The Insight of MDs: The Present and Future of Private Practice

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In doing the discovery work for our Resident Options series here on The Right Fit blog, we have often heard medical professionals lament the current state of Private Practice (among other things).  After I read the post Physician Compensation: Is Private Practice Financially Feasible? it prompted a  Twitter exchange with Suleman Bhana, MD  and Michael Laccheo MD, and Dr. Suleman stated this about Private Practice:
It is nuanced but trend is clear. Physician independence is eroding rapidly in the US.
In that same discussion, the following quote by Dr Laccheo  made me sit up and think, hard:
"I will remain in it until they make it illegal."
With US Healthcare in such a state of confusion right now, we don't think anyone can predict the future of Private Practice over the next 5 - 10 years; we decided to reach out to medical professionals and hear what they think will happen, so we started with doctors Bhana and Laccheo.

 A Bit of Background on Our Interviewees

SulemanBhanaDr. Bhana and Dr. Laccheo come at this topic from very different perspectives as far as their working life within the Medical profession.  After graduating from St. George's University in 2006, Dr. Bhana spent 3 years in internal medicine residency, and 2 years in sub specialty fellowship.  He is currently employed as a Physician for a hospital owned group in Northern New Jersey. michaelLeccheo Arthritis & Rheumatic Diseases of  Williamsburg, Virginia is the private practice where Dr. Michael Laccheo is employed.  After graduating, he worked for 2 years for a large, national healthcare organization.  6 months ago he decided to change jobs; his clinic is owned by two other Rheumatologists.

Doctors Bhana and Laccheo are the founders, with Dr. Paul Suftka, of The Rheumatology Podcast, a bimonthly conversation between of three board-certified, clinical rheumatologists in private practice.  In the interest of full disclosure, we met them because they did a review of our Lab Coats (unpaid and honest).

Defining Private Practice

The shape shifting nature of healthcare over the recent past and foreseeable future makes it necessary to define what we are discussing when we talk about private practice. The Oxford English Dictionary sees the definition of Private Practice quite simply as:
the work of a professional practitioner, such as a doctor or lawyer, who is self-employed.
In the medical profession it is not always so cut and dry, and  the growth of large corporate entities buying smaller practices confuses the issue.  For our purposes, we will go with Dr. Laccheo's description:
I personally only consider private practice to be small, physician owned and run clinics that are not associated with any larger organizations.
There are many bloggers and journalists who make their living pontificating on the state of US Healthcare, but for us, there is no more credible source than to ask Physicians who are actively working in the profession.  Following are our questions and their answers.

Exploring Private Practice

Q: What is the greatest benefit of working in Private Practice:

A, Michael Laccheo:

I think that private practice makes the physicians most accountable to the patients; it is our name on the door. We make all the decisions about the practice. We live and die by those decisions. If we take good care of our patients, then we will flourish. If we are unresponsive to problems, poor in character, and inept in medical skill, we will be out of business…and working for a large healthcare organization. (Think about that.) What I love about private practice is that I can create it to be how I would want things to be if I was a patient. When a patient says to me “I wait for hours getting an infusion. It would be nice to have WIFI,” rather than writing up a proposal, doing a cost analysis, taking it to a committee, I can just come in early the next morning and install it, because I’m not happy when I go someplace that doesn't have WIFI either! I always approach the setup of my practice and the way I practice by thinking about what I would want if I was the patient. In private practice, I can make it a reality. Before, I couldn't. If I couldn't work in private practice I would want to work at the VA. While that might seem antithetical to why I like private practice, the VA really takes care of its own, they strive for high quality of care, and their prior authorizations really do seem to be based on science, not on finances. Basically, it would be the next best way to take care of my patients and that is why I am here after all. They also have the best EMR.

Q: You have never worked in Private Practice. What played a role in keeping you from doing so?

A: Suleman Bhana:

For me, it was a combination of reasons:
  1. After graduating from fellowship, the Rheumatology private practices in my geographic area of choice that were advertising were not desirable from a practice model or compensation perspectiveCallia
  2. Possibility of solo practice was never fully considered due to the significant costs of business and financial risk of private practice in the NY/NJ area
  3. High student loan debt from med school means I need a steady source of income right away, can't wait to build up a practice as a small business owner
  4. Current health care policy environment skews heavily against the private independent small business practice, and towards large health care organizations/ACOs. If you "skate where the puck is going", then working for a private practice in a large metro area does not seem viable for long.

 Q:  Currently, what the biggest challenges to being in Private Practice?

A, Michael Laccheo:

One of the hardest things about being in private practice is that you are responsible for everything from staffing of the nurses to staffing of the toilette paper rolls. You will get complaints about anything that isn’t perfect: quality of toilette paper, lack of WIFI, grumpy attitude from the front desk, nurse that smells like smoke, crowded parking, etc. This is not a job for someone who wants to show up at 9 and leave at 5. Granted, being a doctor is rarely ever like that, but even if you get done with your “doctoring” work at 9pm, now you have to start thinking about the administrative aspects. This is both the best thing about private practice, but also a lot of work. You are running a business, and as all business owners will tell you, you constantly worry about going out of business. All of your employees count on you for their livelihood. It is a terrible responsibility. The thing I worry most about these days is that some legislation will be passed that basically makes private practice impossible. This could come in the form of mandated care that is reimbursed at below the cost of providing the care. It could come in the form of egregious red-tape that can only be complied with by large organizations with numerous administrators and lawyers.

Q: What are the currently the biggest challenges not being in Private Practice?

A, Suleman Bhana:

It depends on the practice model, but loss of autonomy is the biggest challenge. Physicians by nature tend to be independent thinkers and somewhat OCD about how to do things. When working as an employed physician, you have to get used to a lot of non-physicians (hospital administrators, nurse managers, IT managers) telling you what to do and how to do it. This could include type of patients to see, volume of patients, practice locations, capital expenditures for the practice, ability to offer patients new services, and obvious IT/EHR decisions. As described by asymco.com's Horace Dedieu, a protege of Harvard Business School's Clay Christensen, large corporate organizations tend to require tremendous inertia to change course and tend to have "corporate antibodies". Corporate antibodies are the internal mechanisms that quell changes or innovations that are disruptive to the corporate organisms structure and function. A smaller organization (like a private practice) has more freedom to maneuver. Sometimes, the benefits of a steady paycheck for a physician may not outweigh the acceptance of the reality of a particular practice setting.

 Q: What worries you most about the consolidation of Healthcare in regards to the future of Private Practice?

A, Suleman Bhana:

The realty of our current healthcare policy debate and of the large healthcare organizations is the the voices of physicians are not being amplified or listened to. Some of this fault may be on physicians themselves, but I know plenty of physicians that are very vocal about the challenges we are facing now. Physicians are the ones who are responsible for establishing and maintaining the trust and relationship with patients, which is the core of all of healthcare. We are in the trenches trying to implement new technologies, spend hours per week trying to convince "medical directors" of insurance companies to authorize medications and tests on patients we know best, and have the power of the pen (or now keyboard) to decide who gets which test or therapy. As physician autonomy gets eroded and we move from small business owner to employee, our ability to impact the micro and macro system on whole becomes less effective. The exception may be physician run healthcare organizations in which the physician has more of an active role in directing care on the ground and within the system as a whole.

A, Michael Laccheo:

In general, consolidation by itself doesn’t concern me. I believe that we private practice physicians take much better care of our patients so as long as there is free competition, I don’t think we have anything to worry about. Tiffanys doesn’t worry because Walmart sells necklaces cheaper. What I am concerned about is when governments and insurance companies try to force policies and legislation that basically excludes private practice from the game. We can compete on quality and service. We can’t complete with lawyers and money.

Q: If you could make 3 significant changes, what would they be?

A, Suleman Bhana:

I'm not even sure where to start, but a few things come to mind
  1. Change the billing/payment system to at least reflect the cost of care. If inflation rises, costs increase, but reimbursements go down, then inevitably the private practice will become unsustainable
  2. Allow reimbursement of many of the non-reimbursed activities such as care coordination (some minor changes are already coming), patient phone calls, and time spent with insurances doing pre-approvals. If an insurance wastes 25 minutes of my time bouncing me from dept to dept then my time should be reimbursed by them.
  3. If a private insurance market is what this country chooses as its system (as opposed to single payer) at least have a true market system where there is an equal playing field for insurance products to compete. Many areas of the country are still insurance monopolies. A large hospital based group can negotiate better rates, however a small private practice has no power as there are no other insurances in town. Any situation with a monopoly is ripe for abuse. This cost gets shifted to patients inevitably by forcing practice to become high volume based simply to make up overhead.

A, Michael Laccheo:

IMG_6069I would get rid of the “insurance” model for payments. I believe that part of the reason that costs are so ridiculously high is the third party payment system, similar to how the explosion of the college loan market led to the dramatic increase in student loan debt or housing prices are inflated by the mortgage market. Basically, there’s no free market and costs get inflated. Sadly, so much of the health care ‘industry’ is supported by these inflated costs, it may be “too big to fail” but I’d be willing to see that happen. We basically have whole industries that exist because of these bureaucratic inefficiencies. For example: billing and coding. Second, I would create a universal data format for the medical record and get rid of Meaningful Use. Typical of government, they approached the whole EMR problem backwards. Doctors weren’t using EMRs because they were terrible not because we are luddites. They’re still terrible, but now we’re forced to buy them so were’s the competition in innovation? I bet Apple and Google would love it if we were all forced to "meaningfully use" an iPad and Nexus rather than having to innovate a great product that we stand in line to buy. When you make something good, you don’t have to force people to use it. We’re at the point in EMR technology that instead of a bunch of “meaningful use” mandates we need a standard data set for the medical record that start ups could then innovate around to create the Facebook, Instagram, Twitter equivalent for EMRs. Finally, I would do something about the lawyers. There’s some old adage about how to deal with them. I can’t quite remember it off the top of my head...

Q: What advice would you give a Med Student about to graduate and go into their Residency?

A, Suleman Bhana:

During residency, much focus is given towards the practice of diagnosis and management of patients. Which is very necessary. However, I find there are many important questions that the resident must find out on his/her own:
  1. How do you take these degrees and skill set you developed and turn it into a career that gives you a good work/life balance, and allows you to pay off your debts.
  2. What are the specialties and sub-specialties that will see the most opportunity in the coming decade, and which will have the most challenges? Can that knowledge give you an advantage?
  3. What are the skills sets you will need to excel in the current healthcare landscape, and how can you acquire those skills as a resident and put those skills to use?
  4. How does healthcare policy on a local or national stage affect your ability practice your chosen specialty?
These are all questions the graduates need to be investigating and asking before and during their residency.

A, Michael Leccheo:

See as many patients a day as you can. Work hours have greatly cut back on the number of patients you’ll see, and the number one thing that will make you a better doctor is the number of patients you see. You’ll see more diseases, you’ll see more variations of diseases, and you’ll see more variations of patients. Not everyone with the same disease needs the same treatment, in spite of what the books will tell you. “It is more important to know what sort of person has a disease than to know what sort of disease a person has.” - Hippocrates

Q: What advice would you give a student considering Med School?

A, Suleman Bhana:

Very tough and charged question. Considering how much uncertainty there is right now about the future of healthcare in the US, its hard to predict what their experience will be like. A few related problems are soon to be coming on like a tidal wave.
  1. Cost of medical education is astronomical, and continues to go up. Average debt after graduation (as of 2012) is about $178,000. Its likely higher by now. Can someone in college now thinking about medical school afford being saddled with decades of debt? What would that debt do to them as a career choice? Would they go into low paying primary care, or would they try make themselves more competitive and reach for a high paying specialty like Radiology? If the goal is to be healthcare provider, perhaps another route such as RN then LPN may be a more cost effective goal, or even becoming a PA.
  2. Very soon, if not already, we will be seeing unemployed US trained med students. New med schools are popping up all over the place "to relieve the doctor demand." Keep in mind that 100s of foreign medical schools train US and non-US citizens also with the intention of practicing in the US. In order for a med student to practice, he/she needs to be accepted into an accredited residency training program in the US, complete some term of it, and pass the 3 1/2 step licensing exam (not to mention $1000's of dollars of examination fees). States think opening new med schools will help relieve the demand of the doctor shortage. The real problem is the residency training slots are capped by Congress and funded by the federal government, namely CMS. Unless Congress will authorize more funding and more spots for graduate medical education, there will be no relief to the amount and slow rate of doctors trained. More importantly, with limited slots of residency, and higher supply of domestic med students, there will reach a point soon in which there will be more graduating med students then residency spots available. A med student will be $200,000 in debt, and not be able to get into a residency spot to eventually be able to work as a physician and pay off this debt over time. I am not hopeful that our dysfunctional partisan government can come to logical consensus to relieve the burden of doctor shortage and prevent devastating economic burden to well-intentioned young people sacrificing time and money to go into medicine.

A, Michael Laccheo:

Don’t. Do something else. Anything else. Whatever you think medicine is, whatever noble or selfish reasons you have for going into it, most likely by the time you graduate the entire landscape will be different, for worse. If you want to make a lot of money, definitely do something else. If you want to help people, be a research scientist and find a cure for something. You’ll do more good that a single MD ever will. I know that I was given the same advice, and I was too bull-headed to listen, so I assume you won’t either. Therefore, I’ll give you my second best advice: dual major in Computer Science and Business.
Thank you for bearing with us for this very long post. We are actually big believers in the oft quoted "edit, edit, and edit again," but we think the subject and our interviewees' views are too important to short change. We also think the conversation is one that needs to continue, and Physicians need to be the most vocal voice in that conversation. We'd love to hear your thoughts here in the comment section.