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Doctors Facing a Bleak Future Business and Financial Planning Model
By Dr. David Edward Marcinko; MBA, CMP™
[Publisher-in-Chief]
According to Physicians News, on March 19, 2009, the demand for family physicians is growing. Proposals for health system reform focus on increasing the number of primary care physicians in America. Yet, despite these trends, the number of future physicians who chose family medicine dipped this year, according to the 2009 National Resident Matching Program. What gives?
NRMP
The National Resident Matching Program [NRMP] recently announced that a total of 2,329 graduating medical students matched to family medicine training programs. This is a decrease in total student matches from 2008, when 2,404 family medicine residency positions were filled.
Primary Care Demand Explodes
Meanwhile, demand for primary care physicians continues to skyrocket. For example, in its most recent recruitment survey, Merritt Hawkins, a national physician recruiting company, reported primary care physician search assignments had more than doubled from 341 in 2003 to 848 last year.
The Decline of Solo Medical Practitioners
Regular readers and subscribers to this Medical Executive- Post are aware of the declining number of solo medical practitioners; we have been sounding the alarm here, in our books, journal, speaking engagements and elsewhere for years now.
In fact, the statistic that we often cite is that more than 40% of the nation’s physicians are employed doctors; not employers as in the past. This business model shift has occurred over the past decade or so, and has accelerated of late. The decline in solo and independent doctors has occurred elsewhere as well, but much more slowly [i.e., dentistry, podiatry and osteopathy] as these specialties have been somewhat isolated from the traditional allopathic mainstream.
Going forward, this solitary model seems to be a good thing, and a fortunate result of the un-intended consequence of previously keeping these folks out of the healthcare mainstream.
The Decline of Independent Medical Practitioners
Now, in the March 2009 issue of Healthcare Finance News, we learn that the number of hospital owned physician practices has been climbing over the last four years, according to the Medical Group Management Association [MGMA]. Think: PHOs back-in-the-day. 
And, while this trend only marginally affects patients and patient care, it is quite disruptive to physicians, their families, personal wealth accumulation, retirement and estate planning endeavors.
For example, according to Professor Hope Rachel Hetico, RN, MHA, CMP™ of our firm www.MedicalBusinessAdvisors.com
“The professional good-will valuation component of a medical practice is being decimated. Today, some practices are being bought and sold for tangible asset value, only.
Assessment
Therefore, allow me to identify this emerging trend which suggests independent medical practice as reflective of solo primary medical care. In other words, as independence goes the way of the “dodo-bird”, so goes primary care practitioners precisely at a time when the later is needed more than the former.
Why? Employed doctors stay that way by making money for their employer and hospital-bosses. Specialists make more money than primary care doctors. So, if you want to stay an employed doctor; which specialty would you pursue?
Answer: The NRMP class this year spoke out loud and clear. Any specialty but primary care!
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Conclusion
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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
- PRACTICES: www.BusinessofMedicalPractice.com
- HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
- CLINICS: http://www.crcpress.com/product/isbn/9781439879900
- ADVISORS: www.CertifiedMedicalPlanner.org
- FINANCE: Financial Planning for Physicians and Advisors
- INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
- Dictionary of Health Economics and Finance
- Dictionary of Health Information Technology and Security
- Dictionary of Health Insurance and Managed Care
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Filed under: "Doctors Only", Career Development, Estate Planning, Financial Planning, iMBA, Inc., Managed Care, Op-Editorials, Practice Management, Practice Worth, Retirement and Benefits | Tagged: ADA, allopath, AMA, APMA, david marcinko, DDS, dentist, DO, doctor, DPM, family practitioner, hope hetico, iMBA, Inc., internist, MD, National Resident Matching Program, OD, optometrist, osteopath, pho, physician, podiatrist, primary care, residency match, www.healthcarefinancials.com, www.healthdictionaryseries.com, www.medicalbusinessadvisors.com |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
Saving Primary Care
We often wonder if forgiving medical school loans, often exceeding $140,000, would help more medical students choose primary care? It’s like the Obama administration’s various “cram-down” contract financial re-negotiation efforts.
Now we learn that students at Harvard Medical School were the lucky recipients of an offer by an anonymous donor, offering $60,000 to students who entered, and completed, a primary care residency.
So, will the money help sway some students? Let’s say that $60,000 can be made up in about 3 months if a student chooses something like dermatology over family practice.
Link: http://certifiedmedicalplanner.com/MDs.aspx
So, we can’t say that money will sway many; but it definitely can’t hurt. Otherwise … a bird in the hand … is worth two in the bush!
Susan
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Kevin Pho MD reported that 60 percent of patients felt appropriately “connected” to their primary care physician.
According to a reprted study, patients who were not connected were less likely to receive recommended preventive care and other screening tests. This is not surprising as it is increasingly difficult to find a new primary care doctor in the first place, but those who accept new patients are part of larger groups, work part time, or are mid-level providers who work in concert with physicians.
Furthermore, with the proliferation of retail clinics and the worsening of crowded emergency departments, more patients are obtaining primary care from multiple providers.
All this means that as we move forward, it is less likely that patients identify with a single person they can call their primary care provider. So much for the medical-home, or dental-home model! Moreover, with an increasingly mobile society, prompted by the mortgage mess and unemployment rate, this is not surprising.
And, perhaps more preventive care measures will fall by the wayside, as well. Yet, this may not be a bad thing, considering the current over-diagnosis, over-imaging and over-treatment epidemic.
Joan
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Dr. Marcinko, Susan and Joan,
Agree with the above post. It seems that far too many doctors are leaving primary care/private practice, etc.
http://extramd.arielmis.net/?p=744
Poor timing indeed; Obama!
Phil
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Phil
More on primary care and medical students.
http://medscape.typepad.com/thedifferential/2008/12/enough-whining.html
Chet
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Healthcare Stakeholder VIDEO Discussion on Primary Care
Betty
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Dr. Marcinko,
You are so correct.
Over 26 percent of respondents to a recent poll on Sermo, the world’s largest online community for physicians, have admitted they had been forced to close, or are considering closing, their solo practice.
http://www.healthcarefinancenews.com/news/survey-over-26-percent-solo-docs-may-close-their-practices
Jane
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More on Primary Care
Bob Wachter MD wrote an interesting piece called: What’s Behind Today’s Primary Care Crisis [You Don’t Know the Half of It]
For example, Bob reported that in addition to daily patient visits, each doctor in his essay reportedly also:
• Made 24 telephone calls
• Refilled 12 prescriptions (a vast underestimate of the daily refills, since a) the number reported in the study doesn’t count refills done during an office visit, and b) the study counted the act of refilling 10 meds for a single patient as one refill)
• Wrote 17 e-mails to patients
• Looked at 11 imaging reports, and
• Reviewed 14 consultation reports.
http://www.thehealthcareblog.com/the_health_care_blog/2010/05/whats-behind-todays-primary-care-crisis-you-dont-know-the-half-of-it-.html#comments
So the GPs, FPs, PCPs and DNPs are busy folks, indeed.
Dr. David Edward Marcinko; MBA
[Editor-in-Chief]
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Maintaining autonomy in private practice
Despite all the uncertainties the future may hold for solo and private practices, some medical management experts, like me, still believe “there will be every opportunity for practices to be successful as they move toward more value-based care.”
http://www.physbiztech.com/how-to/maintaining-autonomy-private-practice?email=MARCINKOADVISORS@MSN.COM&GroupID=116654
Dr. David Edward Marcinko MBA
http://www.BusinessofMedicalPractice.com
[Editor-in-Chief]
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Private practice model dwindles below 40 percent
The number of U.S. physicians in private practice has dipped below 40 percent, according to research conducted by consulting firm Accenture.
Click to access Accenture-Clinical-Transformation-New-Business-Models-for-a-New-Era-in-Healthcare.pdf
The exodus from private practice — down from 57 percent in 2000 — can be attributed in large part to government regulations requiring the adoption of health IT and the meaningful use of EHRs.
Dr. David Edward Marcinko MBA
http://www.BusinessofMedicalPractice.com
[Editor-in-Chief]
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Private Practice: The End Is Near
That hissing sound you are hearing right now is the final bit of air leaking out of the private practice of medicine. Faced with a perfect storm of escalating costs, crashing reimbursements, patient consumerism, and a government mandate to push physicians into the public realm, more and more doctors have abandoned the world of Marcus Welby, M.D. for the apparent safety of Grey’s Anatomy. The general drift to hospital employment that has marked the past few years has now escalated to a stampede, with the introduction of Obamacare and the targeted small business tax increases that loom on the horizon.
In their 2012 annual report on medical recruitment incentives, Merritt Hawkins notes that 63% of its search assignments in 2011/12 featured hospital employment of the physician, up from 56% the previous year and only 11% eight years ago. In a 2011 survey of final-year US medical residents, Merritt Hawkins also found that the majority preferred hospital employment to private practice. Nearly one half of all senior residents polled said that they were unprepared for the business side of medicine.
Source: Raymond Rocco Monto, MD, Medscape News [12/7/12]
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Dear Medical Student,
We are familiar with the above and related studies, and believe the “end” is indeed near but only for about 60% of our medical colleagues. The remaining 40% or so will thrive!
This ME-P and our related books, texts, dictionaries, seminars and online courses in practice management and finance will help those “next-gen” doctors who are innovative, independent and brave enough to go it alone … and ultimately succeed.
Remember, the entity that can give you a job – can also take it away.
Dr. David Edward Marcinko MBA CMP™
http://www.BusinessofMedicalPractice.com
[Editor-in-Chief]
More Sources:
Health Dictionary Series: http://www.springerpub.com/Search/marcinko
Practice Management: http://www.springerpub.com/product/9780826105752
Physician Financial Planning: http://www.jbpub.com/catalog/0763745790
Medical Risk Management: http://www.jbpub.com/catalog/9780763733421
Hospitals: http://www.crcpress.com/product/isbn/9781439879900
Physician Advisors: http://www.CertifiedMedicalPlanner.org
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NOT so bleak future for private medical practice
http://medicaleconomics.modernmedicine.com/medical-economics/news/who-says-independent-practice-dead-58-physicians-dont-want-sell
Dr. Buba
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Medical practices look to retain autonomy in changing healthcare environment
I don’t think there is anyone reading this blog who doesn’t understand the importance of small business to our free market system.
So, it’s interesting to me that emphasis on respect for the small businesses is always a cornerstone of political rhetoric around election cycles.
Despite this emphasis and apparent admiration for the risk-taking, entrepreneurial types who are responsible for so much growth and security, we constantly see more constraints that make it harder and harder for small businesses to survive.
http://www.medicalpracticeinsider.com/blog/business/medical-practices-look-retain-autonomy-changing-healthcare-environment
There is no better example of this phenomenon than the healthcare reform law, a.k.a. ObamaCare.
Brian Bourke MBA
Healthcare Consultant Manager
[Honkamp Kruger & Company]
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Not all doctors giving up private practice
“To paraphrase Mark Twain, the reports of the death of private practice medicine have been greatly exaggerated,” according to Dr. Ardis Dee Hoven, president of the American Medical Association, who opined thusly in a recent news release touting the findings of a recent survey.
http://www.modernhealthcare.com/article/20130917/BLOG/309179996?AllowView=VW8xUmo5Q21TcWJOb1gzb0tNN3RLZ0h0MWg5SVgra3NZRzROR3l0WWRMWGJYZndHRWxyd01qUzMyWmVpNW5zWUpiV24=&utm_source=link-20130917-BLOG-309179996&utm_medium=email&utm_campaign=mostreq
Dr. Bruehl
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Solo Medical Practice
http://www.kevinmd.com/blog/2013/11/death-solo-practitioner-bad.html
Is the death of the solo practitioner a bad thing?
Pilar
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