Obamacare: Why Doctors Giving Up Private Practice is a Good Thing

In the past 10 years, America has seen a rapid growth in purchases of small practices by hospitals and large medical practices. In 2000, 57% of doctors owned a private practice. This number decreased to 39% in 2012 and is expected to decrease to 36% by the end of this year. Soon nearly all specialists will be the employees of hospitals and work in hospital-owned practices, rather than owning their own practice and being contracted out in hospitals. Many doctors are eager for this change, giving multiple reasons for selling their practice. The top reasons are business expenses, prevalence of managed care and the ACA’s new requirement for expensive electronic medical systems.

Although many of us may be nostalgic about the days when our doctor ran the practice in town and there was no big business to deal with, huge benefits from this new era of medicine will soon be realized. Many improvements will be made with regards to efficiency and transparency in medical records; however, what people are not talking about is how this will change the way doctors practice medicine for the better. First, doctors’ income will no longer be tied to the amount of procedures they perform on patients. Second, doctors will be held accountable if they do not practice evidence-based medicine.

Currently, doctors who run their own business receive payments from insurance companies based on the work they perform. Years ago, the price of this work was decided by physicians in each practice. After the Omnibus Budget Reconciliation Act of 1989 was passed under George H.W. Bush, however, the resource-based relative value scale (RBRV scale) was put into use. Originally this relative scale was intended to outline the relative amount of work a doctor performs and how much they should be compensated from government Medicare payouts. This system is now used by nearly every insurance company in the United States; insurance companies bargain with individual practices, for instance offering to pay 1.3 times that what Medicare pays, based on the BRRV scale.

This cataloguing of relative work has had terribly negative consequences. As one can imagine, administering a blood test is considered more work than speaking to a patient about a healthy lifestyle for 20 minutes. This practice of paying doctors heavily for procedures, and essentially nothing for physicals, gathering patient history, and talking about a healthy lifestyle has resulted in doctors, especially those whose income is based on how much money the practice takes in, providing improper, unnecessary, expensive care. Once doctors are paid a salary and move away from incomes dependent on mastering the RBRV scale we will see better health care, and fewer radiologists trying to recover the cost of the MRI machine they just bought by administering unnecessary scans.

We will also see an increase in the amount of evidence-based practice. Currently most doctors do not have a boss, and the only method in place to ensure doctors treat patients with the most up-to-date care is through malpractice suits. However, this method has been shown to fail. Firstly, the public rarely knows when doctors have not used evidence-based care. This may be due to patient’s unawareness that better care is available or that patients recover anyways, just taking more time to do so . Also, when considering preventative care, many patients are unaware that a disease they have now could have been prevented by screening for it years ago.

Secondly, when patients are aware of malpractice, many are unable to front the money necessary to pursue a lawsuit. Therefore many doctors are able to get away with antiquated practices they may have learned 20 years ago while attending medical school. The Institute of Medicine estimates that a new treatment for a given disease takes 17 years to become standard treatment after it has already been proven to be more effective than the previous standard. In an integrated system, where doctors report to a boss, these outdated practices will not go unnoticed as they have for so many years. Two reasons will encourage this change. One, as public report cards for doctors become more prevalent, integrated systems will compete to have the most up-to-date doctors and weed out those not keeping up to the newly high practicing standards. Two, as new practices become available that save money in long run costs, integrated systems will not tolerate doctors practicing outdated medicine.

In today’s sphere of medicine, the public gives doctors too much leeway, always assuming they will do the best for the patient. This utter lack of accountability in medicine is a one of a kind. Such a concept would never be tolerated with our pilots or engineers and we should not tolerate it with our doctors. Although we may believe in our hearts that doctors always practice the best medicine, taking 17 years to begin new practices is far too long. Integrated systems is the first step to making this change.