GLOOM AND DOOM FOR INDEPENDENT PHYSICIANS

GLOOM AND DOOM FOR INDEPENDENT PHYSICIANS

Independent physicians are those who work solely for their patients and are not employed by a hospital, group practice, clinic, or third party payer. These are the doctors who used to populate what’s called the private practice of medicine. That designation barely exists any longer because remaining independent and financially viable are mutually impossible. The January, 2023 issue of MEDICAL ECONOMICS takes a sympathetic position on practice viability in an article titled, “Where do you want to be in 2023?” The author is the CEO of a concierge medicine consulting firm so his bias favors the concierge model (see “The Concierge Practice Model,” published 8/4/2021), but he is very open about the many negative reasons independent physicians see trouble ahead. 

Independent physicians have seen overhead rise and reimbursement decline for decades. “Diminishing government and commercial insurance payments plus constantly rising overhead costs” have placed independent physicians at a considerable disadvantage. “Even the staunchest optimist can’t make a case for financial improvement in 2023.”

The Medicare conversion factor, the dollar figure used by the government to determine how much a doctor gets paid by Medicare, is $3.63 lower in 2023 than it was in 1998. I know that’s a small amount (10%) over a period of 25 years, but do you know anything you can buy anywhere that has gone 10% down in price?-certainly not vaccines, medical supplies, rent, or employee salaries!

The past two decades, overhead to run a private practice increased by 40%, and you can also see insurance reimbursement, especially from Medicare, has been on a steady decline. A survey by a large group practice management company showed that 90% of private practices saw costs rising faster than revenues. That bodes poorly for financial viability. 

Physicians attempt to reverse the decline by seeing more patients, but each physician can see only so many patients before he/she makes mistakes or corners are cut. Medicare and other payers have established quality guidelines that require more documentation than time allows. Yes, you can see more patients, but have you fulfilled all the criteria to be paid for that person’s diagnosis.

Becoming an employed physician has not led to a reduction in burnout, nor has it improved the financial well-being of many physicians. In med school doctors aren’t trained to run a business. This knowledge comes by joining an established physician who has practice management experience, or by spending every free movement learning all the nuances of running a medical business. The workload is overwhelming, believe me. 

Nothing is improving for private practice physicians. Seeing one patient after another doesn’t cut the mustard. You have to have a procedure that brings in extra revenue to sustain financial viability. You have to hire a salaried physician extender, or two, who can see more patients and supplement what patient care revenues you generate. Don’t be surprised if your physician changes his practice model. The requirements he must fulfill to be paid are unreasonable and require more of his/her time. He cannot continue to lose money while he’s working himself to death. This is a serious and realistic concern. Medical Economics realizes this is a crisis, but instead of being an advocate for change, reserves solutions to opinion articles like the one I’ve cited. 

It surprises me that more physicians don’t try the concierge model practice or a “cash only” model. It probably has to do with the demographic make-up of their patients as well as the lack of business acumen, Human Resources experience, and knowledge of coding and billing. Some physicians want to take on this responsibility. I did for 23 years. I learned a lot from my first partner and with that foundation sustained my business for the next 23 years, learning as I went along. It worked until Medicare began squeezing more until at the end of the month there was nothing left to pay me a salary. I chose the employee route because at age 63 I wanted to work less, not more. It worked out well.

The article this blog used as a reference is not the least bit optimistic for the future of independent, private practice, physicians. In fact, it is a plea/warning to independent docs to make some kind of change before you go bankrupt. The disappearance of private physicians has been coming for many years. At this moment the end is near. The article asks “Where do you want to be in 2023?” The answer should be “busy in an active practice.” I fear, however, the answer more realistically is “hanging on for dear life, and ready to quit!” 

Reference: Bauer, T. Where do you want to be in 2023? Medical Economics 2023 January;100(1):21.