Are Independent Primary Care Docs a Thing of the Past?

The COVID pandemic illustrated a whole bunch of flaws, holes, and gaps within the U.S. health care system. To be fair, the pandemic illustrated flaws, holes, and gaps within U.S. society, government, the economy, etc. A trend that has been slowly moving forward seems to be accelerating through and post the pandemic and that trend is primary care physicians no longer remaining in independent group or solo practice.

In 2018, the percentage of practicing physicians who owned their practices dropped below the level of employed practicing physicians (45.9% to 47.4%) (“Employed physicians now exceed those who own their practices,” American Medical Association, May 10, 2019). At the start of 2019, before the pandemic, 62% of physicians were hospital or corporate employed. In 2021, that number grew to 73.9%.

Aside from the pandemic making private or small group practice difficult to sustain, regulatory changes to medical practice via the HITECH Act and the Affordable Care Act created additional bureaucracy, electronic documentation and record requirements, paperwork, systems investments, etc., such that most solo practitioners and small groups could no longer financially sustain their practice model.

The HITECH Act of 2009 (which included incentives and penalties for physicians to adopt electronic records) and the value-based-payment models created via the Affordable Care Act dramatically increased documentation requirements. Today, doctors’ payments are now based on regulatory quality measures for patient care, as opposed to the quantity of patients seen, requiring significantly more documentation. Hospitals have people trained to comply with these requirements as well as computerized documentation systems, many doctors frustrated by the excess paperwork chose hospital employment. 

Financial issues are also at stake. For some typical in-office procedures, hospitals are able to pay more than a physician can earn from performing the same procedures in their clinic or office. This is because Medicare allows the hospital to charge an extra “Part B technical fee” (these common) services are performed in an outpatient (hospital) setting. The physician thus, receives more income from performing procedures in an outpatient setting than he/she would for performing the same procedure in the clinic/office. Similarly, larger systems and hospital entities can use leverage to negotiate higher reimbursement from insurance plans. This is especially true in rural areas where larger systems negotiate provider panels with higher payments, leasing staff to rural clinics or hospitals.

What is concerning with this trend is the impact primary care physician loss has on communities that already struggle for care access.  A parallel problem is found with certain populations such as the poor, inner-city, and senior adults.  Primary care is the initial start to overall population health.  It is the vital link that folks need to prevention and to early intervention, reducing higher cost care.  It is also the link that allows folks to gain access to care that may be urgent but not necessarily emergent.  Primary care physicians historically could (and did) do numerous in-office treatments and interventions that eliminated the need for the patient to seek care at a hospital or urgent care setting (more expensive, less accessible care).  In inner cities and in rural areas, access to a physician could negate a trip for many patients, miles away to access care.

Today, fewer than 1 in 3 primary care physicians work in solo or independent practice groups (non-hospital or system owned). This is disturbing, particularly in rural and urban areas where access is already thin.  The primary culprit for this trend is clearly, government regulation.  As reimbursement has not increased substantially across the past decade (physician fee schedule increases under Medicare parallel inflation), added overhead via additional regulation and documentation burden has forced primary care physicians to seek relationships with hospitals and health systems such that their practice is no longer independent. A good analysis of the impact of regulatory burden on physician practices is available here: 10.11.2022-MGMA-Regulatory-Burden-Report-FINAL

Increasing regulatory burden is having a two-pronged impact on primacy care medicine and the physicians that practice it.  First, it is reducing patient care by reducing the number of patients a physician can see in a day as too much time is consumed with paperwork.  The side effects thus are less care and more expensive care as productivity (billable) is reduced.  Second, it is reducing the number of private or small group practices thereby, reducing access points.  If for example, three small groups in an area decide to join a hospital system and a large practice group, three access points likely dwindle to one or none in some cases.  This is the most troubling phenomenon that over-regulating is causing.

An interesting JAMA article on regulatory burden and productivity (time spent in direct patient care) is here:

There may be signs of some recognition of this problem and that relief is sorely needed. Recently, Republicans and Democrats on the House Small Business Subcommittee on Oversight, Investigations and Regulations, chaired by Rep. Beth Van Duyne, R-Texas, held a hearing on regulatory burdens on small medical practices. The members generally agreed that the status quo imposes an unacceptable regulatory burden on small medical practices. I’ll keep tabs on any further progress from this hearing in terms of policy proposals.


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