More than half of all practicing physicians are now employed outside of a small, independent practice
By Deborah Jeanne Sergeant
If the billing from your primary care provider is now coming from one of the area’s healthcare systems instead of the office where you see the doctor, it’s likely the physician’s office is part of a growing trend.
Health systems are buying up the practices of solo providers and smaller health offices.
Finances
The organization’s budget represents a big reason why physicians in small practices are shuttering or selling.
According to George W. Chapman, owner of GW Chapman Consulting in Syracuse, more than half of all practicing physicians are now employed outside of a small, independent practice, such as by a health system, hospital or health corporation.
He further said:
• Physician payments from Medicare may go down by 3.36% in 2024, in addition to the 2% decrease this year.
• The American Medical Association estimates that over the past 20 years, Medicare and commercial insurance reimbursement has decreased by about 25% when figured for inflation.
• In addition, physician overhead grows by 3% annually.
“For small groups of two or three, the cost of running a practice is exorbitant,” Chapman said.
Work-life balance
Of course, most physicians of various specialties have on-call hours. But for the small practice, fewer physicians are available to take those on-call hours. Chapman said many work long hours with little vacation time, compared with their colleagues in a health system.
“The generation difference matters between baby boomers retiring who worked 60 hours a week and this generation of doctors, who want lifestyle balance. They’re more than happy to work for a health system and know their schedule is 32 to 40 hours a week and that they’ll have five weeks’ vacation. Things are changing in a lot of professions and many aren’t willing to work 60 to 70 hours a week.”
Patient care time
Another of the reasons that fewer new doctors seek independent practice is the administrative headaches that reduce their time for spending time with patients. Many doctors want to practice medicine to help people, not to fill out forms and jump through regulatory hoops.
Chapman said that he can’t remember the last time a physician asked him to consult on setting up a solo practice.
“It’s just really hard with all the alternative reimbursement models and the paperwork,” he said. “It’s frustrating even for the larger groups. It seems as if Medicare is driving solo doctors into the health systems. I don’t know if that’s their intention, but it seems like they’re telling doctors, ‘Don’t bother with solo practice.’”
In the rare case of solo practice, some doctors opt for concierge offices, which operate outside of insurance reimbursement. However, this prices out patients who cannot afford their higher rates for services.
Staffing woes
Well before the pandemic, staffing had been challenging in the medical field. But since the pandemic ended, it’s become even tougher. The main way to attract nurses has been to increase wages. However, small medical practices struggle to do so.
“Many times, the large systems will price people out of the market,” said Fred Letourneau, CEO at CNY Family Care in East Syracuse. “When a nurse gets a $30,000 bonus to work at a hospital, a private practice can’t do that. The hospitals go to the state to get more money. They drive the rate up for private practices to get more staff.”
He said that his group can’t compete with a rate such as $40 per hour for an LPN because CNY Family Care doesn’t receive funding from the government like hospitals do.
“New York state is supposed to be a state of no corporate practice of medicine, but it kind of is with hospitals purchasing the practices,” he said. “During COVID-19, our office stayed open. A lot of hospitals furloughed workers. The state said they’d reward nurses with a $1,500 bonus if you showed the employees were there. No one in private practice got that bonus. Hospitals are big lobbying arm.”
Future of healthcare
Letourneau thinks that although physicians are not as happy working at hospitals because of the lack of autonomy, “private practice will become a thing of the past, but you could see a resurgence once some of the doctors who controlled the practices are off the scene,” Letourneau said. “Maybe some younger doctors will want to be on their own.”
It is possible that the entrepreneurial spirit of Gen Z could mean more will want to hang out a shingle as an MD.
Letourneau also sees regulations and requirements such as electronic medical records as obstacles. However, as technology advances, that may mitigate these effects. And as more Gen Z doctors enter practicing, their lifelong use of technology will only help them adapt — but this may decrease the patient experience.
“Electronic medical records are arduous because they’re not built with the doctor’s workflow in mind,” Letourneau said. “They’re built by IT guys and so the hospital can garner certain information. We want doctors to be able to talk with the patients. If you build it around a doctor trying click thousands of times, it doesn’t help. You have to build certain things into an EMR and the quality metrics.”
If doctors don’t enter all of the metrics required, they don’t receive reimbursement for the visit, a process Letourneau calls “voluminous.” He said, “I think AI will have a positive impact on this in two or three years.”
Future refinements in the EMRs requirements may also save doctors time.
In the meantime, he views the shortage of physicians as a crisis “worse than it’s ever been,” he said. “We’ve been in a crisis for around 30 years. No one is advocating for the 75-year-old general medical patient who ends up not getting care and they die before they get to the hospital. No one advocates for those who can’t see a primary care provider because there’s no one around.”
He wants to see more flexibility as to who can provide simpler aspects of care, such as lower-level staff providing injections under medical supervision.
Letourneau also wants to see more opportunities for healthcare professionals to receive education, as too few educators are available and too few healthcare organizations provide residency slots.
The effect on patients
Chapman believes that patient benefit when physicians are part of a larger healthcare system, as the accessibility and access to information improves.
“Specialists across the health system are looking at the same health record and you get to know who you’re referring to a lot better,” he said. “The system is managed so the patient gets better management among specialties. It puts all these doctors on the same page.”
He said that most large health systems keep satellite offices open, which helps people in rural areas access care. Some of these offices have specialists keep office hours on certain days of the week so that patients do not have to drive so far. Large health systems also have greater ability to provide virtual healthcare, which also helps rural patients.
Although the absorption into a large healthcare system may mean taking on more patients, Chapman believes that the providers usually get more staff such as nurse practitioners or physician assistants to help them.
