The dilemma of private practice physicians

Physicians are flocking to employed models — almost 70 percent of physicians reported being employed at the end of 2020, with 1 in 5 being employed by corporate entities, according to a report from Avalere. 

But some physicians believe the employment model lacks a critical element to patient care: Autonomy. 

"Small private practices give physicians the ability to provide the best care for their patients and to adapt to changes quickly and effectively," Joseph Anderson, MD, professor of Medicine at Dartmouth Geisel School of Medicine in Hanover, N.H., told Becker's. "Small private practices are the lifeblood of U.S. medicine, and their ability to survive is vital to healthcare in this country."

New physicians are being pushed into hospital employment through a lack of education on both the business of medicine and the benefits to private practice, many physicians say.

"We're not training residents to be independent," Edward Zoltan, MD, a urologist at New York Health Urology Division in New York City, Becker's. "We're not giving the same kind of autonomy to residents like we did 20 years ago."

Residents who graduate now, Dr. Zoltan said, don't feel well-trained enough for private practice. Because teachers are often hospital physicians, residents aren't exposed to the possibility of private practice. These students typically don't interact with independent physicians unless they personally know someone or reach out on their own. 

Physician leaders also cite a connotation of private practice in the academic sphere as unethical or less-valuable than hospital employment, something that some feel could be solved by incorporating rotations and connecting physicians in training with private practice doctors. 

"Clinician instructors cocooned inside academia have no experience teaching private practice.  When I was training, there was an implication that those who went into private practice 'sold out,'" Eric Mehlberg, MD, an anesthesiologist at Comprehensive Pain Specialists in Golden, Colo. told Becker's. "Quite to the contrary, I can do what my current understanding of 'best' is for each of my patients."

Additionally, this swing toward physician employment does not align with the tendency of physicians to be independent thinkers, Alok Sharan, MD, a spine surgeon at NJ Spine and Wellness in East Brunswick, N.J., told Becker's

"Many physicians become disgruntled along the way and get stifled by the bureaucracy of these organizations," he said. "This leads to many physicians leaving an employed position and joining a private practice, either their own practice or a group."

The benefits of private practice seem more needed than ever. Private practice gives physicians some control of their practice hours — an asset considering 55 percent of physicians say they would take a salary reduction to have a better work-life balance, according to Medscape's physician lifestyle report.

But private practice doesn't mean less pay, in many cases it's the opposite. 

Physicians operating their own practices earned higher compensation on average than hospital employees, according to Medscape's physician compensation report. Self-employed physicians reported $352,000 on average, compared with $300,000 for hospital-employed physicians.

"Ancillary service revenue can reflect up to 50 percent to 60 percent of a private practicing physician's income, which, unfortunately, short of gain-sharing opportunities or partial ASC ownership, is usually unavailable in large healthcare system-employed practice situations," Jack Bert, MD, orthopedic surgeon at Woodbury (Minn.) Bone & Joint, told Becker's.

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