Private-practice physicians shift to groups as health care administrative burdens rise

Finding doctors still in private practice is getting harder.

From the way they get paid, to reporting procedures and outcomes, especially for Medicare, more physicians are opting out of running a private family practice to join larger organizations that take care of administrative burdens.

'Why is everybody flocking to bigger organizations? Income guarantees, job security, fixed work hours, and less regulation work. Nobody wants to be an independent physician anymore. Everybody wants to join some place where the hours are good, the pay is good and it's like a job instead of a profession. That's a big difference, and I see that happening,' said Keith Chamberlin, president and board chair of Meritage Medical Network Accountable Care Organization, which has about 250 physician members across Marin, Napa, and Sonoma counties.

Ana Pacheco-Clark practices family medicine at Sutter Santa Rosa Regional Hospital. After 17 years of private practice she joined with Sutter Health in 2007, along with three other partners. A fourth partner went to Kaiser Permanente.

'It was getting more and more difficult to deal with all the (technical and administrative) changes. Financially, it was more and more difficult to stay on top of those things, and be able to offer benefits and salaries to staff,' she said.

More recently adding to the headaches, doctors say, is the Medicare Access & Chip Reauthorization act (MACRA). Passed in 2015, it changed the way the U.S. evaluates and pays for health care. The law does many things including establishing new ways to pay physicians for Medicare patients.

Two-thirds of health care providers (64 percent) report that they feel 'unprepared' for managing and executing MACRA initiatives, according to a survey from Pittsburgh-based Stoltenberg Consulting Inc., a healthcare information technology consulting firm.

Marcy Norenius is director of strategy, network, and growth at Meritage. She fields questions every day from doctors about the reporting requirements.

'I have this same conversation over and over and over because it's confusing. It's overwhelming,' she said

From 2013 to 2015, the number of physicians in groups of less than 10 dropped from 40 percent to 35 percent in the U.S., while the proportion of physicians practicing in groups of more than 100 grew from 30 percent to 35 percent, according to the Healthcare Financial Management Association, a membership organization for health care finance leaders.

The migration to larger practices was greater among primary care physicians than specialists.

From 2012-2015, 32,000 physician practices were acquired by hospital/health systems, an increase of 86 percent, according to a study by Physicians Advocacy Institute, a nonprofit health care advocacy organization, and Avalere Health, a healthcare consulting firm.

Medicare reimbursement changes

MACRA is shifting from a fee-for-service payment system that pays doctors according to the number of services provided, to a 'value-based system that rewards improved healthcare outcomes,' according to the Centers for Medicare and Medicaid Services (CMS).

Those changes, which bring more reporting for doctors, went into effect Jan. 1, and the program will evolve over the next few years.

'The size of your payment adjustment will depend both on how much data you submit and your quality results. Medicare payments will be adjusted up, down, or not at all,' the CMS states.

The Quality Payment Program, as it is called, is the latest in a series of steps the CMS said it has taken to incentivize quality of care over quantity.

That's a problem, said Meritage executive Chamberlin.

'How do you define value and quality? Is it always seeing the doctor or is it OK to see the nurse practitioner? Are you getting every test in the book or is it ok to get a couple? This is where a lot of argument comes in,' he said.

And, how do you report quality metrics to the government?

'It's the worst thing (for a doctor) to have to report a gazillion things. This is one of the things that's going to drive people out of private practice. That alone, in time and expense (of all the reporting) can kill a practice,' Chamberlin said.

Curtis Robinson has had a primary care practice in Mill Valley since 2005. The trend of doctors joining larger groups can be traced back to 1945 and the formation of Kaiser Permanente, he said, but the acceleration now can be attributed at least in part because of external pressure and expectations from the government. 'Many levels of reporting (to the government) and (new) technology are interfering with everyday life,' Robinson said.

One set of Medicare reporting, the Merit-Based Incentive Payment System (MIPS), will take him three full business days to complete, he said.

'And that's just on one issue.'

Doctors work long hours and have a lot of responsibility, and piling more work on them takes them away from their primary duty — their patients, he said.

'Administrations and the government add work without the best intention of the physician,' he said. 'They need to put the physician first.'

Cynthia Sweeney covers health care, hospitality, residential real estate, education, employment and business insurance. Reach her at or call 707-521-4259.

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