The biggest threat to physician ownership — 3 physicians share

Self-employed physicians continue to face risks as new physicians tend to gravitate toward the benefits of employed models.

Here, three physicians share their views on the biggest threat to physician ownership.

Note: Responses were presented alphabetically and edited for style and content:

Question: What's the biggest threat to physician-ownership moving forward?

Sukdeb Datta, MD. Medical Director of New York City-based Datta Endoscopic Back Surgery & Pain Center: As the landscape of healthcare shifts, each year brings its share of insurance cuts and evolving technologies. Every aspect of healthcare is to be geared to be more fiscally responsible while providing the best outcomes. In this scenario, the only way to be profitable is to employ a strategic growth vision with economies of scale leading to big hospital groups acquiring physician practices. Then physician practices must now become less nimble and part of the bureaucratic setup where customized care is no longer feasible and a cookie-cutter approach is encouraged.

At present, though there are considerable advantages of the physician ownership model, the distinct threats include challenges of expensive expansion of information technology requirements, increased regulations and continued increases in practice expenses.

Considering this, physician owners must consider partnering with an investor or finding a source to fund these increasing high costs. Investors include private equity, venture capital, health plans and large employers. Successful physician ownership practice partnerships need to support better clinical outcomes, more efficient operations and an improved practice environment with stable compensation.

In this very difficult atmosphere, however, physician ownership can thrive, and may involve partnership models in physician practices, ASCs or different interrelated service lines. The biggest threat that I see is that physician ownership practices become less innovative, thus making them easy targets for assimilation for larger groups. Innovation and direct responsiveness to the patient has to be key.

Naveen Reddy, MD. Gastroenterologist at Wellington, Fla.-based Palm Beach GI: The biggest threats to physician-ownership are larger practices, insurance companies and networks creating monopolies/oligopolies that prevent smaller groups from competing on a level playing field. The two primary ways I have seen this are big players limiting provider panels to essentially blacklist providers that are not part of their network and insurance companies offering smaller providers extremely low rates relative to Medicare. Limiting provider panels on the basis of network status might work for the big players and make sense from a purely capitalist point of view, but it seems like it should be worth a review to see if it is an anticompetitive practice that harms patients. Insurance companies trying to low-ball small groups might help their quarterly bottom line, but in the long run it probably drives up costs by pushing those smaller groups to join bigger groups that will command higher prices.

Andrew Rhea, MD. Neurosurgeon at Florence (S.C.) Neurosurgery and Spine: Having been involved in a physician-owned practice for over 30 years, I feel that the biggest challenge we face is finding younger well-trained surgeons to participate and help manage our practices. We must have a new generation that is willing to step up and help administrate, invest and participate, or these practices will gradually fade away, leaving us all to be hospital-owned and managed.

Certainly there are other challenges such as competition, reimbursement and regulation, but these can all be met as long as we have doctors who are willing to spend their time and energy to help solve these issues. The younger generation of surgeons seem to be less willing to take on these challenges. I still feel that the physician-owned and -managed practice is the best model going forward, but it will require commitment from the next generation in order to continue to thrive. Hopefully young doctors will begin to see the advantages that physician ownership has to offer and move toward these opportunities over hospital employment.

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