How is physician ownership changing in 2021?

Patsy Newitt -

More physicians are migrating to hospital employment, changing the traditional physician-ownership models of ASCs.

Seven ASC leaders spoke with Becker's on how physician ownership is shifting this year. 

Editor's note: These responses were edited lightly for clarity and brevity. 

Allan Peck, MD. Gastroenterology specialist in Montgomery, Ohio: The two forces of hospital ownership and private equity will again be at the forefront of physician practices in 2022. If there are changes in restrictive covenants, as proposed by President Joe Biden, there will be a significant shift in practice alignments. Physicians are realizing that what is good for hospital administration is not what is always best for physicians and their patients.

Amar Setty, MD. CEO of Patient Premier (Baltimore): Physician ownership is decreasing in 2021. We are seeing greater trends toward employment of physicians. This is because of a number of interrelated factors such as mergers/acquisitions of practice management corporations, a growing push for hospital employment, increased costs of practice ownership and a desire for fixed hours or better lifestyle among younger physicians. The fear of declining reimbursement combined with the complexity of new payment models scares a lot of physicians toward employment. Healthcare has become a "big cap" business requiring market scale, data analytics and risk management — concepts that small practices cannot handle.

Bill Rhoades. Medical director of the Harrisburg (Pa.) Endoscopy and Surgery Center: I feel that physician ownership is going to be changing. Most physicians that own ASCs are not a young breed — there are fewer physicians coming out of school, and that is making the ownership retention even harder. The cost of everything is going up as well — supplies, staff cost, facility overhead. This makes it more difficult to get reimbursements compared to a hospital setting. That being said, physician owners can sell to the local hospital system and make money without the headaches of staff coverage and insurance reimbursements. My area has seen this happen with many privately owned ASCs within the last few years.

John Prunskis, MD. Interventional pain specialist and CMO of DxTx Pain and Spine (Chicago): Physician ownership is changing where it is more difficult to stay in solo or small group practice for most specialties. There are a couple reasons for this. One is how hospitals, unfortunately, currently get compensated more by Medicare and private insurers for identical procedures compared to an ASC or office location. Hopefully, this excessive payment to hospitals, which is bankrupting Medicare, should be ending or reduced in the next couple years. As hospital payments are reduced, hospital employment of physicians should see reductions as well. Many physicians are dissatisfied with hospital employment, but feel they had little or no choice in signing on to be hospital employees. Physicians are finding that a larger nonhospital- employed group model focused on excellent patient care, physician respect and autonomy is a better career opportunity.

Stephen Amann, MD. Gastroenterologist with Digestive Health Specialists (Tupelo, Miss.): Physician ownership is changing, certainly for gastroenterology, from self-employed to many considering or proceeding with shared ownership of a practice, such as private equity, to being fully employed by hospitals and multispecialty clinics. This will potentially have positive and negative effects on healthcare as well as physician autonomy and quality of life. During the COVID-19 pandemic and lockdowns, gastroenterology physicians in private practice tended to lose the most income compared to employed physicians. These economic pressures, insurance cuts, regulation and prior authorization issues all add higher demands on physicians with subsequent significant challenges to private practice gastroenterology.  

Tammy Smittle. Owner of Smittle Consulting (Austin, Texas): In the last 25 years of being a perioperative nurse, it's interesting to see the cyclical pattern of surgeons and their ownership within ASCs. It's twofold. The younger surgeons are gravitating into hospital employment models — ASC ownership is limited in this group. The other side is with the more-established surgeons. In this group, I see the shift surgeons wanting to be their own boss and have their own ASCs without the partnership of the larger ASC companies. I believe that patients win when surgeons do have ownership in an ASC, therefore giving them a voice in the care that is provided. 

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