Practices are getting larger to provide micropractice service

Medicine has gone down Alice in Wonderland’s rabbit hole. Looking at the size of practices today, it seems like some of them have taken red pills and the rest have taken blue ones: most of them are getting bigger and bigger and bigger, while some are getting smaller and smaller. As the giant practices gobble up their competition to become ever more gargantuan, others are shrinking down into micropractices.

Everyone has an excuse.

Accountable Care Organizations supposedly mandated by the Affordable Care Act require giant conglomerates of physicians to provide all the care (care management, actually) for whole populations in order to (somehow) spend less while doing so. That this fails mathematically seems as lost on the current crop of folks as it was on their predecessors who brought you HMOs twenty years ago. Still, it requires doctors to organize into large groups; the larger the better.

Others speak of economies of scale. Larger groups are supposed to have more buying clout for supplies and other services. That may be, though I do pretty well at Costco. They certainly have more clout negotiating with payers, though again, this has nothing to do with saving money, since they often have enough pull to rake in significantly more of it. In fact, there are many diseconomies of scale: larger groups need more space (higher rents) and more support (higher payroll). It’s much harder to make changes in how things are done when having to go through a chain of command.

Because of these and other reasons, many doctors — both primary care and specialties — are going the other way: smaller and smaller. The end result, of course, is the micropractice: one doctor, all alone, usually supported by a fair amount of technology. Answering machines (or Google Voice) to pick up the phone while seeing patients and electronic medical records (both for medical documentation and for scheduling) make the model viable.

I’ve gone both directions. When I first started out in practice, I assumed I would eventually take on partners and grow into a group of some kind. I bought an office condo, then later bought the one next door and expanded. I took on a PA, then an NP. The practice grew all right. My strategy was to get the numerator where it should be, then grow the denominator. Things didn’t quite work out, though. With each addition, my income nose-dived. There was no way I could afford to bring in another doc. Eventually both the PA and the NP left for greener pastures. The staff shrank from four back down to two, then to one. Looking back over the finances, I discovered something interesting: the smaller I was, the better I did.

Now I watch small groups merge into bigger ones and big ones merge into enormous ones. Everyone else seems to see this as progress. Everyone except the patients, that is.

Think about the Patient Centered Medical Home (PCMH). Here is what it’s supposed to do:

Provide comprehensive primary care for people of all ages and medical conditions. It is a way for a physician-led medical practice, chosen by the patient, to integrate health care services for that patient who confronts a complex and confusing health care system.

I’m already doing that. In fact, I’ve written about this before, and my conclusion stands: the goal of the PCMH is to make a large group practice function like a solo physician’s office to the patient. Think about it: same day appointments? Check. See the doctor you want when you want? Check. (I’m the only doc in the office.) Friendly one-on-one staff who know who you are when you call? Check. Much of the rest of it is by definition impossible to implement in a solo office (Team meetings? Leadership training? “Roles and responsibilities that are stimulating and rewarding”?) Some of it makes no sense at all. (“Budgeting for forecasting and management decisions”? What does that even mean??)

What’s lost in the push to get bigger are the considerable advantages of being smaller:

  • Business flexibility
  • Lower absolute overhead (smaller space; fewer supplies)
  • Patient (ie, customer) service

You know; all the good things that make both patients and doctors happy.

So let everyone else go ahead and merge into one enormous, ever-expanding group practice — sort of like mercury coalescing (cue T-2) — until the entire country is nothing more than one huge provider network. I’ll be off on my own, where my micropracticing colleagues and I will be quietly caring for patients the old-fashioned way: one at a time. Oh wait: that’s the only way they can be cared for, whatever the wonks say. They’ll be healthy and I’ll be happy. What more can anyone ask?

Lucy Hornstein is a family physician who blogs at Musings of a Dinosaur, and is the author of Declarations of a Dinosaur: 10 Laws I’ve Learned as a Family Doctor.

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  • http://twitter.com/BizStrategist Will Peters

    It’s interesting you state that the smaller you were, the better you did. That’s incredible! How about micro practices that offer different services partnering in medical parks?

  • http://www.thehappymd.com/ Dike Drummond MD

    thanks for this post Dr. Hornstein and you pulled your punch here me thinks. The major thing that separates the two ends of the size spectrum is OVERHEAD.

    The big practices have huge overhead expenses, so they have to drive more volume to maintain the ability to pay a reasonable wage. Unfortunately that same volume means the docs see 25 or more patients a day and take home less than 40% of their billings – sometimes FAR less.

    A micro practice has a micro overhead – or at least it should. Pam Wible and her Ideal Medical Care model has an overhead of less than 10%. This means lower patient volume, more time, better relationships without taking a pay cut. Add in a concierge fee and you have a radical departure from the BIG MEDICINE model.

    With the coming massive doctor shortages – patients will be willing to pay a little extra to see an actual doctor. I think we are about to see a very interesting market shift at the level of primary care towards the little medicine end of the continuum. We live in interesting times indeed.

    Dike
    Dike Drummond MD
    http://www.thehappymd.com

  • JMS

    I wonder whether it’s really true that the only way to take care of
    patients is “one at a time”. With the enormous burden of chronic
    illness in this country and now with many evidence-based practices that
    we know will help keep them healthier, there seem to be many ways of
    doing population-level preventative care (using a large database to find
    your patients who are due for follow-ups or tests and doing active
    outreach, for example). As more practices get on EHR that type of data
    will become possible for most physicians, but if you have a very small
    office you may not have the staffing to support pulling patient data and
    outreaching on a regular basis. Just a thought.

  • http://www.facebook.com/sakina.bajowala Sakina Shikari Bajowala

    Great post, thanks for sharing! The ideal medical practice model is the way to go: more autonomy, less red tape, more patient-centered care. Bigger isn’t always better.

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