Doctor Is Always ‘In’ With the Rise of Group Practice
Worried about how to choose a doctor? Things aren’t going to get any easier. Group practice is gradually taking over the medical profession. Soon, instead of choosing an individual doctor, you may have to choose an entire group.
“Group practice” in this context means anywhere from two to 50 or more physicians working out of the same office, under an arrangement that gives them some degree of common overhead and finances. Group practices have a clinic-like ambiance that resembles a health-maintenance organization (HMO), and may be part of one, but not necessarily. In many groups, doctors treat individuals on a conventional private-physician, fee-for-service basis.
Statistically the movement toward group practice is unmistakable. From 1980 to 1985 the number of physicians practicing jointly rose by 43%; the number of doctors practicing solo rose at a much slower rate. There are today more than 16,000 physician groups nationwide, as opposed to about 6,000 in the late 1960s. Overall about 38% of the nation’s physicians now practice in group arrangements, and while that still leaves the soloist (at 58%) as the leading doctor type, it’s the group category that is growing, while the solo category contracts.
What’s driving the change? Many doctors say they are compelled to circle their wagons into groups to resist hostile economic and social forces that surround them. Only in numbers, some say, can physicians cope with increased litigation, rising costs and the growth of “managed care” plans such as HMOs and a similar creature called the preferred-provider organization, or PPO.
So far the leading incentive luring doctors into groups appears to be money. The trade journal Medical Economics has found that in 1985, average net income for a doctor in a medium-sized group practice was $142,730. Solo practitioners netted on average $93,350.
But income is not the only incentive, and is in some respects deceptive. Many parts of the United States--especially big cities--are experiencing doctors gluts. Young doctors starting careers in such localities may find that the pure private practice opportunities in most desirable ZIP codes are taken, and that given professional overcrowding, banks are reluctant to lend the $100,000 to $150,000 stake that starting up a new solo practice requires. On the other hand group practices are expanding; they may represent the young physician’s best avenue for employment.
Some groups hire doctors as salaried staff, relieving them of the need to raise start-up capital and hustle patients. Others take on physicians as business partners. This requires an investment of cash or future income, but the sums involved are usually much lower than those needed to start up a new practice. Thus it should be expected that group-practice physicians will be younger than private-practice colleagues, and that is what the statistics show: The median age of the solo practitioner is 51, while the median doctor in a large group setup is 45.
Several more subtle, cultural factors are involved. The doctor who works solo gives up the privilege of calling his time his own: Whenever the phone rings, he must respond (at least if he’s conscientious). There’s no one to cover when a waiting-room line develops or an emergency starts just as the maitre d’ is seating doctor and spouse for an anniversary dinner. Nor is it practical for the solo doctor to take vacations, or simply take the day off if he’s feeling poorly himself. Patients never take the day off. In the solo practitioner scheme, every doctor is an economic adversary, eager to steal the patient who calls when a colleague is busy. All these considerations can lead to overwork, frazzled nerves and eventual burnout.
One of the worst failings of private medicine as practiced in the United States is that it pushes doctors to mental meltdown. Through overwork, many sacrifice their personal lives, become inured to their patients’ emotional needs and end up not even able to enjoy the money they’ve made. Solo practice is particularly hard on female physicians, because it becomes extremely difficult to get blocks of time off for childbearing.
In a group practice, by contrast, doctors can cover for each other without complicated arrangements or fear that their patients will be stolen. Partners can take emergency calls on a rotating basis, assuring most of the group a peaceful night’s sleep. Pregnancy leave can be arranged without worry that livelihoods will vanish. The promise of such a reasonably sane life is appealing to many younger doctors, who observe that the last 20 years of medical developments brought their forerunners great wealth and status, but not necessarily peace of mind.
Patients may suffer from the soloist arrangement, too. Solo practice obviously can offer the personal touch, but it also may leave patients stranded for hours in a waiting room only to be confronted by a bleary-eyed doctor who must rush through the examination to get to the next impatient patient. A certain percentage of doctors behave as though they were the only ones in the world whose time is valuable. But waiting room gridlock does not necessarily mean a particular solo physician is a martinet: Emergencies must take precedence over routine problems, and there is no other doctor on hand to pitch in. When several doctors work together there’s a better chance one will not be busy, and can pick up the slack.
Recently I visited a suburban Philadelphia community hospital where the bulk of the self-employed solo doctors were hopping mad because the hospital had started a group practice in child care. What made the soloists fume was, first, that pediatricians in the new group were being paid flat salaries--generous ones, but salaries nonetheless, and solo practitioners from the old school equate physician salaries with Bolshevism and free love. Second, the soloists were mad because the new group was drawing away some of their customers. Patients liked the ease of making appointments and the availability of a healing environment not totally money-centered.
Currently there is a special incentive for doctors to form groups: malpractice. As with any self-employed individual, the solo practitioner pays increased costs out of his pocket. A typical soloist might gross around $200,000 a year, with about half covering overhead and the rest net income. If annual malpractice premiums jump from a few thousand dollars to $25,000 or more, as they have in several areas of the country, the soloist’s take-home pay will decline drastically unless he swallows hard and practices without insurance--called “going bare,” which about 10% of solo practitioners are believed to do--or increases his fees, which may drive away customers. Group practice softens the malpractice blow. Because even a small group offers an insurance company a pool over which to spread risk, malpractice policies for physician groups almost always work out to less per doctor than individual policies.
Many physicians claim not to like the idea of group practice, predicting it will crowd out the homely personal care that solo practitioners dispense (in theory at least) and replace it with a dehumanized, “vendor” medicine.
But doctors through the postwar era have predicted doom regarding dozens of economic and social developments, even as the quality of care available to the typical American has steadily improved, the incidence of most forms of disease and debilitation has declined and doctors themselves have enjoyed uninterrupted increases in standards of living.
Therefore, physicians grumbling about group practice must be viewed with a degree of skepticism. If physicians were in short supply, the threat of group arrangements being impersonal might, for example, be cause for serious concern. But in most areas of the country, doctors are in surplus, and patients are becoming much more consumer conscious. Any group practice that treats patients in a high-handed manner will have trouble holding customers, while clinics with a personal touch should flourish.
One reason some doctors grumble is that group practice represents another step in a much-feared direction--toward the loss of independence. Though intense legal scrutiny may be focused on a doctor after one of his patients suffers injury, traditionally there have been amazingly few before-the-fact restrictions on how physicians practice. What drugs to use; what treatments to recommend, and many other basic choices are pretty much left up to the solo doctor, and this feeling of being one’s own boss has helped compensate for excessive demands on personal life.
In “managed” groups such as HMOs and PPOs, some of this freedom disappears. In a private clinic individual physicians remain free to practice as they please, but the satisfaction of being the boss can no longer be experienced. Even if the doctors in a group regard each other as equals, there will still be meetings to attend and compromises to be reached.
Old-school solo practitioners will sit you down and expound in great detail about how group practice is a bad idea even if the business aspects sound rational and the life-style benefits appear alluring. You can’t help thinking that what’s really at work is melancholy over the end of an era, an era when the typical physician knew absolute autonomy. The group practice, created by doctors themselves, is helping usher that era out.
