Point/Counterpoint: Self-employed community practice is still a viable proposition
Multiple sources continue to confirm the trend that more physicians are moving to an employed practice.2-4 In the last decade, the rate of hospital employment has increased from 11% to 64%.1 There are many factors that have pushed physicians away from self-employment. Some of these are related to physicians’ personal choices, and many are from external pressures. As various parts of the Affordable Care Act come into play, there will continue to be increasing regulatory demands. These have the potential of increasing overhead costs, and, coupled with decreasing reimbursement, will inevitably make staying profitable more challenging in a self-employed model.
There are two other very telling trends that foretell the inevitable decline of self-employed physicians. Fewer and fewer new graduates are reporting that they are self employed. In the most recent surveys, twice as many physicians under the age of 40 are employed than self-employed.1 Furthermore, 92% of residents surveyed in their final year would prefer employment with a salary, and only 2% would consider solo practice.5 Of these graduating residents, 36% specifically were considering hospital employment, which is nearly a 10-fold increase from a decade ago. The second factor affecting new hires is their confidence that they have the necessary skills to manage a self-employed model. During the same decade, there was only a small increase in graduating residents who felt very prepared to deal with the business side of medicine (10% vs. 2%).5 This lack of knowledge will undoubtedly make it difficult for those who would consider self-employment to feel comfortable in that practice model. Some have speculated that there is soon to be a “push back” from the physicians and specifically from specialists who don’t have as much to gain in large group practices. With so few graduates considering solo and small group practice, and the overwhelming majority not feeling very prepared to manage the business of medicine, who can help lead this trend reversal?
Not only are fewer new graduates choosing self-employment, but fewer opportunities for self-employment are available as more physician groups are being bought by hospitals or other large group practices. Specifically with vascular surgery, there is a significant overhead cost requirement. Advantages to joining a large group practice include better ability to negotiate cost savings with the frequent capital requirements for new equipment, updates and maintenance of the electronic records, and professional liability. In fact, one study in California shows that as the proportion of physicians employed by the health system increased, supply chain expenses and inventory costs improved.6 Furthermore, hospitals have administrators who are hired to negotiate with insurers regarding reimbursement and respond to audits and other regulatory changes. As mentioned above, the top two reasons for avoiding self-employment are precisely these. This will no doubt draw even more physicians and specifically vascular surgeons into employed models.
Dr. Haurani is assistant professor of surgery in the division of vascular diseases and surgery, Ohio State University Medical Center, Columbus.
References
1. www.medscape.com/features/slideshow/public/employed-doctors#1
3.Perspect Vasc Surg Endovasc Ther. 2013;25:46-52.
4 Tenn Med. 2012;105:38-39.
5.www.merritthawkins.com/uploadedFiles/MerrittHawkings/Surveys/2014_MerrittHawkins_FYMR_Survey.pdf.
6. Health Care Manage Rev. 2015 Jul 23. [Epub ahead of print] www.ncbi.nlm.nih.gov/pubmed/26207654
