Medical Association. Using the Physician Practice Benchmark Survey on a representative sample of physicians doing hands-on care more than 20 hours a week, 53.2% of respondents were full or part owners of their practices, while 41.8% described themselves as employed.  Compared to a similar survey in 2007/2008, the number of owners declined by 8%

Surgical specialists (a high of 71.9%) were more likely than adult primary care (50% to 56%) to be owners.  Approximately 60% of physicians work in groups of ten or less and about 18% of physicians are in solo practice. 

Only 23% of physicians were in practices that were partially or wholly owned by hospitals.

While this information isn't all that surprising to DMCB readers, it does point to a slow gradual decline in small physician-owned groups.  That decline, however:

1. does not point to a nation-wide collapse of private practices, which still remain the largest piece of the physician-cased care system, and

2. does not line up a bunch of points that inexorably lead to zero.  In other words, it's just as possible that the slow decline could accelerate or remain the same or level off.

3. does point how important it will be for policymakers, regulators and politicians to consider the well being of small physician groups when they concoct their proclamations on such things as electronic records (very capital intensive), payment reforms (can hurt small business cash flows) or fraud and abuse (audits can bully small practices).

4. is potentially questionable because, once again, the DMCB has to contend with a report that hasn't gone through independent third party review.  It hopes that some or all of the data is eventually reported in a reputable journal.

Coda:

Just in case you're like most smart DMCB readers and want to know the methodologic details: This survey sample came from the 155,000 users of "Epocrates" who use the app to access information about medications; according to the AMA, this pool of physicians appeared to be quite similar to the more than 600,000 physicians who are in the AMA Masterfile. 14,750 Epocrates physicians were asked to participate in the survey and the response rate was 28%.  The responses were "statistically weighted" to match the Masterfile.

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