The Future of Private Practice - Perhaps Not So Private Anymore

More evidence released recently shows that the era of independent practice may be gradually falling to the wayside.

One study, commissioned by national physician search firm Merritt Hawkins, found that the majority of physician jobs available are now based in hospitals.

Another study, commissioned by consulting firm Accenture Health, found that more and more physicians are choosing to leave their practices to join larger healthcare systems.

Hospital-Based Physician Jobs Increasing

Merritt Hawkins conducted more than 2,600 searches to recruit physicians for clients nationwide during a one-year period beginning last April. Fifty-six percent of those search assignments featured hospital-based jobs. That’s a significant increase from only 23 percent just five years ago.

Even more telling, only two percent of the firm’s recruiting assignments featured openings for independent practitioners. That’s quite a decrease from 17 percent just five years ago.

"The era of the independent physician who owns and runs his or her practice is fading," Travis Singleton, senior vice president of Merritt Hawkins, said in a statement. "Doctors today are more likely to be employees working for increasingly large health systems or medical groups."

This increase in hospital recruiting can be explained by a variety of factors. Most likely though, the current and proposed healthcare reform initiatives, many of which emphasize increased interaction between hospitals and physicians, are playing a huge role.

The proposed ACO program is a prime example of one of these initiatives. According to the CMS issued proposed rules for ACOs, an ACO must include at least one primary-care provider. Further complicating the issue, that primary-care provider must exclusively belong to that ACO.

Essentially, if a hospital is interested in ACO participation, it must also have a relationship with an interested primary-care provider. Hospitals may already be recruiting physicians now, to ensure ACO participation in the future.

Private-Practice Physicians Decreasing

The shift away from private practice and into hospital-based medicine, however, is not solely due to hospital recruitment. According to Accenture Health, it may also be attributed to a shift in the mindset of independent practitioners.

Historically, independent practitioners tended to avoid capitalizing on opportunities to join hospitals or larger healthcare organizations. This may no longer be the case.

In fact, by 2013, less than 33 percent of physician employment will occur in private practice, according to Accenture. That’s a significant drop from 57 percent in 2000.

Physicians are increasingly drawn to different resources available within health systems, according to Accenture. More manageable work weeks and increased job stability are key sources of appeal.

Accenture also cites relief from administrative responsibilities, and greater access to healthcare IT tools, facilities, and equipment as appealing to independent practitioners.

What This Means for Private Practitioners

The gradual shift away from independent practice will heavily impact all primary-care providers, whether they remain in private practice, or they join another healthcare system.

Physicians choosing to remain in private practice will have a smaller community of like-minded professionals to draw support from. They will have less accessibility to certain healthcare reform initiatives. And they will continue to face all of the perks, and the detriments, that come with working within a small business.

Yet, these physicians will continue to remain independent. Most likely they will experience more scheduling freedom and more influence on the way the practice is run. They will also retain personal interaction between physician and patient.

Physicians who choose to join larger healthcare systems will need to adjust to lack of independence and autonomy. They will need to find new ways to connect with patients in a, in many cases, less personal setting. And they will need to adjust to a very different type of work environment.

The move away from independent practice could also bring great benefits to physicians. They will experience closer physician/hospital integration, more ease in participating in healthcare reform initiatives, and improved access to new technology at lower costs.

While there may be fewer opportunities to practice independently in the future, the opportunity is still there to do so today. A key question is how many physicians will still want to take advantage of that opportunity in the years to come.