Is Private Practice Dying?
Reposted from an article printed in Utah Medical Association Bulletin Aug-Sep 2010. Although the dates and cost of a pack of cigarettes of changed, the principles are still the same and more pertinent today as we are seeing this in motion. Is Private Practice Dying? By Karen Radley, MD
Over the past few years, I have witnessed a rural community struggle with finding and keeping physicians. This is not a unique phenomenon to this or any rural area for that matter. In fact, when I decided to move to Price I was told that I probably wouldn’t stay long as it is a revolving door. I wish I could say this wasn’t true. In 2002, when I started in Price, 12 different left the area or newly arrived. Recently this has happened again. Since January 2007, there have been 11 physicians or podiatrists to leave (or pass away) or arrive at Price, Utah which has a total medical staff of 23 active members. This says a great deal. I don’t think this is because Price is a horrible place to work or live. I don’t think that this is that unique, but a problem felt by most rural areas. I do think that there are many factors that have contributed to this turning over of medical providers. The last two physicians who have come (with two more coming in the next year) have signed contracts to be employed physicians. In an area that most consider being the rugged west or last frontier, we providers often wear our independence like a badge of honor. This has brought up the question about why physicians are now signing on for contracts as employed physicians.
I have been part of the recruiting process; reviewing applicants, interview lunches/dinners, etc. I can say that after having one OB/Gyn leave in March 2008 it took until May 2009 to have a new OB/Gyn employed and in the area. In the interim, the other remaining OB/Gyn also left the area. This stress along with being overworked prior to this took a toll. We saw the same with a general surgeon, who left in December 2007 replaced by another general surgeon, employed and ready to work, in March 2009. Again, in the interim, the general surgeon still in the community took a severe beating and a great deal of stress, very little sleep and an illness during the course of trying to get someone else here. In both situations, I don’t think we would have gotten anyone recruited at all if they hadn’t had an option of signing on as employed physicians. Why is this?
Being in private practice, particularly solo or small group practice, can be overwhelming. I am sure much of what I will refer to is not just felt by rural physicians or by primary care physicians but likely something any and all physicians in private practice dealing with. In private practice, the physician often has to take on many roles or wear many hats.
First, one has the responsibility of being a small business owner. If done correctly, there are many regulations that one must comply with just like any other small business owner. One role that needs to be addressed is that of human resource director. The HR Director’s job can be summarized in the formation of two key resources: the Employee Handbook and the company’s Operations Manual (do you have these in your practice?). The Employee Handbook sets forth policies for the company regarding equal opportunity, recruitment and hiring practices, disciplinary and firing practices, employee pay (how determined, over time, reviews, bonuses, raises, holiday pay, sick pay), other employee benefits such as insurance or retirement programs, notification of Division of Work Force Services on employment changes, policies on drug and alcohol use, smoking policy, dress code, sexual harassment, violence in the workplace, and basic job responsibilities/descriptions for each employee.
The Operations Manual should include how your company conducts business such as hours, customer/patient rights, scheduling, phone procedures, privacy practices/policies for patients as well as company and staff, medical records management, customer complaints, billing procedures/compliance, worker’s compensation issues for employees, and now red flag rules. The HR Director should be training the employees in HIPAA, OSHA, CLIA, other rules and, basically, how to do their job. Although you may not be the person doing all of this (I hope you have a great office manager), ultimately the failure to do so stops with you if you are the business owner. One should have a billing manager or director who oversees compliance issues with billing and policies regarding contracting with patients for billing services and patient responsibilities, submission of claims, payment of claims and receivables and how processed, following up on unpaid claims, timely filing, billing to patients, charity care, over-payments and collection policies for accounts and defaults. A system of checks and balances helps to make sure this is all being done, currently, not fraudulently, and in a timely manner. Including in there somewhere one is supposed to make sure of correct, complete payment according to one’s contract. The problem is attention is usually turned away from this role to the role of medical provider. I can also say that watching the new reform issues be voted in has been very disheartening as a business owner. Through the Recovery Act, I am now mandated as a physician to have an electronic medical record system in place and be able to do meaningful use of my record system or be financially penalized, (all for the privilege of being in practice and providing for Medicare patients at an underpaid rate (does this make sense to anyone?)).
The paperwork burden that was added in through healthcare reform, not for being a medical provider but just for being in private business, is being overwhelming. We haven’t even gotten to deal with issues of unforeseen consequences that will come from the new healthcare reform/regulations or new banking regulations. There is a concern in this country that we no longer make anything because of the cost of doing business (whether directly financial or due to unforeseen consequences brought on by regulations and oversight) has become so high that most of the manufacturing sector has sent all or part of the business overseas. This is a much-politicized issue and this is not the issue of the topic at hand, wherefore, I will not delve deeply into this. However, I will be happy to refer you to real mom and pop small business owners who are feeling the same squeeze and are faced with the same issues into taking business overseas as well—not just fat cat corporation owners that we are led to believe are reaping third world countries for profit. We are making the environment for doing business in our country so hostile that we are seeing failure to keep business here and support our own people. Now, after seeing this finally spill over into healthcare, I understand.
Now, we have to evaluate the responsibility of having a medical office and private practice. To be in medicine one either has to go against the system and do a cash-based business or go with the flow and become enrolled in Medicare, Medicaid and/or insurance contracts. There is a middle ground that is slightly mixed with certain services but, due to the heavy-handedness of big brother, you can’t offer bottom dollar to reduce costs for those who aren’t in the ‘system’ or you risk the penalty of Medicare audits and have to pay a large penalty (thank you to Medicare for RAC!). Do you ever notice that you are rarely directly mandated so as not to infringe on your rights (the recent mandate of purchasing healthcare being an exception), you are just ‘pushed or nudged’ into the situation because if you don’t agree, you have to make serious changes to spin yourself out of the system?
We are expected to either function as an attorney who practices contract law to protect ourselves in the process of contract negotiations or we get the privilege of spending a great deal of money on attorneys who do contract law, not just with a single employer, but with every insurance company we contract with. As contracts are the brunt of the insurance business, they can/are willing to hire a whole panel of attorneys to watch out for their best interests. It is obvious who gets the upper hand here. If you choose to operate on a cash basis, the patients have been trained to think physicians are not worth more than their co-pay and they will choose to go where their insurance will be processed rather than possibly pay for excellent, cheaper care overall by just paying cash at the door. This is also a great irony. Given that a package of cigarettes in Utah now averages about $6.50 and the average co-pay is $10-$15, I find we are now, in the eyes of many patients, worth about as much as 2 packs of cigarettes.
A recent excerpt from Medical Economics [July 9, 2010, p.16] states that 65 percent of established recruited physicians were placed in hospital-owned practices and 49 percent of physicians hired out of residency or fellowship were likewise placed in 2009 (citing Medical Group Management Association’s “Physician Placement Starting Salary Survey: 2010 Report Based on 2009 Data”). In other words, 2/3 of all physicians who have been in practice already are now choosing an employed arrangement!
To add to the dim picture, the AMA had a regional seminar on July 12, 2010, in Chicago that was presented as a pathway to help physicians succeed under the new healthcare payment reform (Patient Protection and Affordable Care Act, aka “Obamacare”). In the slideshow presented by Rebecca Patchin, MD, AMA Board Chair, and Harold D. Miller, Executive Director of the Center for Healthcare Quality and Payment Reform, the reform of the healthcare system will, by necessity, require physicians to conglomerate into larger entities such as independent practice associations, large single-specialty groups, large multi-specialty groups, physician-hospital organizations or integrated delivery systems…notice the obvious exclusion of solo or small group practices! This is available on the AMA website if you don’t want to take my word for it!
I think at this point, it is safe to say that medicine in private practice as we currently know it, particularly if you are in a private solo or small group practice, is dying…not necessarily of its own accord but due to government bureaucracy/policy. We will soon be extinct. It won’t be an all-out war where you are ‘forced’ to quit your practice the way you currently know it. You will just gently be ‘nudged’ to do so if you wish to be paid in the current reform model. I guess with Cass Sunstein as the Obama administration policy czar (office title: Office of Information and Regulatory Affairs) and his ‘nudge’ theory (Nudge: Improving Decisions about Health, Wealth and Happiness), we should have seen it coming and not expect anything less.
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