How can independent physicians survive the new health care climate?

Life is tough for physicians in solo and small group practice.  The federally mandated introduction this fall of ICD-10 requires physicians and their staffs to learn a new system of coding diseases.  “Meaningful use,” another federal program, requires physicians to install and use electronic health records systems, which are complex and expensive.  And PQRS, the Physician Quality Reporting System, is beginning to penalize physicians for failing to report individual data for up to 110 quality measures, such as patient immunizations, each of which takes time to collect and record.

Of course, such requirements are not being imposed solely on solo and small-group physicians.  In many ways, they affect all physicians alike.  Yet the burdens of complying are disproportionately high for small groups, which cannot spread out the costs of purchasing equipment, hiring employees and consultants, and training personnel over so large a number of colleagues.  Hospitals and large medical groups can afford to hire full-time specialists to meet these challenges, but such approaches are not economically feasible for a group that consists of only a few physicians.

Such challenges are not just raining down —  they are pouring down on the heads of physicians.  Some physicians fear they smell a conspiracy to drive solo and small-group practitioners out of business.  And the problem is not just the money.  It’s also the time.  Many physicians already work long hours and simply cannot afford to shop for such systems, negotiate contracts, and enter data.  We personally know physicians who report spending two hours each evening completing records that they did not have time to attend to while they were seeing patients.

Not surprisingly, independent physicians appear to be going the way of the dinosaurs.  One study found that only 17 percent of today’s physicians are in solo practice, a figure that stood at 54 percent in 1980.  Moreover, the percentage of physicians who describe themselves as independent practice owners has dropped from 62 percent in 2008 to just 35 percent last year, manifesting an acceleration in the pace of decline.  Conversely, over the same period, the percentage who say there are now employees of a hospital or medical group has increased from 38 percent to 53 percent.

We recently spoke with Georgia Blobaum, a medical practice administrator in Lincoln, Nebraska.  Blobaum has worked with many independent physicians who are now spending so much time trying to comply with mandates of the federal government, insurance companies, and hospitals that they have little energy left to care for patients.  “My heart really goes out to these doctors,” says Blobaum.  “They find the whole thing just so wearying.  They want to do right by their patients, but big organizations are making life so difficult for them that many are just throwing up their hands in frustration.”

Blobaum says many hospitals and health systems are seizing this decline in morale as an opportunity to snap up small physician practices.  “They know how discouraged physicians get when they contemplate all the work necessary to implement their own electronic health systems.  Then in comes a hospital who says that they will take care of all the IT and paperwork, and pay the physician more than they are currently making to boot.  Only two to three years later do physicians realize that their new employer is just piling on even more requirements and cutting their salary.”

“What is even worse,” Blobaum continues, “is that these physicians are giving up their autonomy.  I was talking recently to an oncologist.  He said that if he sells his practice to the local hospital, it will penalize him unless he refers all his patients to its facility and the physicians it employs.  But he thinks this is not always the best thing to do.  He knows his patients, and he knows his colleagues.  If he thinks a particular physician is a good match for a patient, he wants the freedom to refer to that colleague, without regard to who he or she happens to work for.  For this reason, he will not sell.”

“Too often,” says Blobaum, “health systems deliver independent physicians an ultimatum:  ‘Either you join us as an employed physician, or we will replace you with other physicians who are eager to have your job.’”   Blobaum believes this is one of the greatest sources of the decline in contemporary physician morale — physicians are being made to feel alone, isolated, and unable to continue to operate independently.  “As a gastroenterologist told me recently,” she continues, “physicians are growing so accustomed to being told what to do that many have seem to have become paralyzed.”

Physicians in Nebraska are so concerned that they have formed a new organization of independent physicians.  Called OneHealth Nebraska, it helps to lower the costs of operating a medical practice by pooling resources.  For example, it will offer consolidated credentialing, so each physician does not need to fill out pages of forms for every hospital and insurance company.  It will also offer its members access to group purchasing and training, quality and compliance monitoring, and practice management services.   The hope is that independent physicians can keep practicing independently.

So far, the group has signed up more than 300 Nebraska physicians, and it is continuing to grow rapidly.  Blobaum explains it this way: “What we are talking about here is not a union, with collective bargaining and the right to strike.  But it does represent the unification of physicians around something many of them believe in deeply; namely, the mission of preserving  the independent practice of medicine by enabling physicians to continue to focus their attention on delivering high-quality, patient-focused care.”

“Our members believe that physician independence is a crucial ingredient in the recipe for high-quality healthcare,” says Blobaum.  “We admit that the pressures on physicians to give up ownership of their medical practices are huge, but we also believe that it is important to for them to maintain their independence.  By banding together and pooling their experiences and resources, physicians can put themselves in a much better position to put the interests of patients first, which is ultimately what makes practicing medicine rewarding in the first place.”

Richard Gunderman is Chancellor’s Professor, Schools of Medicine, Liberal Arts, and Philanthropy, and Matt Alban, MD is a professor of medicine, both at Indiana University, Indianapolis, IN.  This article originally appeared in the Health Care Blog and is reprinted with the authors’ permission.

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