By Shawn Martin
September 10, 2014 at 5:00 am ET
Health services researchers and health economists have been predicting the demise of solo and small physician practices for the past decade, espousing the value of larger more integrated networks that can use size and scale to improve quality and lower costs. As a result of this “group think,” the acquisition of physician practices has accelerated and a sense of inevitability has been promoted to encourage physicians to abandon their solo and small group practice settings. There is just one small problem, what if bigger isn’t better? What if smaller practices are better positioned to deliver on the goals of the triple aim? I recognize that this is health policy heresy, but hear me out.
Over the past few weeks there have been two important studies published and one interesting letter written. The first study, “The Continued Importance of Small Practices in the Primary Care Landscape,” which published in the American Family Physician, illustrates a pretty startling reality – 45 percent of all primary care physicians practice in a setting with five or fewer physicians. In fact, 17 percent are in a solo practice, meaning they are the only physician in the clinical setting. Now some will suggest that these percentages may be high, but the raw aggregate number of physicians in such settings is really small compared to those in large group settings. Again, according to researchers at the Robert Graham Center who wrote the American Family Physician article, this too is false. Of the 283,000 primary care physicians with an NPI number, 127,000 practice in a setting with five or fewer physicians and only 35,000 are in a setting with 75 or more physicians. Just to drive this point home a bit more, an astonishing 212,000 of the 283,000 primary care physicians (75 percent) practice in a setting with 25 or less physicians.
The second study, “Small Primary Care Physician Practices Have Low Rates of Preventable Hospital Admissions,” which published in Health Affairs found that physicians in practice settings with 1-2 physicians had 33 percent fewer preventable hospital admissions than practices with 10-19 physicians. When you consider the findings of the first study above, which shows that 45 percent of all primary care physicians are in a setting with five or fewer physicians, the key to improved quality may be in these smaller settings versus the large integrated systems as often suggested. While this is just one study, its findings are interesting since they demonstrate the true value of a patient-physician relationship. A longitudinal relationship between a patient and their physician is likely more important that any information technology or quality improvement process. Furthermore, the study suggest that solo and small practices embody and exemplify the core principles of the patient centered medical home – patient centric, accessible, comprehensive, and continuous even if they haven’t received such recognition from a national organization.
The third item of note is a recent letter submitted by 16 state Attorney’s General in support of the Federal Trade Commission (FTC) and their effort to block the merger of an Idaho hospital and large physician group. The AGs argue that mergers and acquisition in health care are driving up costs and have not demonstrated that they improve quality. The AGs argue that the elimination of competition, specifically through the acquisition of physician practices by hospitals, drives up costs and doesn’t improve quality. Not a good combination – consumers paying more for the same service is good for the partners or shareholders, but it is horrible for the individual consumers and their employers.
My point isn’t to diminish the value of large group practices, it’s to illuminate that policy-makers and legislators need to be mindful that the studies showing the “value” of large integrated systems are all very exciting, but they don’t reflect the reality of daily primary care practice – at least not daily practice as experienced by 75 percent of the primary care physicians in this country. I also would suggest that we need to dedicate more effort on helping these physicians provide care to patients versus telling them that they should abandon their practice settings.
There are a number of things that can and should be done to assist solo, small, and medium size practices, or as I will call them – the vast majority of primary care physicians. The most important is finding ways to help them continue providing care to their patients independent of the plethora of regulation and programs forced on them by government health programs and private insurers. Solo and small practices are drowning in a sea of regulation, we should throw them a lifesaver – not toss them an ICD-10 brick. The next most important thing would be giving these physicians and their practices an equitable and predictable payment structure. Congress needs to end the annual charade associated with the SGR and repeal this failed and exhausting policy once and for all. Physicians, especially those in solo and small practices, need a stable and predictable payment formula.
There may very well come a day when all physicians are integrated in large group practices, but that day isn’t today and, maybe we shouldn’t be in such a hurry to make physician integration happen.