How new doctors will kill private practice

How new doctors will kill private practiceWhat are new medical graduates looking for in their first job?

According to American Medical News, they’re looking for jobs with the following criteria: “The most important items would be the ability to show a stable, growing practice and quality of life … The stability would come from a practice that generates most of their collections from commercial insurance, as Medicare cuts are looming. The ideal quality of life would be a four-day workweek with little to no call. Financially, they would need to offer employment plus production bonus and would need to be above the 50th percentile for their specialty.”

Good gig if you can get it.

Private practice is unlikely to meet those specific demands, which is one reason why the days of the independent physician are numbered.

The answer? Hospital-based practice, or practices that are part of larger, integrated health systems:

More physicians also want or need flexible work arrangements such as part-time hours. This is more possible in an employment arrangement with a hospital or large practice.

“The generational differences, along with reform, and the extreme shortage of doctors have all literally combined and formed the perfect storm.”

Today’s graduates want the financial stability of a salary to pay off rising medical school debt. Those who graduate with over $200,000 in debt range between 20 and 30%, depending on the source.

Furthermore, health reform is going to further pressure physician salaries by cutting Medicare payments. That’s going to make it difficult to thrive in private practice.

The combination of a deteriorating fiscal environment and the desire for a better lifestyle is going to have repercussions in two areas: rural medicine and private practice doctors nearing retirement. According to the article, “Small practices in rural areas will find it even tougher to recruit … Only 6% [of graduating residents] wanted to work in communities smaller than 50,000.”

These factors are leading doctors to seek employment at larger organizations which may be the “perfect storm” that health reformers are hoping for to tilt the country’s doctors away from small, fragmented practices.

New physicians who increasingly value lifestyle and work-life balance will only accelerate this seismic shift.

 is an internal medicine physician and on the Board of Contributors at USA Today.  He is founder and editor of KevinMD.com, also on FacebookTwitterGoogle+, and LinkedIn.

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  • http://twitter.com/DarrellWhite Darrell White

    What are your thoughts on this, Kevin?

  • http://www.amandaxi.com/ Amanda Xi

    How else can our generation find a way to reliably pay off our loans? When you do the *math*, there is absolutely no incentive to go into private practice or rural medicine [obviously there are students who are genuinely interested in rural medicine, but I'm increasingly hearing my peers cite their compounding interest loans, car payments, apartment rent and plain livelihood as reasons for looking into other specialties].

    Furthermore, we are a generation that believes in proper work-life balance and avoiding burnout. After all, no one benefits from an overworked, overstressed physician. I believe that unless something changes in the way that the system compensates physicians, my children will never know what “private practice” means.

  • Matt Meyers

    isn’t there a difference between what you *want* in a job, and what you’re willing to accept? 

    granted, your analysis of the survey may be correct if the market can supply all graduating physicians with the jobs that they *want*.

  • http://pulse.yahoo.com/_7YLSXP5NHFJUSWGX3FTV33YXMY Scott

    New doctors, I’d be cautious about thinking that becoming an employee of a hospital will guarantee financial security.  Medicare (whom the hospitals are critically dependent on) is going to cut payments with some commercial insurances following suit.  Things are going to get rough and hospitals will turn around and demand that you run faster on your hamster wheel.  If you are independent, you also will have a lot of suffering coming your way, but you will maintain control of your practice and be able to adapt and deflect the government’s increasing pressure to practice cookie cutter medicine.

    • http://www.amandaxi.com/ Amanda Xi

      I am probably just be naive in this matter — but by starting a private practice, don’t you risk ostracizing certain income brackets because of selectivity in insurance providers? And what about private practice for specialties that require hospitals’ equipment [anesthesiology, radiology... etc]? 

      • http://pulse.yahoo.com/_7YLSXP5NHFJUSWGX3FTV33YXMY Scott

        We are very rapidly approaching the point that starting a private practice will not be financially possible, especially for the high-priced equipment requirements for the specialties.  I’m a family physician and nearly all of the local primaries have become hospital employees.  Being independent is still possible; it’s not easy and it will only become more and more difficult.  As for the insurance issue, I would counter by questioning the wisdom of continuing to participate in the dysfunctional insurance system.  I believe that insurance has done more harm to the doctor-patient relationship than any “harm” from refusing to participate in the more abusive plans, including Medicaid and Medicare.   

        • http://www.amandaxi.com/ Amanda Xi

          Some part of me almost wants to go into family medicine/primary care just to try to make a private practice work [I'm thinking a Jay Parkinson-like model], but I also cannot ignore the fact that I “want it all” and the way that the system is set up right now, that’s not possible without trying to go into a more lucrative direction. 

          I agree on the insurance system. But I also do not know enough to suggest how we could possibly change it. In the end, our country is driven by money, right?

  • http://twitter.com/chasedave Dave Chase

    The data I’ve heard repeatedly cited says that costs go up when private practices are bought by health systems. It’s pretty much a given that healthcare providers of all types are going to feel the squeeze. One would think that if the most expensive place to deliver healthcare (hospitals) would feel the squeeze the most, the hoped-for lifestyle advantages of employment will prove illusory.

    I’ve written here previously about Drs Qamar (MedLion), Forrest (Physician Care Direct), Bliss (Qliance) and Koniver (Organic Medicine Now). I’ve had the pleasure of interviewing all of them and they have the “good gig if you can get it” already because they were willing to chart their own path. At least in Primary Care, they’ve proven you can have a nice lifestyle AND take home a healthier income while delivering superior health outcomes, not to mention reducing downstream costs – a win-win-win-win if there ever was one. The question then becomes whether they are an anomaly or the pioneers of a new model by disintermediating insurance out of day-to-day medicine. I’m betting on the ladder. 

    Complementing my interviews with these Direct Primary Care pioneers, I have spoken with many concierge docs. Theoretically they are providing the highest touch, round-the-clock primary care anywhere. Yet, they tell me that 2/3 of their patient interaction no longer has to be face-to-face…it just was when they were under the insurance yolk (i.e., couldn’t bill unless they forced people to come to the office). Now if you re-imagine primary care to combine the model of the DPC pioneers with some remote medicine that can reach anywhere including rural areas 7×24 and couple it with some periodic visits by docs (and NPs & PAs) to those rural communities, it’s possible to reach just about anywhere.  It just requires a willingness to think outside the health insurance box (for primary care). 

    There’s a group thinking outside the health insurance box called the Healthcare Delivery Innovation Alliance (www.hdia.org) to develop scalable models that go beyond the pioneers. The folks I’ve seen involved with that aren’t homogeneous but they all share a desire to rethink delivery rather than tweak things on the margins. 

  • http://onhealthtech.blogspot.com Margalit Gur-Arie

    I don’t know if this is inside or outside the box, but the notion that folks in rural areas should only be able to see a doctor on TV and “periodically” have an NP-mobile show up, is extremely disturbing to me. We already have food deserts out there (where you can’t get healthy food), I doubt that we need to begin a concerted effort to create medical deserts as well, mostly in the same underserved areas.
    If those graduating from medical schools now, have no desire to go where they are needed, perhaps we should think way outside the box and graduate folks that do. The tiny new medical school in Salina Kansas comes to mind and the host of foreign trained doctors, with less extravagant expectations, also looks interesting…..
    I have a funny feeling that in due course all future doctors will owe these unlikely pioneers a debt of gratitude for salvaging the profession.

    • http://pulse.yahoo.com/_7YLSXP5NHFJUSWGX3FTV33YXMY Scott

      What makes you think that someone in India (who has to be pretty bright and motivated to go through the process of moving to a foreign country and integrating into a foreign culture) would come rescue the US healthcare system knowing that they will be subject to the same abusive insurance system/malpractice industry?  Why do people think that foreigners are so stupid that they would go through all of this so they can salvage the US healthcare system? 

      • http://onhealthtech.blogspot.com Margalit Gur-Arie

        These folks are anything but stupid. They are already here, fighting a huge and very dumb bureaucracy, and working in all sorts of menial jobs, wasting all that talent and education.
        http://www.ama-assn.org/amednews/2011/07/25/prl20725.htm

        One man’s “abusive insurance system/malpractice industry” is another man’s dream come true.

        • http://pulse.yahoo.com/_GXO5UT3MGTPBRYKXHHFG6NCRO4 S

          Sorry Margalit but as a rural doc who has a ground level view, I can say you don’t know what you are talking about. I have seen literally generations of FMG’s come and go from the hospital-based practice. The come, fill out their J-1 requirement and as soon as able, leave. Again, and again and again.

          • http://onhealthtech.blogspot.com Margalit Gur-Arie

            Yes, but what if there were long strings (much longer than 2 years) tied to those residencies? Wouldn’t doctors prefer practicing in rural areas instead of driving taxis? I may be mistaken, but I thought that you could only get a J-1 after you have been accepted into a program. How about the people described in the article above?

    • http://pulse.yahoo.com/_MKTIVWFKCAZZA7CE74HC6ECONE Jop

      The risk reward is too lopsided. FMGs have an advantage because they graduate younger and with substantially lower debt. But once they obtain their residencies, why would they settle for undesirable jobs when so many other doctors are not? It simply won’t work. Doctors want a better quality of life because practicing medicine has become a lot more complicated and stressful over the last 30 years.

  • http://www.facebook.com/profile.php?id=1265183958 Bradley Evans

    One worry is that new physicians will be paid by an organization, making them part of a bureaucracy. This may distance them psychologically from patients. In a bureaucracy, it’s hard to find out who or what is responsible. Is this the future of medicine? Have new physicians mortgaged their ethics to large companies?

    Another worry is the top-down thinking of modern healthcare planning. I am in private practice. When people talk about “community health” I think of one by one, one on one healthcare creating a healthy community. This is bottom up thinking. Top down thinking is characterized by central control, policies, procedures, and bureaucracy. Medical care is looked at in a legal way, of meeting a community standard. This becomes the ethics of our profession. What does everybody else do? If everyone else does it or it’s policy, it must be right. If only one person does it and it’s not policy, it’s wrong. The person who deviates is punished. This can discourage innovation. We become a profession of sheep.

  • Anonymous

    I am a first-year med student, and a fair number of my classmates are looking to work in a smaller community. I would say about half of my first year cohort is interested in practicing outside of a major city. I myself would like to work in a community that is ~ 60k- 80k people. however, I am not interested in primary care. I know that there is a big need for physicians in rural setting, and I think that there are a lot of future docs hoping to meet that need. 

    • http://pulse.yahoo.com/_MKTIVWFKCAZZA7CE74HC6ECONE Jop

      The article refers to residents in their last year of medical training. Perhaps between now and six years later, when you have $200,000 in debt and have worked punishing hours in residency, your opinion will change.

      Whatever the case, I’m in the same boat as you are. The only recommendation I’ve gotten from current doctors is to go into a field with decent quality of life and good pay. Since most of them have 30+ years of experience, I’m inclined to be influenced.

  • http://www.facebook.com/people/Craig-Koniver/100001463176810 Craig Koniver

    Certainly there are many problems with the way health care is currently delivered, but ultimately the choice for how to practice and where to practice and how many hours to practice is up to each individual physician. Most doctors entering practice don’t even know about direct-pay practices and how sustainable they are. Not only do these models improve access to care but they also improve the quality of care that is given as well as contributing to a high quality of life for the physicians engaged in this type of practice. Yes, the current insurance and government mandated ways of health care certainly encourage physicians to join a large group or hospital, but those times are changing

    As patients and physicians wake up to the reality that there are better alternatives, more new physicians will be made aware of these opportunities. Better alternatives to care include models in which patients directly pay doctors for their services.  I know most physicians label this as Concierge medicine and dismiss it as boutique type medicine. But the reality is that the quality of care and the access to care that is provided in these models is higher than in traditional practice settings. As well, the physicians who choose to create value by spending more time with patients enjoy their practices more and so it truly is a win-win.

  • Anonymous

    I think there is, and always will be, a sizable minority of patients who are uncomfortable with the corporate medicine model. They don’t like it that an employee doc is following orders from the executive suite. They don’t like it that no one in the office can answer any of their billing questions. They don’t like it that, with sizable deductibles, they have to pay a facility fee in addition to the visit fee, even though the office is ten miles from the hospital. I think the demise of private practice is not as imminent as some think.

  • http://twitter.com/adventuresinmed adventuresinmedicine

    Private practice or hospital-based conglomerate, what matters most is physicians’ well-being. Having toiled the rigors of both private practice and hospital positions, there is but one thing I can say with confidence: Happier physicians are better suited to take care of patients.

    Times are frightening for all of us, and change abounds. The US healthcare system can be a complex, boggling mess. Does it not make sense, then, that physicians should have their personal interests in mind? In the wild woods of medicine, many take the path with the fewest thorns. 

    Though residents and fellows are provided with superior clinical training, guidance is sorely lacking when it comes to learning about the practical and business sides of medicine. Many residents feel frustrated, confused and lost during their transition into a new career. They’ve traveled far and yonder to become a physician, yet they forget — or are too busy — to realize that there is much more to life than being a strong clinician. 

    The perfect job and the perfect life is nonexistent. Whether you find yourself a physician, a street cleaner or anything in between, the ticket is to discover and pursue your purpose. Define your true north. Once you do, my friends, you will overcome your biggest challenge, and will find meaning in whatever direction you rightly pursue. 

    -Dr. Goodhook

    • http://pulse.yahoo.com/_MKTIVWFKCAZZA7CE74HC6ECONE Jop

      I think you’re missing the point. For many that purpose is to start and raise a family. As more women go into the profession, many want to take time off from work or become part-time once their kids are born. With gender roles changing, many men also want to do the same.

      • http://onhealthtech.blogspot.com Margalit Gur-Arie

        There are zero to none other professions, or careers or jobs, where one can take time off to raise kids and/or work part time, and bring home anything close to what a physician can. Actually on average physicians, including primary care, make up 9 of the 10 best paid professions in  the US (CEO is the tenth one, somewhere close to the bottom)

  • Anonymous

    My small single specialty private practice is still earning a living in Cleveland, but long term viability of this model is tenuous.  We’re being squeezed by surrounding mega-medical institutions that employ thousands of physicians.  Many primary care private practioners have been picked off by these folks, which diminishes our referral base.  The profession I will ultimately leave will be a different beast than the one I entered.   New MDs need to love what they do and keep their eyes wide open.

  • Anonymous

    The days of the small private (one-doctor) practice is rapidly coming to a close for treating average Americans. Today we see over 50 million Americans uninsured and another estimated 25 million underinsured. Combined, that’s one-fourth of America’s population. Those numbers grow by double digit percentages every year and the cost of health care insurance continues to skyrocket beyond any hope of affordability. There’s little hope of slowing these numbers. Many consumers, especially seniors, don’t take their prescribed medicines as ordered. Instead, they will try to stretch their one-month supply to last for for a few more days or weeks before they go to the pharmacy to get another refill. They simply can’t afford the cost of these medicines and doctors would never think to help them by making sure a generic is prescribed. The Affordable Care Act is offering incentives for groups to form Accountable Care Organizations (ACOs). This concept puts primary care and many specialties and even pharmacies under one administration structure. These ACO Groups get paid for outcomes instead of for volume of services. That means one blood test, not four! That means one x-ray, not four! That means one MRI, not four! The idea is to get all of the professionals within an ACO Group to cooperate and coordinate to make you well and to keep your well. As long as the patient stays well, the ACO Group makes money! As a matter of fact, if there’s nobody sitting in the waiting room, that means the ACO is doing it’s job very well because they are still getting paid and all of their patients are well and don’t need to see them. Today, doctors in various single private and unaffiliated practices never talk to each other about your care. So, it’s up to the consumer (the patient) to coordinate their own health care. Will the ACO concept help to lower costs? If it lowers the number of unnecessary tests and unnecessary procedures, I suspect that fact alone should have a positive impact on costs, right? Health care in America ranks 37th worldwide and yet it’s the most expensive health care system in the world. Most countries spend less than half of what Americans spend for health care and yet these other countries have equal outcomes for much less cost. As far as wait times for appointments, in recent studies, our system is on par with the rest of the world. There was a time when you could get an appointment within days of calling a doctor. Now, it could be several weeks to several months to see some specialists. America’s health care system is broken and needs serious attention. If we continue with the status quo, we will see many more people joining the ranks of the uninsured.

  • http://www.facebook.com/profile.php?id=558041620 Vikas Desai

    They are digging their own grave. The reason you go into medical school and residency and take endless amount of crap from senior residents, attendings and nurses is that one day you get to be the top person. You start working for these huge organizations and it will lead to corporate structure and adminstrators telling you what to do. Have fun…..I am 35, 6th year in practice I work 40 hours a week and can still run my practice profitably, now is the time for young docs to take a stand against large organizations before MD’s get swallowed whole. Perfect example is NS-LIJ in Long Island New york, run by businessmen. Just a matter of time till they go public and start catering to shareholders, 

    • Anonymous

      Value in our health care system should be provided for all participants, not just for providers and Big Pharma. The consumer has been ignored for many decades. Yet, they are the payers. They are they customers. They should be treated with honor and respect and not considered as just people who offer only an “endless amount of crap”. They are the goose that lays the golden eggs and all they get is disrespect. If anyone is digging their own grave, it’s prima donna providers who think patients are just so much chattel and can continue to be abused. Shame on such a regressive attitude. That is why the fee-for-service model will hopefully soon become history. With any luck, the future of health care will reward wellness and good outcomes, something that commands very little attention in our current broken system.