Amid rising health care costs, will independent physicians go the way of the dodo?

bar chartTwo new studies confirm the distressing decline in the number of doctors in private practice in the United States. Medscape describes a recent Health Affairs study showing that physicians in groups of nine or fewer dropped from 40.1 percent in 2013 to 35.3 percent in 2015. Much of this change occurred in primary care.

Investigating the flip side of this coin, Avalere Health and the Physicians Advocacy Institute found that the percent of physicians employed by hospitals or health systems increased by almost 50 percent from 2012 to 2015, from 95,000 to 141,000. In 2012, just one in four physicians was employed by a hospital; by 2015, that number had jumped to 38 percent (see chart).

As docs become hospital-employed, health care costs jump

Should we care? You bet. As hospitals buy up independent physician practices, the cost of health care goes up. The same procedure by the same doctor at the same office will cost you two to three times more once your doctor hangs the hospital sign on his front door. Medicare proposals to lessen this effect are unlikely to change the basic dynamic: care in a hospital-owned facility is costlier than in an independent practice.

You can hardly blame doctors for abandoning their practices. Faced with the cost of shifting to electronic health records, a mountain of new paperwork and quality measure requirements, and a smaller reimbursement rate from Medicare compared to their hospital-employed peers, independent physicians are hard pressed to stay afloat financially.

Will independent docs become extinct?

Independent docs going extinct?Tilting against these trends, I have three longer-term hopes. One is that patients will eventually come to the rescue. We’ve seen how rising health plan deductibles have boosted patient awareness that the cost of care varies depending on the facility they choose for treatment. It’s a small step forward for patients to see a similar financial benefit in their choice of an independent doctor.

My second hope is that employers will begin educating their staff about the benefits of an independent physician and show them how to use online cost-comparison tools.  The goal?  To reduce the company’s overall health care costs, including insurance premium hikes and out-of-pocket costs for employees.  Thirdly, I hope that formerly independent doctors might return to private practice. Why would they do this? Because hospital employment means a loss of autonomy. Corporate-wide protocols, along with pressures to refer patients solely within the hospital system, can often interfere with a doctor’s clinical judgment. Fewer things are more irritating to physicians than an administrator questioning their judgment.

Ultimately, if we care about improved care and reduced costs, we need to continue the drumbeat of positive news and evidence about independent physicians. They are everything health care is supposed to be about, but they are becoming an endangered species. We can’t let that happen.

Leave a Reply

Your email address will not be published. Required fields are marked *