Doctors are Selling Out and Why You Should Be Worried

Episode 136

The Paradocs Podcast

Doctors are Selling Out and Why You Should Be Worried

Doctors are Selling Out and Why You Should Be Worried

Essentially, there are two main ways to classify physicians - independent or employed. Today's health care in the US is becoming increasingly consolidated as  health systems and corporate entities (venture capital groups, etc.) are purchasing physician practices. With the advent of the pandemic of COVID-19 and the partial and complete shutdowns in medicine over 2020, the trend of selling practices accelerated. More and more physicians are now employed by someone - either a hospital system or corporation - eclipsing 70% of all physicians.

The era of independent physicians may be coming to a close if these trends don't turn around. The question we should be asking is why is this happening and should we care?

What are the Trends?

The Physician Advocacy Institute surveyed physicians over 2019-2020 and found that there was an acceleration of physicians selling their practices to hospitals and corporate entities. This was not unique to any specific region of the country. You can see their paper here and it is clear that this is a trend that is not going away any time soon. Over the last two years, 48,400 doctors left independent practice and moved to employed status. Nearly half of all physician practices are now hospital or corporate based leaving an ever smaller base of people who can be nimble and innovative in the health care space.

It is important to point out that many I have spoken to over the past two years have left big systems and struck out on their own to be disruptors in the space like Dr. Randy Lovell, Dr. Richard Rosenfield, Dr. Diana Bitner, and others.

Reasons Docs Become Employed

  1. Cash out for retirement
  2. Avoid overhead/business frustrations like meeting payroll, etc.
  3. Market swings
  4. Paying off student debt (usually ~$250,000 from med school and undergrad)
  5. Perceived stable/reliable income
  6. Increasing regulations and reporting for things like value based care. MediCare reporting and data mining.
  7. Electronic medical records
  8. Audit processes

Why Docs Leaving Independent Practice is a Problem for Us All

  1. Increased health care costs
  2. Less competition
  3. Less innovation in how to deliver care
  4. Prescription drug plan restrictions (and increased costs)
  5. Worse autonomy
  6. Increased utilization of midlevel providers
  7. Stagnant pay because no risk taking
Doctors are increasingly becoming casualties of bigness in medicine. Both through health systems and corporate entities like venture capital groups.

 

 

 

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show notes

Episode 136: Today's show

Survey on Physician Practice Trends in the US 2019-2020: This is the article we discussed regarding what's going on with physician practices.

Physician Advocacy Institute: This is organization who conducted the survey and is committed to keeping a vibrant marketplace for physicians by helping advocate for them and providing resources to aid in their practices.

@PhysAdvocacy: Twitter for the Physicians Advocacy Institute.

Episode 088: Dr.Lovell in leaving corporate medicine to practice orthopedic hand surgery in a new way.

Episode 115: Dr. Bitner on leaving corporate medicine to practice OB/GYN in an innovative model.

Episode 117: Dr. Rosenfield on leaving corporate medicine to practice surgery in a more innovative way.

Doctor Me First: Today's sponsor and a sister show on the Doctor Podcast Network hosted by Dr. Errin Weisman.

Doctor Podcast Network: The home for the Paradocs and a number of other physician based podcasts.

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