More Data on Physicians Leaving Private Practice; Discussion of Findings

The idea of many physicians leaving private practice for salaried, hospital jobs seems to be well established (see: Physician Private Practice Declines; the Last Barrier to Emergence of "Big Medicine"; The Increasing Tempo of Physician Practice Purchases by Hospitals; Some Independent Physician Practices on the Brink of Financial Failure). I have been on the hunt for articles that provide more details about the factors that contribute to this trend. Below is excerpt from an article that sheds more light on the topic (see: Due to Rising Costs and Health IT Mandates, More Doctors Leaving Private Practice):

By 2013, only 36 percent of doctors are projected to remain independent while subscription-based services for patients continue to increase. An increasing number of U.S. doctors are expected to leave private practice for hospital employment over the next 18 months, due to rising costs and technology mandates, according to a new report from Accenture. By the end of 2013, Accenture also estimates that one-in-three doctors remaining independent will offer patients with subscription-based services, such as telemedicine or online consultations, for sustaining profit – a trend that is expected to increase three-fold over the next three years. Over the past decade, the number of independent U.S. physicians has dropped dramatically, from 57 percent in 2000 to 39 percent in 2012. By the end of 2013, Accenture predicts this number will likely drop further, to 36 percent, and is 3.6 percent lower than Accenture’s 2011 report. The Accenture findings resulted from extensive market analysis on U.S. physician employment and a survey of 204 physicians in independent practice that was conducted in May 2012. Among the other key findings of the survey:

• The majority (87 percent) of physicians surveyed cited the cost and expense of running a business as a chief concern.
• Most doctors (65 percent) joining health systems said they expect to make the same or less compensation than in private practice.
• Sixty-one percent cited business operations as a main reason for seeking hospital employment rather than remaining independent.
• More than half of doctors (53 percent) cited electronic medical record requirements as a main reason for leaving private practice.

A couple of points in this article jumped out at me. The first was that the approximately one-third of physicians remaining independent will offer what is described as "subscription-based" services such as telemedicine or online consultations to sustain profit. So, on the one hand, we see physicians using information technology (IT) to assist them in delivering patient services more efficiently. This reminds me of a radiologist who said that the use of RIS/PACS technology, combined with digital imaging, enabled him to maintain his income. This was despite significant drops in the professional component reimbursement he was receiving for each case. In other words, IT was helping him to increase his efficiency. 

Contrast this with the statement in the article above that more than half of physicians "cited electronic medical record requirements as a main reason for leaving private practice." In other words, IT in the form of the EHR, was driving physicians out of private practice. This may be partly due to the expense of deploying office EHRs or that the use of this technology was hindering their efficiency and productivity (see: "Usability Failures" of EMRs Frustrate Physician Users; When Doctor's Say "No" to EMR Deployments). I am not sure how to interpret this latter finding because the salaried physician working in a hospital environment will surely be required to work with an EHR. However, this may be less of a source of frustration because the hospital-based, salaried physicians may be less concerned about their personal productivity. This does become the concern of the hospital executive officers, however. They may attempt to use features of the EHR to increase hospital reimbursement but such a strategy may be short-lived (see: Distrust of "Templated" Physician Notes in EHRs; Implications for the Future).

Comments

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[Joe Plandowski]

Hospital-employed physicians is a concept that was tried before and failed miserably. However, let's assume times have changed and it will work this time around.

I read the reference article and did not find any information on the size of physician groups becoming employees of hospital systems. I suspect this is generally happening with smaller sized groups (2 to 4 physicians) because the cost of operating a small practice is too great. However, lots of groups are getting very large because they are attracting physicians who can't make it alone and do not want to be hospital employed. The independent practices standing when the dust settles will have 50 to 200 or more physicians and will be a formitable force in their marketplaces.

Joe Plandowski
847-840-3077

[Murilo Melo]

I am surprised that the need to implement an EMR is such a prevalent motive, as there are some apparently adequate free cloud-based solutions. The argument of productivity is interesting. As tablet hand-writing recognition software becomes better, their use with a more structured approach (for patient info, vitals, etc) may be something to look for. In the long-run, this employment tendency may lower salaries as we have seen in Brazil.