The Achilles Heel of Group Practices

Kenneth J. Terry, MA


August 18, 2011

In This Article

Bureaucracy Is Inevitable

As physician groups grow, they start to sprout committees and become bureaucratic. This may happen when a group has as few as 7-9 doctors, says Borglum. Bigger groups also hand their governance over to an executive committee of some kind. "The people who are not in the centralized governance often feel uneasy about what those guys are doing," he notes.

Other problems can grow from this bureaucratic tendency. For example, Borglum points out, the administrator of a large group has more power than an office manager does in a small office and may tell the doctors what to do in areas related to practice management. Some physicians have a hard time accepting a nonclinician's authority over them, he says.

The division of labor in larger groups is inevitable, observes Lori Schutte, president of Cejka Search, a physician recruitment firm based in St. Louis. If a physician is being considered for a job, for instance, it doesn't make sense for every physician in a 10-doctor group to interview that candidate. "In the same way, you can't have everybody handle the checkbook or pay the bills. At some point, you need a finance committee that will make the financial decisions for the group."

Nevertheless, when a group gets large enough that most decisions are no longer being made by all the partners, physicians may feel they are no longer in charge and that they have become employees. "That's where older doctors have a tough time," says Mayse.

Observers agree that young physicians just out of training tend to adapt to group practice better than do older doctors who have been in private practice for years.

Many older physicians who are now joining groups feel they are being forced to do so, explains Mayse. It has become too difficult for them to maintain their solo or small practices, so they have given up the ship.

It's Hard to Stop Being the Boss

That does not mean they have given up the habit of command.

"If you have been in your own practice for 20 years, and you are used to making all the decisions, setting all the rules, and being the master of your own destiny, it's hard to walk into a practice setting where there are 10 to 15 other stakeholders and all the decision-making is shared," says Schutte.

Moreover, younger doctors go into group practice with certain expectations: They are trading autonomy for lifestyle and security. Many older physicians still think they can change things around to suit their preferences, Mayse says.

"The older physicians are jumping in and saying, 'We'll fix it, we'll find a way to reduce costs and reduce management and make it work,' and banging their heads against the wall. The younger doctors are different. They come in and say, 'This is going to be my role, and I'm not going to try to take on too much.'"