The pros and cons of leaving private practice
A growing number of physicians are leaving private practice and instead opting for employment. According to a report from Accenture, only one in three doctors will remain independent by the end of this year.
Many of the physicians who are closing up shop are moving to hospitals or medical groups. Kurt Mosley, vice president of strategic alliances for Merritt Hawkins, told Healthcare Dive that doctors are also seeking employment at large clinics or retail medical locations (e.g., urgent care centers, stand-alone emergency care facilities, ambulatory surgical centers), or being hired by insurance companies.
Reasons for leaving private practice
One of the biggest reasons doctors are choosing employment over private practice is changes to reimbursement. “Payments are being tied to quality that’s hard to measure, technology that’s expensive to implement and complex compliance issues that demand extensive overhead,” says Dr. David Friend, chief transformation officer and managing director of BDO’s Center for Healthcare Excellence & Innovation. Friend says in many cases, doctors are being paid more for the exact same service when they provide it through a hospital. “If you’re going to make less in private practice with these reimbursement shifts and with all of the overhead and regulatory responsibilities, why fight that?” he asks.
Another reason doctors are seeking is employment is to improve their work/life balance. Dr. Talbot “Mac” McCormick, president and CEO of Eagle Hospital Physicians, says many doctors prefer to be employed because their work day is more structured and more predictable. “They don’t have to deal with the business burdens of a private practice,” he says. “In short, they can ‘have a life’ outside their jobs.”
Jennifer Malinovsky, a partner of Nelson Mullins Riley & Scarborough in Atlanta, says her physician clients have considered integration with hospitals for a variety of reasons. “For example, healthcare reform initiatives regarding bundled payment, medical homes and ACOs encourage integration among providers,” she says. “Some providers, particularly in urban areas, are concerned that if they do not integrate, they will be left standing alone.”
Malinovsky also points out that many physicians who are fresh out of medical school have incurred significant amounts of debt “which makes guaranteed salaries from hospitals more attractive than the prospect of ‘making it on their own’ in private practice.”
Other reasons physicians have given for moving away from private practice include challenges related to the use of EHRs, increased overhead costs, and too much focus on administrative tasks rather than patient care.
Is there cause for concern?
Heather Lavoie, Geneia chief strategy officer, says there’s some risk the new MACRA rule may help this trend to accelerate. “MACRA is clearly intended to bring smaller practices into the fold and get them involved in the shift from volume-based medicine,” she says.
“It’s a sad commentary on our current healthcare environment that high costs and accumulating challenges make private practices increasingly unsustainable,” says McCormick. “And the declining number of private practices places a burden on hospitals, too, as more patients visit the hospital ER to get the care they need.”
From a patient perspective, Malinovsky says there are both positives and negatives to physicians moving away from private practice. She says on the one hand, reduced competition can lead to higher prices (this may be particularly true in hospital-owned, provider-based outpatient facilities). “In addition, hospitals tend to take longer to make decisions about various matters, and there tends to be significantly more levels of bureaucracy when your provider is associated with a larger health system,” Malinovsky says. “On the other hand, larger health systems can provide significantly greater access to a wider variety of services and better coordinated care for patients who have multiple medical conditions.”
The benefits of staying in private practice
In a blog post for the American Academy of Family Physicians, Dr. Peter Ripley said he believes one of the most important benefits of private practice is that all the decisions that will affect the practice are made by clinicians.
Ripley also said there is less pressure in private practice to see a certain number of patients each day than there is in some employed settings. “I can make that decision based on how many patients I think I can manage appropriately,” he said.
In Ripley’s opinion, private practice is “extremely rewarding”, partly because he gets to choose his own work hours, what services he wants to provide and when he takes a vacation, among other things.