Independence comes at price many doctors still willing to pay
■ Physicians in private practice say they are struggling financially compared with employed peers, but that the sacrifice is worth the autonomy.
When James Franks, MD, imagined his career as a physician, it looked like the life he remembers his family doctor having.
“My idea was to be the doctor who sits in my office, sees my patients and takes care of them,” he said. “I guess that was me being part naive and part believing in the ideal situation.”
But the reality of life as a solo family physician in rural eastern Arkansas for Dr. Franks is not the easygoing experience he imagined his doctor had. Dr. Franks' practice operates month-to-month financially. He can't imagine a day when he has enough money to make investments in his office. He says he earns far less than he would as a physician employed by a large health care organization, and he lacks benefits such as paid time off and retirement contributions.
But if a large health care organization came knocking on Dr. Franks' door in Forrest City, Ark., asking him to sell, he would decline the offer with no hesitation.
Many physicians are in the same situation as Dr. Franks. They are facing day-to-day struggles to meet payroll and keep the lights on in their practices, believing the business climate will not change for the better anytime soon, that it will in fact get worse before it improves. And yet they willingly work for themselves, even as hospitals buy practices and employ physicians who decided the independent rat race was no longer worth it.
A survey of more than 5,000 physicians conducted by QuantiaMD, an online physician community, and CareCloud, a cloud-based health IT vendor, found 36% predicting a negative profitability trend during the next year, compared with 22% who said it would be positive and 30% who said it would stay the same. Declining payments and government mandated changes (Affordable Care Act, ICD-10 conversion, adoption of electronic health record systems) are among the top issues of concern.
There have been many studies looking at how physicians are doing with things such as meeting requirements for the EHR meaningful use incentive program, but not a lot on how physicians are doing with the business side, said Albert Santalo, president and CEO of CareCloud, which released its survey in late May. “We were actually somewhat shocked at the results we got back,” he said. “The results were somewhat sobering and problematic for us as a society if things continue to trend this way.”
But while the concerns are plentiful, more than 60% of physicians who own their practices say they would not consider selling.
Cardiologists were among the most pessimistic about their financial futures, with 49% saying their financial trend will be “somewhat” or “very” negative in the next year. Still, 44% of those who own their own practices have no interest in selling even though there seems to be a clear financial motivation to do so.
MedAxiom, a cardiology-specific community of health care administrators and physician leaders, conducted a separate survey of 129 cardiology groups for its annual compensation survey and determined independent cardiologists earn an average of 26% less than those in integrated practices. In a chart, MedAxiom pointed to the difference with the bold declaration: “The price of independence.”
For physicians in other specialties, the price of independence may not be money but time — or it could be both.
DID YOU KNOW:
More than 60% of physicians who own their practice say they would not consider selling.
MGMA-ACMPE's annual physician compensation report shows that doctors in private practice earn about 9% more than academic faculty members, but appear to work longer hours. The mean work relative value units for family physicians (without ob-gyns) in an academic setting was 4,723 compared with 4,993 RVUs for family physicians in private practice.
Todd Evenson, director of data solutions at MGMA-ACMPE, said there are similar trends between nonacademic hospital-employed physicians and independent physicians. Those who are independent tend to earn a little more and have a higher rate of productivity, but that is starting to change, he said.
Even though compensation and productivity may be similar, “physicians committed to staying in private practice must have an entrepreneurial spirit,” he said. They will be forced to have a strong understanding of legal and regulatory requirements and the needs of the community. He said some doctors are suited for that, and some are not.
Personal cost-benefit analysis
After ending her career as an Air Force doctor, Ruth Haskins, MD, an ob-gyn in Sacramento, Calif., realized her dream of owning a practice. She ran the practice for four years before selling it for the same price she had purchased it. Dr. Haskins had two young children at home, and she wanted a 9-to-5 job with benefits and extra time to attend school meetings and her kids' sporting events. She knew a job at the local academic hospital would provide a more regular work schedule that would allow her to have the work-life balance she needed.
Soon after starting that job, however, Dr. Haskins discovered that giving up the struggles of owning her own business also meant the loss of her independence, which she desperately wanted back. Five years later, with her children older, she put in her notice at the academic hospital and re-entered solo practice. She hasn't looked back.
Dr. Haskins works with a hand-picked staff who share her philosophy of patient care. She offers the services she wants to offer, uses the EHR she chose herself, and runs the practice the way she wants to run it.
“How many people can truly say they are living out their childhood dreams?” she asked. “I was born to do this.”
She said this despite the fact that the practice failed to make a profit for nearly three years — and despite the fact she works about 17 hours a day both at home and in the office.
Her situation is not unique. In fact, gauging by the watercooler talk she has with other doctors in the labor and delivery wards at the hospital, it seems her situation is par for the course for those committed to remaining solo.
Eric Schultz, executive chair of QuantiaMD, said there's been a big change in the discussions taking place on his company's message boards during the past two years. The online physician platform was launched with a clinical focus. Physicians would discuss cases and trade clinical knowledge. Now, Schultz said, the most active discussion group is one covering practice profitability. Common topics of discussion are “Should I sell?” or “How can I increase performance through automation?”
A few years ago, trends were moving in the direction of physicians selling. Evenson said although he doesn't have concrete numbers to back him up, it appears that the number of practice acquisitions has slowed in recent years. He has heard of many physicians returning to independent practice after their initial employment contracts ended.
“It's critically important for physicians to know that if they want to remain independent, they can,” he said.
Dr. Franks is counting on it, but he would like to make some changes if the opportunity presents itself.
Rather than being bought up, he said he would love to join other solo practices in his area so he could have someone else to share the burden. Until then, the burden is one he happily chooses to bear. “If not, I would have left here and done something else.”