Doctors shifting from private practice to large hospitals for more security under health-care reform

Associated Press photo by Michael Schennum.

The days of hanging up a shingle and opening shop are becoming more and more unusual for doctors. Afraid of being left without protection in the face of changes caused by federal health-care reforms, doctors are leaving their private practices and moving under the shelter of large hospitals.

The shift is "driven largely by growing regulatory and administrative burdens, rising malpractice costs and declining reimbursements from insurers," reports J.D. Harrison for The Washington Post. In general, large hospitals have more financial security and are more equipped to keep track of new regulations.

In 2000, 57 percent of physicians owned their own firms compared to 43 percent in 2009, research by Accenture shows. The number is expected to fall to 33 percent by 2013. "The classic model of independent, small physician practice still exists today, but it's rapidly becoming a relic of a bygone era," Mark Smith, president of physician-recruiting firm Merritt Hawkins, told the House Small Business Committee last week. "This model is only likely to persist in any numbers in smaller, rural areas where there are few physicians; and even here, physicians will likely need to partner or affiliate with larger entities in some way."

Part of the change stems from the fact that accountable-care organizations are now an official part of Medicare. This health-care model, in which groups of providers "take responsibility for the care for an entire patient group," encourages hospitals to take on physician partners, Harrison notes. "Because of bundled payments and other measures in the law, hospitals want to make sure they have enough primary-care physicians, particularly, as well as specialists that they can have in their accountable care organizations so they can participate," Dr. Jerry Kennett, senior partner at Missouri Cardiovascular Specialists in Columbia, Mo., told lawmakers.

New regulations and non-compliance penalties that are built into the law are also making doctors run for cover. "There is so much more regulation, and the penalties are so great, physicians are very fearful that they'll make an honest mistake and be held financially accountable," Smith said. (Read more)
Hat tip to The Lane Report