Saturday, September 25, 2010

The ACA is destroying independent medicine

A few months ago, I had dinner with a couple from Pennsylvania. Knowing the husband was a physician, I asked what type of medicine he practiced.

He replied, "I am a dinosaur. Something that hardly exists anymore: a family practice doctor in solo practice."

In addition to being a primary care physician in a small town, he is a small business owner, doing his best to survive in an era of increasing government demands both on his business and on his practice of medicine. Solo and small group practice is becoming less and less financially viable within the third-party payer system.

For years, this doctor saw many Medicaid patients, willingly accepting payment less than his cost of providing care because of his loyalty to these individuals and his interest in offering charity care. Recently, he regretfully had to inform these patients he would no longer be able to be their doctor. Not because of the inadequate "reimbursement," but because of the onerous and expensive regulations Medicaid required. He provided the following example:

In order to provide immunizations for children on Medicaid, he could not simply have a special shelf in his office refrigerator. Medicaid required he purchase an entirely separate refrigerator in which to store the shots. This was in addition to reams of paperwork accounting for the purchase and use of the immunizations for Medicaid recipients.

Squeezed between falling payments and rising costs, the solo and small group practice of medicine is indeed endangered. More and more physicians are flocking to large group practices, frequently as employees. Maybe this is a good thing. But maybe not. However, patient demand is not the driver of this change, but rather the increasingly expensive government mandates placed upon the practice of medicine.

Dr. Richard Reece, physician, author, and health care policy commentator, has a recent blog post on the effect of the ACA on physician employment. He summarizes the findings of a recent survey, "Physician Alignment in an Era of Change."

• 74% [of hospital CEOs] plan to employ a greater percentage of physicians over the next 12 to 36 months.
• More than 70% say they have received increases in requests [from] physician groups for employment.
He concludes the post stating:

I spoke to John McDaniel, founder and CEO of Peak Performance Physicians, a practice management firm in New Orleans, and he pointed out to me that what’s driving hospital physician employment is not only anticipation of lower reimbursements under reform but the mounting costs and complexities of doing business.
Complexity per se is not the problem doctors are currently facing. Medicine and business are replete with complex problems which must be faced and dealt with on a daily basis. The problem is that far too much of the complexities doctors must deal with are the constantly shifting mandates and regulations which substitute the plans and values of the politically powerful for the plans and values of patients working privately in conjunction with their doctors.

Will the system of employee-physicians that is emerging be superior to the independent private practice of medicine? It depends on your criteria for judging.

If the goal is to meet the individual medical needs of patients according to their personal priorities, offered on a voluntary basis by physicians whose primary focus is the welfare of the patients he treats, then the ACA pushes us in exactly the wrong direction.
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