Survey Shows 90% of Future Physicians Intend to Avoid Private Practice

Survey Shows 90% of Future Physicians Intend to Avoid Private Practice

The results from the 9th Annual Epocrates Future Physicians of America Survey were recently announced. More than 1,400 medical students were surveyed, and their results indicate a significant decline in doctors expecting to enter private practices in the future. As a matter of fact, 90 percent of these future physicians intend to avoid private practice and an astounding 73 percent plan on employment with hospitals and large group practices. This shows a 50 percent drop in medical students aspiring to join or start their own private practices since 2008. Here are some of the reasons:

    • Insufficient instruction in practice management, billing, and coding. About two-thirds of the medical students in the Epocrates survey stated that they were not satisfied with the education they received regarding ownership, practice management, and coding and billing. Owning and managing a private practice requires many hours of administrative work, and future physicians would need to have a solid understanding of human resources, billing, claims processing, and electronic health records systems. Although physicians hire administrative staff to handle these tasks, they need to understand the tasks themselves in order to oversee the operations and handle any problems.
    • Lack of up-to-date communication technology. Private practices may struggle to keep up with rapidly developing technology, due to lack of funds necessary to purchase such equipment, or lack of understanding as to how it functions. The survey showed that 96 percent of the future physicians believe that teamwork, data sharing, and communication are key components in ensuring high-quality medical care, but 60 percent feel that a lack of proper technology impedes these advances. Medical students such as Michael Douglas, a student at Loma Linda University of Medicine, share similar concerns:

“Communication tools are broken or antiquated, and this impedes our ability to provide continuity of care for patients…. we’re still stuck in the 90’s using archaic paging systems and fax machines.”

    • Cost. The cost of owning a private practice can be a significant deterrent for future physicians, and even proving too much for some current private practice owners who are forced to close their doors and move on to hospital employment. Private practice bills include payroll, rent, utilities, medical equipment, and office supplies. Many private practices are experiencing a drop in the number of patients, while still more have many patients who cannot pay their bills. Insurance companies can be difficult to deal with and many doctors do not receive payments from insurers in a timely fashion. According to the Commonwealth Fund, practices spent $82,975 per doctor in 2011 dealing with insurers. Many doctors also dish out a lot of money to collection agencies each year in an attempt to collect payments from patients. The unfortunate result is that the cost of owning a private practice grows far more rapidly than the reimbursement. Private practice owners have all of these monetary headaches, while hospital employees enjoy state-of-the-art technology without worrying about how they’ll pay for it. Some hospitals even offer their doctors incentives based on how many patients they see.
    • Long hours/stress. When you own a private practice, you have to be there-a lot. Even if you have a few other doctors in your private practice, you are still going to need to be there almost all day long, most days of the week. In addition to patient appointments, you need to oversee all of the administrative operations and be available to fix any problems that may arise. You are also responsible for pretty much everything that happens in your office – if your receptionist is grumpy, you’re going to hear about it. Your parking lot is too small? Yep, your fault. You’re out of hand soap? Oops, you forgot to fill out that restocking sheet last week. Your practice is truly your second household, and it can be stressful trying to make sure everything goes smoothly. Hospital jobs are far more enticing to medical students because they allow a physician to focus their time and attention solely on the patient, without administrative or housekeeping worries. Hospital employment also allows physicians a better work-life balance, giving them more time to spend at home with their families and less stress overall.

Many private practices are integrating with larger practices or hospitals due to rising overhead costs, problems with insurance reimbursements, loss of patients, and increases in patients who do not pay their bills. Hospital employment offers physicians more manageable schedules, less stress, higher salary, access to advanced technology, and more time to focus on patient care. Although hospital employment certainly seems more appealing, there are certain drawbacks-the doctor/patient relationship may not be as familiar or personal as one might establish in a private practice, requiring doctors to connect with patients in a new way. Hospital employment also requires a stricter adherence to scheduling, where a private practice might allow for more flexibility with schedules.

This developing trend in private practice may work well for primary care and some specialties that can function well in the hospital setting, but we don’t think it is entirely true for all surgical practices, especially those with ownership in ambulatory surgery centers, like ophthalmology. As such, our ophthalmology clients will likely see the landscape of their private practices changing, but not through hospital acquisitions. Likely, the private practice market will create larger private practices, management service organizations (MSOs) and revenue cycle management companies that are going to be a significant part of the private practice arena. The resurgence of newly developed MSOs and revenue cycle management companies in the marketplace would allow the private practices to focus on patient care while cutting expenses, investing in more advanced technology, negotiating appropriately with insurance companies, negotiating with vendors and having a professional company collect the money that is due to them without having to write it off as bad debt.

Many in the medical industry believe that the future does not look bright for small private practices. Although current statistics and trends do support this belief, there are also many who believe the decline of the private practice will plateau, eventually re-emerging as a new and improved innovative medical care option. For now, though, the majority of medical students are drawn to the less stressful and more lucrative hospital and academic medical center employment.

Please feel free to contact us for more information regarding the future of private practice.