New Report: How Health Reform Will Reshape the Way Physicians Practice

By Mark Smith, president of Merritt Hawkins, an AMN Healthcare company

January 19, 2011 - Health reform will usher in a new era of medicine in which physicians will largely cease to operate as full-time, independent, private practitioners accepting third party payments. Instead, they will work as employees, as part-timers, as administrators, in cash-only “concierge” practices, or they will walk away from medicine altogether.

These are some of the findings of a new report commissioned by The Physicians Foundation, a non-profit, grant-making organization comprised of medical society and physician leaders, and completed by Merritt Hawkins, the largest physician search and consulting firm in the United States and a company of AMN Healthcare. The 110-page report represents the third major project The Physicians Foundation has engaged Merritt Hawkins to complete. Previous engagements included a national survey of 12,000 physicians and the book In Their Own Words, which examines the growing ambivalence physicians feel about the medical profession.

Entitled “Health Reform and the Decline of Physician Private Practice,” the new report examines the potential effects of the Patient Protection and Affordable Care Act (i.e., health reform) on medical practice in the United States. According to Lou Goodman, Ph.D., president of The Physicians Foundation and chief executive officer of the Texas Medical Association, the report offers a road map for where medical practice is headed in the post-reform era.

“The private practice physician is rapidly disappearing,” Goodman noted. “Both market forces and the healthcare reform law are forcing physicians to find new ways of running a practice.”

The report outlines provisions in the new healthcare law that will reshape physician practice patterns and examines economic, demographic and other forces that are already impacting the way doctors structure their practices and deliver care. Drawing on the perspective of a panel of healthcare experts and executives, the report projects that physicians will follow one of four courses over the next few years: (1) they will work as employees of increasingly larger medical groups or hospital systems; (2) establish cash-only practices that eliminate third party payers; (3) reduce their clinical roles by working part-time; or (4) opt out of medicine altogether by accepting non-clinical positions or by retiring.

In order to illustrate medical practice trends, the report includes case studies of medical practice models likely to proliferate post-reform, including studies of a medical home, an accountable care organization (ACO), a concierge practice, a community health center, and a small, hospital-aligned practice.

One of the members of the report’s advisory panel is Richard Johnston, M.D., a private practice physician in Dallas who has seen his medical group change dramatically over the last two years.

“I can attest from my own experience that physician practice styles are evolving,” Johnston said. “Regulatory and market changes have compelled us to consolidate so that we can afford the expertise and systems necessary to remain viable in today’s practice environment.”

Johnston noted that his practice has grown from less than 10 physicians to over 150 physicians in an effort to adjust to changing market conditions.

The October 2010 report also includes results of a national physician survey to which some 2,400 physicians responded. Only 26 percent of those surveyed said they would continue practicing the way they are in the next one to three years. The remaining 74 percent said they would retire, work part-time, close their practices to new patients, become employed and/or seek non-clinical jobs. Based on the survey and other data, the white paper projects health reform will worsen the ongoing physician shortage and make it harder for many patients to access a physician.

The report has been the subject of nationwide comment and debate, and has been cited by numerous media outlets, including Fox News, National Public Radio, American Medical News and many others. Those interested in receiving a copy of the report may contact Merritt Hawkins at 800-876-0500 .