Many smaller private or physician-owned practices have found themselves at a critical junction in recent years. Independent physicians are declining in numbers as the reach of consolidation widens, economic pressure intensifies and administrative burdens persist.
But, as one physician argues in a July 10 article published by The American Medical Association, the struggle to keep independent physician practices' doors open is driven by a number of factors.
Bruce Scott, MD, president of the AMA's board of directors, points out in the article that inadequate payment is the top reason that physicians sell their practices, according to the AMA's 2022 "Physician Practice Benchmark Survey." The physician payment rate has also dropped by nearly 30%, adjusted for inflation, since 2001.
Declining reimbursements are driving the inadequate pay problem, he writes, as physicians' payment rates do not increase with inflation. Private payers also tie their reimbursement rates to the Medicare payment schedule. He argues that payers often make it difficult for small or independent physicians –– who lack the backing of a large healthcare system or hospital –– to negotiate better rates.
He references an experience he and his physician partner had while negotiating a contract with a dominant payer in their regional market at their small otolaryngology practice in Louisville, K.Y.
"Our good-faith negotiations with that insurer went nowhere. My partner and I were caught up in the same type of squeeze play that private practices nationwide face constantly, in that we weren’t sure we could survive financially if we signed," he said. "But if we declined to renew, our patients would be harmed and we would still suffer financial consequences."
He advocates for Medicare payment reform that results in a system that is more consistent and responsive to physicians' needs.
"The goal should be protecting value-based care while safeguarding access to high-quality care where it is needed most," he added.
Prior authorization and burnout are two other factors he pinpoints as driving the exodus of physicians from independent practice. He argues private and smaller practices would benefit from measures that require insurers to offer prior authorization technology that integrates with EHR systems.
One such piece of legislation, the Improving Seniors' Timely Access to Care Act of 2024, is pending before Congress and would update prior authorization procedures to improve transparency and prevent delays.