Is it the End of Private Practice?

November 8, 2010

I didn’t need the Wall Street Journal to tell that the days of “private practice” are numbered.  According to recent numbers, fewer and fewer medical practices are under the ownership of physicians.  Even in my corner of the economically secure State of Texas, small practices are folding faster than beach chairs at high tide.

I was driven out of private practice in 2004 by rising malpractice premiums and plummeting reimbursement.  In Texas at the time the trial attorneys ran the place and medmal insurance carriers simply couldn’t keep up with the greed.

Medical practices are just too expensive to run and the services that physicians provide are dangerously undervalued.  You do the math.  Sure it’s a complicated issue.  But the end result is institutionally employed doctors with institutional pay and the risk of institutional service.

Of course we need to contain costs.  And I know, it’s about the patient and nothing else.  And all doctors are filthy rich.  Of course they are.

Self-annointed experts blather about doctors, medical economics, and solutions.  Government bean counters and consultants think they’ve got it figured out.  They have no idea what we do, where we’ve been, or the staggering self-sacrifice necessary to manage a panel of chronically ill patients.

I spent the best years of my life working 15-hour days as a scut monkey training to get where I am.  But the next generation will be more judicious.  As society sees what doctors do as a commodity, society will see commodity doctors.

The plight of the physician in America is now considered dead last.  But don’t cry for me.  Cry for your self.


Gregg Masters November 8, 2010 at 9:41 am


Well at the risk of more [useless] blather…here it goes.

Hard to challenge your conclusion as well as the likely direction of the key trends. But ‘interesting energy’ Bryan…perhaps a calling to leadership?

There is way too much fatalism, and ‘poor me’ victimization in dis-organized medicine today; which I also sense in your piece.

Where is the ‘what’s my (our) part’ reflection? Where’s the ‘ownership’ of the dysfunction?

Texas as a ‘healthy’ health care economy: Perhaps from Rick Perry’s POV, yet there are many uninsured Texans who beg to differ, and legions of under-insured by day. The least employer based coverage, and pervasive sales of ‘mini-med’, aka junk health insurance due to scant regulatory oversight.

Just sayin’.

DrV November 8, 2010 at 10:22 am

Wasn’t meant to be an ouchie! It’s just that physicians are an entirely unrepresented group in health care. Everyone gets weird when we suggest that our needs deserve a little attention

Regarding fatalism, I think the generation of physician-vicims is slowly retiring and a new generation of pleasantly passive nubiles is taking its place.

And yes, doctors need to own a piece of past dysfunction. But going forward we still need bright, well-educated young people motivated to muscle through the years of training necessary to do what we do.

But in the end, if we don’t care for the doctors, there will be no one to care for the patients.

And thanks for commenting, Gregg. I always respect your opinion.

Gregg Masters November 8, 2010 at 3:40 pm

Thanks Bryan! Copy that….

The leadership thing is real. Not sure how to catalyze though there is promise from new media and enabling technologies. The trick is the ‘how’ of the execution.

One side bar, we spontaneously pulled together a ‘tweetup’ at the AMA’s Annual meeting today (though I am attending virtually via the #AMAmtg hastag) somewhat on the heels of the thread developed by some as to AMA’s role or absence of same to serve. See:

Only a few have confirmed so far; but it goes to the ‘real time’ and perhaps flat (crowd sourced) agile nature of the technology fueling not only the conversation but perhaps even seeding new notions of (dare I say it) whay constitutes ‘leadership’, or even a retooled AMA 2.0?

Thanks for your post and comments.

Brian November 8, 2010 at 12:03 pm

Pains me to read an article lime that. I have been solo for past 5 years and hopeI have another 20 to go. I can run my practice better than a hospital group can. I believe there is still a future for the independent doc, but hard to convince graduating residents this.

DrV November 8, 2010 at 12:14 pm

The inevitible changes in reimbursement will make the model ultimately unsustainable. Large groups that leverage economies of scale will probably linger on. How hard the next generation wants to work will depend, in part, on how they are valued.

Sorry to start a Monday this way!

Brian November 8, 2010 at 1:21 pm

Just takes innovation and offering a level of service t cannot be matched by a large group. I have started doing house calls, daytime secure instant messaging, and available by cell/text 24 hours a day. Unless there is a single payer(government) solo will survive. Patients want to be cared for by THEIR doc, not a conglomeration. That is why I will see patients past 6 tonight.

DrV November 8, 2010 at 2:56 pm

Thanks for your insight, Brian. I’m learning here as well.

Natalie Hodge November 8, 2010 at 1:26 pm

Nice Post Brian, I had the fortune to speak at Medfusion this week with a great group of entrepeneurial speakers. I met Steven Knope who has written about his experience in ” Concierge Medicine” and I consider him a bit of a ” Rosa Parks” which I announced to the crowd at the beginning of my talk. I go on to focus on the importance of disruptive innovation, as the forces of reform are too weak and slow to make much of a difference. The argument is always made that ” If all the doc’s are moving to cash practices, then that leaves more work for the rest of us” BUT the fact remains that without a viable business model and the longer we remain in the mindset of ” incremental innovation” with traditional health IT and depending on the forces of reform, we will continue to fail. Remember the multiple disruptive business models Clay C discusses in Innovator’s Prescription are UPON US. Retail medicine is fast approaching with it’s solution shop midelevel model. One of the legacies we hope to leave in live is to excite a new generation of physicians to be able to consider primary care again because of Personal Medicine’s Direct practice model and drastic cost reductions by harnessing the power of 4G, EMR/PHR, Mobile, and Ecommerce. John Doerr from Sequoia calls it the ” Third Wave.” Either we will innovate or we will lose. I’ll send you a link to the talk when I get it all uploaded to our site. Hope to see you down in texas soon. Best, Natalie

David Locke November 8, 2010 at 8:41 pm

Health IT is totally dependent on non-market forces, which slows down innovation on the IT side. Nowhere am I finding that EHR systems are being installed for any reason beyond compliance. When I mention markets based on the exchange of the information in EHRs, HIPA stands in the way, and encryption, an insufficient solution, grants an unrealistic security to strategic records.

Client-based innovation is critical. The doctors are the client, as such, the world will achieve innovation much faster than waiting for Health IT.

Gregg Masters November 8, 2010 at 1:36 pm

Natalie, plz clue me in too! Well written post, btw.

Chukwuma Onyeije, M.D. November 8, 2010 at 7:10 pm

It’s The End Of The World As We Know It (And I Feel Fine) ~ R.E.M.

I think that Natalie and Brian are on the money. Dr. V. I actually think this is a great discussion to start on a Monday. The optimist in me has a lot more hope and faith when I see the playing field for young doctors. I suspect that they will do just fine; however, they will be operating in a much different environment.

But as I have indicated elsewhere the laws of supply and demand are in our favor.

However, the successful private practice physician of the 21st century will NOT do it the way that you or I did it in the 80s and 90s. No way.

It’s important to distinguish the platform from the content.

Years ago; I was saw the advent of the compact disc as a fad. I was content with my Walkman. I even told people that I preferred analog sound to digital sound. Regardless. My personally held beliefs regarding what I thought was a better platform was only a (misplaced) allegiance to a platform that was quickly becoming obsolete. We all know how that story ended. But guess what. Despite the fact that it was difficult to move away from my cassette tapes I eventually had no choice. The conversion process was long and difficult. It involved the cost and inconvenience of re-purchasing a large amount of music. But in the end; I ended up with something better. Fast forward a few years and the CD is also going the way of the cassette tape and don’t be surprised if 10 years from now your kids are laughing at your iPod.

Here’s the point. Although the platform can change; the content stays the same and potentially improves with time. Kathleen Battle sounds better on MP3 than on a cassette and I’ll never go back.

This is the way that I explain disruption and innovation in medicine to medical students who are bombarded with doom and gloom from physicians in my generation. The platform will inevitably change but as long as you maintain the content you can still obtain enjoyment and financial rewards from the practice of medicine.

So perhaps this is the end of private practice (as we know it)… I do not feel it is the end of hard working, smart, dedicated professionals with a desire to alleviate suffering. Sure there will be changes in the way that care is provided. But ultimately; if we do not cling to the way things have always been; we are likely to get something better in the end.

So yes, changes in reimbursement will likely make the (current) model unsustainable but I don’t think we can account for all of the variables that might change in the future. That, in essence, is what makes disruption so, well, disruptive.

DrV November 8, 2010 at 8:12 pm

Reassuring and optimistic. Thanks for such a comprehensive and thoughtful response. I’ll remember this angle.

John Mandrola November 8, 2010 at 10:37 pm

One of the most stressful times in the EP/Cath lab is around three o’clock in the afternoon.

Why? Because it was when many of the staff “clock-out” and the number of available rooms decrease dramatically. The clock watching starts even earlier. Get your cases done, or get in line for the remaining rooms is tacitly understood by all.

People have families and life priorities. I get that. But I hope that doctoring never reaches that point.

Dr O, you are a beautifully expressed optimist. If nothing else, this is good for your heart. But I agree with you that for now and the foreseeable future, the good of medicine (as a career) is beating the bad.

From an unenlightened Facebook naysayer to a present day FB/twitter/blogger fanatic, I agree things change…hopefully, as you suggest, for the better.

Great stuff!


DrV November 9, 2010 at 9:34 am

John – Your real-world insight is priceless. Clock watching: The first sign of physician-as-line worker.

Gregg Masters November 8, 2010 at 7:19 pm

On point to the ‘end of the world as we know it’, check out ‘Doctors: The Sky Is Not Falling’ for additional wisdom of the elders – if you will:

Marya Zilberberg November 8, 2010 at 7:27 pm

Here is one thought:
I think Gregg’s point about leadership is spot on!

David Locke November 8, 2010 at 8:49 pm

Management will turn doctors into labor. Apparently the AMA isn’t preventing this, so you probably need a new organization, an organization that can legally lobby. Unfortunately that just replaces management with politicians. What other solutions can you think of?

DrV November 9, 2010 at 9:36 am

Real representation is the first step. This has been sorely absent over the past 50 years.

Dyck Dewid November 9, 2010 at 6:19 pm

Great discussion and stretching all my rubber bands my fair doctors.

Its not that I’m an optimist about this seemingly dire quagmire. I take comfort in nature’s maybe most sublime wisdom. And to realize (instead of the limited intellectual compulsion to say, I know) that suffering is the great teacher, is to have deep confidence that life is unfolding as it should. If suffering brings change- actually, fundamentally it also gives light to all life on the planet. The suffering is not unfair. It is even-handed in nature, just as death begets life and the cycles of Create – Sustain – Destroy are exquisite and inescapable.

Darwin posits, no species can be unchallenged or unduly advantaged lest it over-run the earth at the expense of all others.

This may be invisible to most, as we toddle toward our human “involution” (going inward) to spiritually understand and grow together. Being invisible to the limited vision during our suffering is no surprise.

DrV November 11, 2010 at 10:31 pm

(squinting and slowly nodding) Okay…I think I see what you’re saying.

Jimbino November 10, 2010 at 10:48 am

Yeah, I’m a self-anointed expert on what’s wrong with Texas Medicine–I’m a very unhappy medical consumer. I cry no tears for the future ofTexas Medicine. Doctors and dentists have brought these problems upon themselves and well deserve to lose their freedom to keep practicing the way they have been doing.

I’m with Milton Friedman, who opposed licensing of medical practitioners. It’s just a monopoly license to cheat and steal from the consumer. A doctor or dentist who really cared about the consumer would long since have:

1. Published prices for all procedures on the web. Instead, they have become experts in hiding all information. We all know that Medicare and Medicaid require pricing by CPT Code. If Walmart and Target can practice price competition on the Web, so can the doctors and dentists. Those who hide the information deserve to be sued by mad patients when they screw up. I spent an hour on the phone with MD Anderson just in order to find out what they charged for a routine colonoscopy. They should have their medical franchise taken away for that type of maltreatment. Just see how much time you will spend calling around for pricing of a colonoscopy in Austin and how much you will waste getting the pricing for a routine cleaning of your teeth. It will take you hours and you will be talking to some idiot at the front office who will first ask you if you have insurance. Insulting! Walmart and Target don’t ask you if you have insurance when you walk in the door. Then you ask if they give discounts for cash payment. They don’t know; they don’t care if 3% of your $1000 medical or dental bill goes off to Bank of America! Why should they? You’re only a patient and they only pay attention when you employ a lawyer to talk to them!

2. Brought an end to discriminatory pricing. MD Anderson quoted me a price shy of $5000 after that hour of waiting, but admitted that they accept Medicare patients, charging Medicare less by a factor of 20 for the same procedure. Any medical practitioner who does wallet biopsies deserves to be somebody’s employee and be sued when he screws up. Walmart and Target not only publish their prices but charge everyone the same who walks in their door. I have read of physicians who publish prices and shun price discrimination. But they are all off in Florida or South Carolina. There are NONE anywhere around Austin that I have found, and I have tried.

Let’s hope Walmart starts hiring doctors and dentists and running our medical care; then we can begin to expect fair and decent care. Walmart and Target are well on the way, offering vision care, clinical care, $4-a-month drugs and so on.

DrV November 11, 2010 at 10:34 pm

Um, as someone who has grappled with licensure here in the State of Texas I can tell you that it’s more than a platform for greed. And let’s plan to talk again after Walmart takes over health care…

I could go on and on here.

Dr Synonymous November 10, 2010 at 11:28 am

Thanks for the post, Dr V. It’s a great wake-up call with another perspective on our reality. As a family physician in private practice (I own my own debt), I see (and feel) the daily pressures for financial survival, but so far, the incredible satisfaction of being responsive to my patients is still sustaining me to quest for a different financial model for practice. This is such an intense time that it forces each physician and patient to struggle with issues of cost and fairness.
To the extent that primary care physicians aren’t just feeders for the medical industrial complex, we are one hope for our patients to get the best care possible in a relationship based decision process. As we seek new partners and new business models to survive the next wave of healthcare (when it’s one word, it’s about money) reform, we need to be ever mindful of the importance not just of the patient, but the patient-physician dyad that may secure small victories for both. The small victories, when magnified across millions of patient-physician encounters could “go viral” and win the day. Hang in there, folks.

Davis Liu, MD November 11, 2010 at 7:28 pm

I would disagree that “institutionally employed doctors with institutional pay” will result in “institutional service” . Integrated healthcare organizations don’t have to provide impersonal care, but can deliver more personal care as we have more information available at our fingertips. JD Power’s 2010 survey affirms this – The primary care doctors I work with at Kaiser Permanente Northern California are quite happy to have an EMR available with real-time medical information 24/7, a competitive salary, and to work with a group of collegial colleagues (both primary care and specialty care).
Now we aren’t for all doctors. This is why primary care will survive as solo practice doctors with low overhead or others, who are entrepreneurs, who setup virtually integrated with technology – The first year medical students I train are excited to see a different primary care than the one that currently exists. All of these are the best chances for our specialty to survive despite the ongoing challenges.

Maggie November 15, 2010 at 12:43 pm

My husband is a private practice solo doc and we’ve been mulling over his future in medicine – it took 20-years to pay off his college and medical school debt, took another five to pay off the loans to buy the practice he took over when the doc he worked for retired, and now he faces potential extinction? He loves what he does, but the constant uncertainty is making him rethink the future. At 50, he can and would love to work as a physician until 65-70, but as it is now, he’s already clocking well over 80-hours a week and with rising overhead, expected salary increases for staff, crazy increases to health insurance that the practice pays 100% of premium and funding of HSA’s each….coupled with declining reimbursement despite seeing more patients each week….something’s gotta give. He works 27-days a month, takes one week a year for vacation, drives an 11-year old car and we live modestly – and he’s it for his patients given his specialty with no other option for 200+ miles… he ponders, what to do?

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