Autonomy is top of mind for many physicians as the workforce migrates to employment over private practice,and some leaders are joining forces to leverage the power of a group.
Robert Bray Jr., MD, CEO and founder of Newport Beach, Calif.-based DISC Sports & Spine Center, joined Becker's to discuss how his team's model offers a solution to private practice physicians looking to maintain control, while still accessing economies of scale.
Editor's note: This response was edited lightly for clarity and length.
Question: Why are physicians losing autonomy and how can they get it back?
Dr. Robert Bray: The problem starts at the insurance company level. The problem is that an individual physician has no power to negotiate with an insurance company. To an insurance company, they're basically irrelevant, because they're not a blip on their radar for size and scope. So if you go to a payer and say you want a different individual contract rate, they just completely blow you off. Their mentality has been to negotiate price breakpoints to keep getting lower and lower lowering costs, without regard to quality. Their mechanism is inadvertently pushing more complex decision making at a higher price break. The way the payer market is set up is incentivizing you to try to do more. And when they finally cut costs enough, it starts moving the marketplace.
Physicians are being pushed so far that it has become difficult to practice because the reimbursement cuts are so high. This is leading physicians in the direction of taking a job, getting a salary, etc. And the hospital systems, if they are big enough, can have negotiating power with the insurance company. The problem is as an employee of the hospital, that negotiating power doesn't help you at all. It helps the hospital system. Many physicians are now deciding that they're unhappy with being employed, and the problem there is that systems are not looking after the surgeons and putting them first. They have become a commodity and treated as such. They are quite unhappy. They've lost their autonomy. They don't have much.
My two cents on the answer to this is that if they wish to maintain autonomy, they have to gain that position or power that otherwise the hospital system or someone else would have. The problem there is very strong lobbies from insurance companies and very strong lobbies from hospitals that have made that a very dicey legal field. There's all these rules that are put in place that prevent unionizing and prevent discussion of prices. And while it was put in place probably with good intent to keep the insurance companies with the power of setting prices, it ended up crushing autonomy. This is what has reduced physician autonomy.
The only answer I have found, which is actually the basis of why I created our structure, is we take a bunch of private practice physicians and affiliate their corporations through a management contract. We're selling them a service, but what we're doing is we are negotiating as a whole with the insurer to get enough power bundled. We're able to put the surgeon first. It's giving the physician some say, in essence, by bonding together as a group.
Now you could do that the way we did it by joining a management structure or you can do it by joining a large group of physicians, but you have to be very careful that the large group you join is not just a couple senior partners who are taking advantage of the junior guys coming in. That's happened to a lot of the groups we've seen. You need a physician-first model. And we've found it's cost efficient to do this. We've left them their autonomy, but we're incentivizing them to make cost-efficient decisions, as opposed to just making a decision to survive price breaks because they've been squashed by declining rates. They get paid fairly. They still have to work hard, but it's still a very cost-efficient number.