Small Practices Do Many Things Well
Just when small primary care practices seemed headed for the dust heap, recent studies are saying "not so fast." Large practices, with their phalanxes of employed physicians, are rapidly becoming the norm, but the research suggests that small practices offer a viable alternative and can even produce better clinical outcomes.
Large practices thrive on the team approach and economies of scale, but small practices benefit from a personal style of care and allow physicians to practice the way they would, without interference by a large, impersonal organization.
"When you work closely with patients and empower them, they are going to make better choices," said Craig C. Koniver, MD, a solo family physician in North Charleston, South Carolina. He said a team of caregivers at a large practice will not have the same impact, because none of them are as close to the patient as he is.
A study[1] in the August issue of Health Affairs seems to bear this out. Focusing only on small primary care practices—those with fewer than 20 physicians—researchers looked at "ambulatory care-sensitive admission rates," covering such conditions as congestive heart failure, which can be prevented by high-quality primary care. The study found that practices with 1 to 2 physicians had ambulatory care-sensitive admission rates fully 33% lower than practices with 10 to 19 physicians.
This isn't the only evidence of small practices' clinical superiority. A 2013 study[2] showed that small practices in general had slightly lower hospital readmission rates than large practices, and a 2012 study[3] looking at practices ranging from 5 to 750 physicians found that the smaller ones had fewer ambulatory care-sensitive admissions and lower overall costs of care for diabetes.
All three studies turned a piece of conventional wisdom on its head: that large practices, with their care management teams and sophisticated clinical information systems, produce better clinical outcomes. The findings of the Health Affairs study "were unexpected, since small practices presumably have fewer resources to hire staff to help them implement systematic processes to improve the care they provide," the authors wrote.
Is It Too Late to Revive Small Practices?
The news that small practices deliver better care may be arriving a bit too late. For many years now, physicians have been fleeing from small practices, and the solo practices in particular. The Center for Studying Health System Change reported[4] that the percentage of physicians in solo and partnership practices plummeted from 40% in 1997 to just over 32% in 2005, and the number continues to drop.
There are a lot of doctors in small practices, including Dr Koniver, who don't see a pretty future. "This time, the solo practitioner is really going away," he said. What with larger groups and "team" care, "there is really no room in the environment for the solo practitioner anymore."
The key problem for small practices is low reimbursement. Rather than pay these doctors more for better outcomes, insurers actually pay them significantly less than doctors in larger groups. "In a small practice, you really can't negotiate for terms and fees," Dr Koniver said. "That's just the way it works."
Dr Koniver is not alone. Douglas A. Gerard, MD, a solo general internist in New Hartford, Connecticut, believes in small practices. Larger practices often employ nurse practitioners to do the workup, but "in my practice, I do the history taking," he said. "It's a chance to find out more about the patient."
However, Dr Gerard also thinks small practices are headed for extinction. He is age 60 and works in a town of 6000 people. "When I leave this practice, there'll be no one to take my place," he said. Merritt Hawkins, the physician search firm, reported that requests for searches for soloists fell from 22% of all requests in 2004 to 1% in 2012.[5] "Nobody wants to be Marcus Welby anymore," declared James Merritt, founder of Merritt Hawkins.
"I can't see anyone wanting to come out here and do this," Dr Gerard said. Medical students who rotate through his practice on clerkships don't show much interest in "entrepreneurialism," he said, and they tend to end up in large practices or hospital employment. The Graduate Questionnaire,[6] which all graduating seniors fill out, showed that less than 2% of 2013 graduates planned to go into full-time solo practice.
Dr Koniver said the decline of small practices has institutional roots. Many medical schools don't teach practice management, which is essential when you have to run a practice. A 2013 poll[7] of medical students showed that 37% of them were dissatisfied with their training in practice management and ownership. Dr Koniver added that when they enter residency training, new physicians are taught to work in groups. "It's a confidence issue," he said. "You don't want to be on your own."
Are Small Practices Still Relevant?
|
The Health Affairs study did not identify what aspect of practices with 1 to 2 physicians gave them better outcomes, but the lead author, Lawrence P. Casalino, MD, PhD, professor of healthcare policy and research at Weill Cornell Medical College, has a few theories.
"I don't want to romanticize small practices," said Dr Casalino, who started his medical career in a partnership. "One problem is that no one is looking over the doctor's shoulders. You don't know whether he's doing a terrible job." Still, these physicians are more likely to take responsibility for their patients and know them well enough to understand when they are truly sick, he said.
When a patient with a health problem calls up a small practice, Dr Casalino said, the call goes to the doctor or the nurse, who knows the patient very well, and they can tell by the tone of the patient's voice whether he needs to come in. Even on a very busy day," he said, "the doctor will say, 'Sure, I can squeeze him in. I'll just stay a little late.'"
In a large group, on the other hand, no one really knows the patient, and patients might even be seeing a different doctor each time. When they call in, their calls go to a scheduler who may never have met them. If it's a busy day, "the doctor will say, 'I can't see him, I'm full,'" Dr Casalino said. And if the doctor is getting a paycheck rather than paying himself, "he's not going to stay late to see this patient."
Not everyone, however, believes that small practices have much of a future. Greg Mertz, a practice management advisor in Virginia Beach, Virginia, agrees that it's possible for small practices to have better outcomes. "The patient-provider bond is much tighter," he said, "but it's not a function of being better clinicians. It's a function of being little. However, little practices are often inefficient."
In a small practice, he said, "there is not enough volume to hire a full-time employee for functions like care management," he said. "You can't hire half a person." Sure, the physician can take on the care management function, but that means extra hours of work. To do this work, the physician "has to go through patients' records and see who hasn't come in for check-ups," he said.
"Why do doctors become soloists? In some cases, it may be because they don't work well with others," Mertz said. He added that small practices are less likely to have electronic health records (EHRs). And even when they do have them, they're less likely to take advantage of all their features. This puts them at a disadvantage in reporting outcomes, which is needed to prove that they deserve higher reimbursements.
On the other hand, Mertz thinks large practices can learn from small practices and mimic their advantages. For example, he said, large practices can make sure that a patient always sees the same doctor.
Rosemarie Nelson, a healthcare consultant in Jamesville, New York, added that large practices can organize into "pods" of 4 to 6 physicians, each with its own set of nurses, and behave like small practices. Each pod knows its patients intimately, and unlike really small practices, they can take advantage of economies of scale in scheduling, billing, buying supplies, and negotiating with insurance plans, she said.
Nelson does not see much necessity in saving small practices. "It's really hard to give up the freedom of running your practice just the way you want to," she said, but in the face of mounting pressure on their income, "they might not see independence as an option anymore. It's either consolidate with other practices or retire."
Many physicians in small practices disagree that they can be so easily replicated by large practices. John Brady, MD, a solo family physician in Newport News, Virginia, loves his autonomy. "Every day I feel this sense of accomplishment that I can't imagine in a group practice," he said. "There is this entrepreneurialism that I didn't expect I would care about when I chose this model."
He concedes that he works somewhat longer hours than employed colleagues. However, he has a great deal of freedom in the way he spends his time. When he plays the role of care manager for his patients, he can draw from his deep experiences treating each of them. He doesn't have to fall back on specific process requirements, as a nurse care manager in a large practice would do, he said.
Dr Brady doesn't think that any large practice could truly mimic what he does. He feels that because he's involved in virtually all of the clinical care in his practice, it makes him more effective. "Continuity is high because it's basically just me," he said. "Every time you add an employee to a practice, you create new lines of communication, which increases the chances that some aspect of care won't get done. Things can get dropped because people think, 'This isn't my job; it's your job.'"
Creating a New Model for Small Practices
For small practices to survive in a new era of tight reimbursements and greater regulations, the old Marcus Welby practice had to be updated, Dr Brady said. He uses a model called the Ideal Practice, which reduces staff and adds a computer to the traditional small practice.
The model was developed by L. Gordon Moore, MD, about 14 years ago, when he was a quality improvement officer at the University of Rochester in New York. "I wanted to create the solo practice of the 21st century," said Dr Moore, now senior medical director for 3M Health Information Systems.
To test the model, Dr Moore opened a solo practice and ran it successfully for many years. He believes that a solo practice is the optimal model of quality and efficiency because all processes are observable to one physician. "You can see your own patient flow, message and information flow, and know that each event and task was associated with your work," he said. Even in a practice with just a few doctors, "you can't attain this level of efficiency."
In addition, the low overhead allows the physician to see fewer patients, which further improves outcomes. Before going solo, Dr Brady had been in a four-physician practice that emphasized productivity, and he didn't like it. "I wasn't able to connect with patients like I wanted to," he said. "There was more than one occasion when I felt that I was leaving the room before I got what the patient was trying to say."
He calculated that based on Medicare reimbursement levels at that time, he'd need to see just seven patients a day to bring home $150,000 a year in pay. Now that the practice has been established, he has exceeded that level.
Dr Brady said a computer is essential to Ideal Practice because it creates automated systems that can replace work that had to be done by hired staff and thus keeps overhead low, and low overhead is the watchword of a modern small practice. He can do his own billing with the aid of an EHR system. Although he concedes that many physicians wouldn't want to do the billing, he doesn't mind the task. "Billing is not so hard to learn," he said. "I consider it part of the job."
Even physicians who don't know about Dr Moore's model have developed similar approaches to keep overhead low and reduce the number of patients. When Dr Koniver was starting his practice and had very few patients, he worked out of the back of a converted ambulance and used it to make house calls. But he said he stopped using the ambulance and found office space because he couldn't use his cell phone or email while on the road.
Both Dr Moore and Dr Brady improvised on the original model and brought in nurses to provide health coaching and perform some other functions. A few years ago, Dr Moore passed the leadership of the Ideal Practice network over to Dr Brady. Physicians who join the Ideal Practice community can share ideas on the Internet and attorney meetings, which helps reduce the isolation of being on your own, he said.
Dr Brady said hundreds of doctors have adopted the model, but he doesn't know how many have kept with it. "It's not for everybody," he said. Physicians have to be well organized so they can deal with many distractions, and they should not have debts because it can take several years to build a patient base. He added that the model might not work in areas with unusually low reimbursements, high malpractice premiums, and high costs of living.
More Buzz Around Small Practices
The burgeoning dominance of hospital employment has, curiously enough, spawned new interest in small practices, particularly solo practice, according to Mary Pat Whaley, a practice management advisor in Durham, North Carolina. After a few years of employment, some physicians have become very disenchanted and decide not to renew their contracts. "Most of all, they don't like the productivity requirements of hospital employment," Whaley said.
About 4 years ago, she began to get a couple of calls a month from physicians asking about switching to solo or small practice. Now she gets 3 to 5 calls a week. They are of all ages—new physicians as well as physicians who opted for employment in mid-career. While many of the older doctors came into employment as members of a group, they usually leave employment on their own.
Whaley offers them 12 different solo practice models to choose from, including time-share offices, outsourcing staff and administrators, dropping Medicare, and refusing to accept insurance altogether and opting for concierge or direct-pay practice.
Meanwhile, physicians already in small and solo practices can improve their chances of survival by banding together in independent practice associations (IPAs) that share administrative services. Or they can even become clinically integrated, sharing the same tax ID number but keeping separate offices. Or they can choose some arrangement in between.
Jennifer Brull, MD, a solo family physician in Plainville, Kansas, shares services like billing and collections with four other physicians, three advanced practice nurses, and one physician assistant in the same county, but they all have different tax ID numbers. "We very much have something that looks like a group practice," she said. "When I leave town, I know there will be people to cover for me." But she doesn't share reimbursements. "The number of dollars I bring in is entirely dependent on the number of patients I see," she said.
In Connecticut, Dr Gerard is part of a much larger arrangement with a 50-physician group that takes care of billings and collections, a 401(k) plan, and group health insurance. But he hires his own staff and can opt out of certain insurers.
Barriers to Being Paid More for Quality
Dr Casalino said he hopes that his research findings will prompt insurers to consider rewarding small practices higher reimbursements for better outcomes. Currently, however, insurers pay small practices less than larger ones, and everyone agrees that it won't be easy to get them to change this preference.
Thirty years ago, when small practices were king, physicians could largely choose their "usual and customary" reimbursement rates. Now most medical care is tied up in preferred provider contracts. Insurers negotiate these contracts with large practices, allowing them to raise rates, but rates are assigned to small practices on a take-it-or-leave-it basis.
Things have been changing in recent years as insurers inch toward the concept of rewarding value of care. Pay-for-performance programs pay practices for meeting certain quality goals, but the payments are comparatively low and usually involve meeting process measures rather than clinical outcomes. What's more, practices often need EHRs to participate, and solo practices in particular have been much slower to adopt EHRs than larger practices.
Lately, however, they've been catching up to larger practices. A new survey[8] shows that solo practices' EHR adoption rate jumped from 42.3% in 2013 to 53.7% in 2014.
Dr Brull said her small group has purchased its own EHR system partly because the doctors wanted to show compliance with quality improvement measures under the Healthcare Effectiveness Data and Information Set (HEDIS). The group meets or exceeds national averages and "we will show the data to anyone who asks." But so far, insurers haven't been interested in paying extra for this, she said. Moreover, HEDIS goals are mostly process measures, so the group cannot take advantage of better clinical outcomes.
Reaping rewards for outcomes, however, won't be easy. Dr Brady said it's not possible for his small practice to demonstrate better outcomes. To do so, he would need to get data from insurers on the total cost of tests, hospital admissions, and other services that his patients have incurred.
But insurers don't want to share that data with him, he said. And even if they did share it, the volume for one solo physician—or even a small group—at one insurer would be too small to be a reliable measure. "You need at least 5000 lives to have accurate data," he said.
Dr Brady is also worried about the impact that accountable care organizations (ACOs) might have on his practice. The local hospitals and a large multispecialty group in his area have each launched an ACO, and most practices in the area are aligned with one of these systems. Dr Brady is still on the sidelines. "The anxiety is that I'll be squeezed out," he said.
"We're in a period of great transition," Dr Brady said. What happens in the next few years will have a great impact on the future survival of small practices, he said. "There are all kinds of questions about the viability of practice models in the long term. We'll have to see how this unfolds."
