How Can Private Practice Survive Hospital Onslaught?

Kenneth Terry, MA

Disclosures

June 21, 2012

In This Article

Introduction

Are you a physician in private practice struggling to stay afloat as one after another of your colleagues has taken employment in hospital groups? If so, you’re not alone. As more and more physicians take positions in hospital groups, independent practitioners face an array of challenges.

Simon Prince, MD, leader of a 6-doctor nephrology practice based in Manhasset, New York, found himself in this situation. His practice is struggling to remain independent in the shadow of North Shore-Long Island Jewish (LIJ) Health System, the area's dominant healthcare provider -- a 15-hospital system, which employs 2400 physicians. "It's a huge behemoth and growing," Prince comments.

Many of Prince's colleagues have given up private practice to work for North Shore-LIJ. Meanwhile, the remaining independents are also feeling pressure to join the employed groups of New York City hospitals, including NYU Medical Center and Mount Sinai Hospital, which have established beachheads on Long Island.

"There isn’t a day that goes by that we're not hearing about someone talking to a hospital system or joining a hospital group," Prince says. "We're trying to stave that off."

Hospital employment of area doctors is creating challenges for Prince's practice. "It's shrinking my referral base," he reports. "As a specialist, that's a big concern." The hospitals are directing the referrals not only of their primary care physicians but also of cardiologists, endocrinologists, and surgeons who have referred to him and his partners, he notes. "The more employed physicians there are, the smaller the pool of referring doctors, and that makes it tougher for us to compete."

Lindsey Ma, an obstetrician/gynecologist based in Peoria, Illinois, and President of the Peoria Medical Society, is facing similar issues. OSF Saint Francis Medical Center, the dominant hospital, together with 2 smaller hospitals, has snapped up most primary care physicians and many of the specialists in town. Saint Francis has "aligned" with other physicians by making them medical directors of its service lines. The majority of obstetrician/gynecologists have so far been spared, notes Ma, because the Catholic hospital doesn't want to employ doctors who prescribe birth control.

While Ma has strong relationships with referring doctors, he says, the hospital employment of many of these physicians has placed a lot of pressure on his colleagues. "Unless you've been here for 20 years (like I have) and have a reputation as a good practitioner, once you get the hospital hiring the majority of primary care physicians, the referrals are bottlenecked and controlled by the hospital."

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