The PJ Tatler

Doctors Abandoning Private Practice in Droves to Work at Hospitals

Doctors are leaving private practice to become employees of hospitals, according to this story in the New York Times. The decline in private practice physicians actually began a few years ago when changes to Medicare forced many physicians who practiced individually or in small group offices to make the move to a salaried position in a hospital.

But there is no doubt that Obamacare has exacerbated the problem. The onerous recordkeeping is one big reason why private practice physicians are becoming extinct. Private physicians can’t afford the extra employees to meet the demands of Obamacare paperwork.

Dr, Paul Hsieh explained in a PJ Media series we published on the rollout of Obamacare:

The second component of Big Medicine is the shift of doctors away from independent private practice and towards becoming hospital employees. Doctors face many of the same pressures as hospitals. As eWeek reported, “Doctors are abandoning their private practices to join large health organizations so they can lower their costs and meet government mandates on electronic health records.”

By becoming hospital employees, doctors lose autonomy, but enjoy more regular hours and a more predictable salary. In return, hospitals gain access to a guaranteed supply of patients from their employee-physicians. Last year the Washington Post reported, “[T]he number of physicians who own their firms dropped from 57 percent in 2000 to 43 percent in 2009, and it’s projected to continue falling to 33 percent by 2013.” As oncologist Patrick Cobb recently told CNN, “We have a joke that there are two kinds of private practices left in America. Those that sold to hospitals and those that are about to be sold.”

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In contrast, the shakeup in health care is towards greater — not lesser — consolidation. This is because the government — not patients — will be increasingly in charge of the money. Under ObamaCare, government is projected to account for a whopping 66% of overall health spending. More centralized control of health spending will inevitably mean more centralized control of health care.

Nor is this centralization of health care some “unintended consequence” of ObamaCare. Rather, it is an explicitly desired goal. In 2010, Obama health advisor Nancy-Ann DeParle wrote in the Annals of Internal Medicine that the health law will “accelerate physician employment by hospitals and aggregation into larger physician groups” and that “physicians will need to embrace rather than resist change.”

Whether physicians resist the change or not is beside the point. The precipitous decline of private practice physicians will allow hospitals to jack up their prices — exactly the opposite effect of what the government intended with Obamacare.

The New York Times reports:

Health economists are nearly unanimous that the United States should move away from fee-for-service payments to doctors, the traditional system where private physicians are paid for each procedure and test, because it drives up the nation’s $2.7 trillion health care bill by rewarding overuse. But experts caution that the change from private practice to salaried jobs may not yield better or cheaper care for patients.

“In many places, the trend will almost certainly lead to more expensive care in the short run,” said Robert Mechanic, an economist who studies health care at Brandeis University’s Heller School for Social Policy and Management.

When hospitals gather the right mix of salaried front-line doctors and specialists under one roof, it can yield cost-efficient and coordinated patient care. The Kaiser system in California and Intermountain Healthcare in Utah are considered models for how this can work.

But many of the new salaried arrangements have evolved from hospitals looking for new revenues, and could have the opposite effect. For example, when doctors’ practices are bought by a hospital, a colonoscopy or stress test performed in the office can suddenly cost far more because a hospital “facility fee” is tacked on. Likewise, Mr. Smith said, many doctors on salary are offered bonuses tied to how much billing they generate, which could encourage physicians to order more X-rays and tests.

I can’t believe that this switch is ultimately in the patient’s interest. A private practice physician is independent and the decisions he  makes for your care are based on what’s best for you, not what some green-eye-shade hospital bureaucrat thinks is “efficient” or “cost effective.” Those goals are very nice — as long as the patient’s health is not sacrificed in their name.

In the end, I want a doctor making decisions in consultation with me regarding my health. You can’t be sure if that will hold true when all doctors are working for Big Medicine.