A profile of solo/two-physician practices.

Lee, Doohee ; Fiack, Kelly James ; Knapp, Kenneth Michael 等

INTRODUCTION

The concept of small medical practices has received a great deal of attention in medical communities in recent years (Mitchell and Sunshine 1992, Cascardo 2011). According to a 2008 government report, small healthcare practices provided nearly three-quarters of all ambulatory care visits in the U.S. (Cherry, Hing et al. 2008). While a host of literature documents a wide range of small medical practices, including physician-owned specialty hospitals (Iglehart 2005, Mitchell 2005, Wilson, Carraher et al. 2008), information technology (Kralewski, Zink et al. 2012), quality of care (Arar, Noel et al. 2011), and the physician-industry relationship (Evans, Hartung et al. 2011), less is known about current practice behaviors of solo/dual physician ownership at the national level.

Understanding practice behaviors of solo and two-physician ownership is critical information for policymakers and health care practitioners in response to the ACA of 2010, but poorly understood in the literature. Hence, this analysis is aimed at unveiling a profile of solo/dual physician practitioners, using nationally representative physician survey data.

Next follows our detailed review on the background and its market environment of small physician practices and how the managed care marketplace plays a role in influencing small physician practices.

Background of Small Physician Practices

Several historical shifts in health care delivery and reimbursement have affected the attitude, desire, and the ability of physicians to enter the workforce in small practices. For example, from 1965 until the present day, the reimbursement and marketing strategy trends have completely reversed themselves. In the late 1960's and the early 1970's, most physicians enjoyed a prosperous time of growth. This period of time was accentuated by high levels of physician autonomy and excellent reimbursement in the then fee-for-service (FFS) based system (Wolper 2011). With changes in Obama Care and the advent of the managed care model for health care, the level of physician autonomy declined dramatically. Corporatization of health care systems forced individual practice physicians into hospital contracts and other combined practice partnerships (Stone 1997). Pre-certification is another example of compromised physician autonomy. Autonomy remains critical in small healthcare practices as clinical autonomy is an important factor in explaining satisfaction (Schulz and Schulz 1988).

Increasing evidence presents a decline in the desire of physicians to initiate and sustain their own solo-practice clinics. According to the 2006 nationally representative survey from the Center for Studying Health System Change (HSC) (Cunningham and May 2006), the proportion of physicians in solo and two-physician practices decreased significantly from 40.7% to 32.5% between 1996-1997 and 2004-2005, respectively. One plausible reason may be the changes in physician financial incentives in the past decades. It is suggested that physicians in larger, single-specialty practices get enhanced opportunities to offer more profitable ancillary services than those in a small medical practice setting (The Center for Studying Health System Change 2007). Other possible explanations may include the cost of setting up a practice, medical school loans, and lack of experience in running a practice. In addition to competing with hospitals, the single primary care physician (PCP) is also competing with larger groups of physicians. Many of these larger groups of physicians provide access for patients to multi-specialties in a convenient setting. It is easy to see that when faced with multiple competitors, newly graduated physicians and solo practitioners can feel inadequate to the task of setting up a competitive and lucrative practice. These obstacles together are so threatening that even some experienced and well-established physicians leave their solo and group practices in favor of larger groups or employment by a hospital (Casalino, November et al. 2008). The ability of physicians to become active small physician practitioners by marketing themselves is hampered by the current structure of the managed health care system. These barriers further decrease the new physicians' desire for small medical practice and even entrepreneurship. Thus, the new physician is trending away from small medical practices.

The review of the literature has stressed several factors that may affect the overall marketability of physician small practices. Those factors identified in the literature include: (1) physicians are forced to compete directly with larger hospitals for access to patients, (2) physicians that want to succeed in the marketplace must join in partnerships or contracts with other health care organizations, and (3) the continuous push to greater managed care practices is resulting in the decline of physician autonomy.

Competition with Larger Hospitals

The first factor affecting the marketability of small physician practices involves the relationship between hospitals and physicians that has been tenuous at best in recent years. However, this relationship has continuously been fettered with more and more problems. Traditionally, before the turn of the century, physicians recognized a clear delineation between hospital services and office services. Physicians used to consider the hospital as their "workshop" but today this customary relationship has been radically altered and physicians now view hospitals as competitors rather than compatriots (Pham and Ginsburg 2007).

Darr (2005) also argues that physician loyalty to hospital systems has all but disappeared. This is evidenced by the fact that physicians are now directly competing with hospitals by building specialty clinics. The types of interventions offered at these specialty clinics usually provide a high rate of return for the physicians. Historically, these interventions offer a hospital an increase in profit that allows them to continue to provide less profitable or even unprofitable services. This direct competition and "cherry-picking" of profitable services by physicians significantly hinders the hospital's ability to provide all health care services needed in their communities.

Strategic Alliance and Affiliation

As a result of increased competition in the current marketplace, it is increasingly important for small physician practitioners to align themselves with larger practices. Physician affiliation benefits medical communities in improving quality of patient care (Mehrotra, Epstein et al. 2006, Friedberg, Coltin et al. 2007). The current trend shows that more and more physicians are casting off their relationships with hospitals in an attempt to garner more of the healthcare marketplace in the U.S. (Pham and Ginsburg 2007). It is believed that the ACA of 2010 will greatly affect our transition marketplace including the way small medical providers practice and one way to sustain and foster small medical practices may be to introduce the concept of strategic alliances and care coordination with a larger hospital system in response to health care reform (Kocher, Emanuel et al. 2010). In his analysis of describing the relationship between entrepreneurship and association with a firm, Witt (1999) carefully posited that an entrepreneur requires the safety that a firm can provide, but conversely the firm requires the forward thinking and innovation provided by an entrepreneur. This relationship can be especially true with a new physician and his choice to join a larger physician group.

Physician Autonomy and Managed Care

The next issue impacting small physician practices involves how the restructuring of the health care system into managed care philosophies has had a direct impact on physician autonomy and essentially reversed the role of a physician from practitioner to businessman. Wolper (2011) points out that prior to 1965 the health care industry was characterized by a great increase in the amount of technology available for health care use, and high levels of physician autonomy. These and other factors, combined with limited government involvement, provided a prime environment for the growth of a physician practice. Most physicians did not engage in promoting their practices during the 1960s due to ethical standards but marketing alone as a solo-practice physician was very easy during this timeframe. The arrival of Medicare and Medicaid in the 1060s led to high compensation for physicians. Under FFS payment, physicians are frequently blamed for increased costs as a result of receiving unquestioned reimbursement. This unrestrained process of payment lead to hospitals becoming larger and in Wolper's terms, there was "growth of systems for the sake of growth." The effect of unrestrained compensation created a further influx of the number of solo-practice physicians.

Due to the increased spending and cost of health care, the federal government started to implement a prospective payment system (PPS) for Medicare. This allowed the federal government to regulate the reimbursement limits for specific interventions. This decrease in funding caused the health care marketplace to become more competitive. Organizations were required to restructure. Downsizing became a major trend, and it suddenly became difficult for a solo-practice physician to compete with the larger corporation hospital (Wolper 2011). One of the major changes during the 1990s was the growth of health maintenance organizations (Mahmood and Choi 2010). The current managed health care market system severely limited physician autonomy and satisfaction (Burdi and Baker 1999, Stoddard, Hargraves et al. 2001), and created a conflict of interest for physicians (Green 1990, Mechanic and Schlesinger 1996, Kassirer 2001). Physicians were now concerned about the financial end of the business where their paycheck was directly affected by their ability to cut expensive procedures for patients. This new system was the exact opposite of the FFS model where greater number of procedures equated to greater reimbursement to the physician.

On the basis of the aforementioned review of the literature and in an effort to fill the research gap of identifying characteristics of small physician practitioners, we aim to answer the following research questions. What is the current trend of small physician practices in the managed care marketplace at the national level? Are they giving up or sustaining their small medical practices? Who are those small physician practitioners (e.g., gender, age, race, primary care, board-certification, and geographical area)? Specifically do they provide charity and chronic care? How do they perceive market competition? Are their characteristics comparable to their counterparts employed in a large hospital system?

METHODOLOGY

Data

In order to explore evolving trends of solo and two-physician practitioners, we analyzed the 2008 Health Tracking Physician Survey (obtained from the Interuniversity Consortium for Political and Social Research [ICPSR]), which is the latest nationally representative physician survey data conducted by the Center for Studying Health System Change and funded by the Robert Wood Johnson Foundation. The mail survey was conducted between February 2008 and October 2008, and a total of 4,720 American physicians providing direct patient care for at least 20 hours a week participated in the survey. Excluded in the survey were federal employees, residents, fellows, specialists in fields where the primary focus is not direct patient care, and foreign medical school graduates who are only temporarily licensed to practice in the U.S. A list of physicians (n=735,378) was provided by the American Medical Association (AMA) and, after ensuring file accuracy, the sampling frame included 550,260 physicians. A stratified random sampling design was used for the survey and hence allocated the sampled physicians based on PCPs and specialists and across regions, in efforts to achieve the highest accuracy for national estimates. After reviewing sample allocation, initial eligibility screening, and returned survey rejection, 4,720 physicians out of 8,606 eventually participated in the study. A weighted response rate among eligible physicians is 61.9%. More detailed information on the data collection and methodology are described elsewhere (The Center for Studying Health System Change 2008, Strouse 2009).

Measures

The solo/dual physician practice dependent variable was assessed using the status of practice type (Solo/two-physician practice=1, other=0). Other covariates included in the analysis consist of charity care (the number of hours spent providing charity care in the past month), perceived market competition (1= not at all competitive, 2=somewhat competitive, 3=very competitive), overall career satisfaction in medicine (1=very dissatisfied, 2=somewhat dissatisfied, 3=neither satisfied nor dissatisfied, 4=somewhat satisfied, 5=very satisfied), the percentage of chronic patients, international medical graduates (IMGs) (yes/no), board-certification (yes/no), geographical regions (Northeast, Midwest, South, and West), and primary care physician (yes/no). Personal factors (age, gender, and race), in addition to medical specialty (internal medicine, family/general practice, pediatrics, medical specialties, surgical specialties, psychiatry, OB/GYN), were adjusted in the regression analysis.

Analyses

Solo/dual physician practices and their counterparts were directly compared in light of personal factors and other health services variables. All statistical analyses were conducted using STATA (StataCorp 2007). We utilized the survey ('svy') commands in STATA to correctly account for stratification and clustering in complex survey designs. Both descriptive and inferential statistics including two-sided t-tests and chi-square tests were performed to estimate any association among measured variables. We also undertook a multivariate logistic regression analysis to identify factors in relation to the status of small physician practices. We used two-sided tests of statistical significance at the p < .05 level and coefficients (s.e.) are reported in the regression analysis.

RESULTS

Figure 1 displays the proportion of solo/two-physician practices. About 33% of the sample reported small medical practices.

Table 1 presents characteristics of solo/two-physician practitioners in the sample. In a simple bivariate analysis, after adjusting for weighting, we found that male physicians favor small practices compared to their female peers (35% vs. 26.7%, p < .001) and minority physicians, with the exception of Native American physicians, were more likely than their counterparts to choose solo/two-physician practices (p < .001). Interestingly 43% of Hispanic physicians favor small practices. Also, an age gap between groups was noticed (birth year: 1954 vs. 1959, p < .001), suggesting older physicians favor small practices.

With respect to medical specialties examined in solo/two-physician practices (Table 2), psychiatry (47%) was the most accepted choice and pediatrics (28.14%) and medical specialties (23.35%) were less common among solo/2-physician practitioners. Solo/two-physician practitioners spent slightly more hours on charity care but it was statistically insignificant. Greater market competition was perceived among solo/two-physician practitioners compared to their counterparts (2.12 vs. 1.97, p < .001). Small physician practitioners provided fewer services to chronic patients (50% vs. 54.34%, p < .001) and are not satisfied with their overall career in medicine (3.90 vs. 4.07, p < .001). International Medical Graduates (IMGs) play a significant role in supporting the concept of small medical practice ownership as approximately half of IMGs were small medical practitioners (46%, p < .001). Small physician practitioners were less likely to be board-certified in their specialties (31.04% vs. 68.96%, p < .001).

Table 3 presents correlations for all variables assessed in the study.

Table 4 displays results of a multivariate logistic regression analysis. Solo/two-physician practices were positively associated with market competition (B = .24, p < .001), IMGs (B = .55, p < .001), PCPs (B = .78, p < .010) while controlling for confounding factors including medical specialty, birth year, gender, and race. Chronic patients were not correlated with the status of small practices but career satisfaction (B = -.15, p < .001) and board-certification (B = -.45, p < .001) were negatively linked to small medical practices. There was a variation across the country. Compared to the Northeast region, physicians in the Midwestern region were less likely to report sol/two-physician practices (B = -.009, p =.003) but those physicians in the South region (B = .26, p = .003) were more likely to choose small practices.

DISCUSSION

Our primary interest in this analysis was to describe practice behaviors of solo/two-physician ownership at the national level. Results from our analysis revealed the concept of physician small medical practices still represents a proportion of solo and two-physician practices (33%) that remains the same during roughly the past 5 years. However, we noticed diminishing beneficial roles of small physician practices in the delivery of medicine. For example, charity care was not correlated with small practices, which is inconsistent with prior findings that levels of charity care were highest among solo/small group physicians (Cunningham and May 2006). Also, the chronic patient variable was not significantly linked to small practices in regression but we found in inferential statistics that small physician practitioners did not favor providing chronic care. This may be explained by the fact that small physician practices have greatly competed with larger hospital and group systems. To this end, providing services to chronic patients may not be a sustainable choice because of a more prominent managed care system that now has discouraged expensive treatments associated with chronic conditions. The concept of social entrepreneurship, which has potential to advance population health (Wei-Skillern 2010), remains popular in management and medical communities in recent years. An opportunity potentially exists for small physician practices to effectively serve and enhance the care provided for medical needs of millions of chronic patients through innovative approaches; all while continuing to profit and be part of cost containment efforts within the health care community.

Consistent with past physician satisfaction studies (Sturm 2002, Katerndahl, Parchman et al. 2009), we found solo/dual physician practitioners were dissatisfied with their career in medicine, which is of concern as this can be a barometer of declining small physician practices in the future. There are several plausible explanations behind this finding. Perhaps this is because most solo/group practice physicians experience difficulty introducing information technology (Miller and Sim 2004). Another study revealed solo practice physicians were dissatisfied with a third party's fee schedule (Warren, Weitz et al. 1998). A national study of practicing surgeons (n=1738) by Sturm (2002) reveals that a small group practice is the strongest determinant of career dissatisfaction. Solo/two physician practices are more likely to report income pressures, but also report high levels of clinical freedom. Career satisfaction is an important human resource management (HRM) issue and hence assessing its causes and whether career dissatisfaction leads to physician defection to larger practices would help managers and practitioners to identify and establish long-term HRM strategies which will foster career satisfaction among small physician practitioners.

The finding that solo/two-physician practices are less board-certified is consistent with Chen et al. (Chen, Rathore et al. 2006), but the implication of this finding is unclear in the context of quality of patient care. One researcher documents physicians in larger and salaried groups, compared to solo practitioners, as being more engaging in quality improvement (QI) (Audet, Doty et al. 2005). However, not much is known about specific quality performance and its impact on small physician practices. We did not explore other quality care questions including pay-for-performance (P4P) and pay-for-reporting (or Physician Quality Reporting System). Conceivably this is another area of interest for future researchers to study.

In line with prior research (Morris, Phillips et al. 2006, Thind, Freeman et al. 2007), we found the positive association of solo/dual physician practices with IMGs. This is encouraging and may lead to the development of innovation initiatives and cost-saving strategies in their practice among IMGs who represent 25% of the U.S. physicians (Mullan 2005). IMGs provide a sizable amount of care to millions of patients and are a valuable labor force in medical communities, for example, in reducing rural physician shortages (Baer, Ricketts et al. 1998).

The finding that PCPs favor small practices is consistent with the current trend that most family physicians choose solo or small-group practices. Importantly PCPs as solo/dual physician practices have the potential to become innovative and creative in the delivery of medicine. This is particularly true under the ACA of 2010, which strongly supports and emphasizes the promising role of PCPs in advancing the patient-centered medical home. This may be comparable to Britain's health care delivery system emphasizing the role of its primary care and general practitioners (GPs). For example, their recent effort of the proposed Health and Social Care Bill of 2011 evidently echoes a medical care system that will be operated by GPs (Kerr and Scott 2009).

Our study findings are restricted with the following caveats. Our studied sample is predominantly male physicians and thus caution is necessary when generalizing our findings to female physicians and other health care professionals. In the same context, physicians excluded from the survey, including federal employees, residents, and fellows, may not fit our findings. This analysis is cross-sectional, meaning that our findings cannot explain causation of the association among measured variables. This research is subject to respondent bias as our findings are based on physician self-report. Our findings are limited to those variables measured in the analysis. Additional confounding variables may include, among others, organizational/environmental factors, ownership, information technology adoption/utilization, financial interest, and compensation. These may play a certain role in directly or indirectly manipulating findings in relation to the status of solo/dual physician practices. Future studies can advance the literature by investigating the impact of small healthcare practices to the delivery of medicine and how the aforementioned variables affect the practice pattern of solo/dual physician practitioners. In particular, an understanding of the potential role small physician practices play in relation to quality of patient care remains an important but poorly investigated subject in the literature. We also found a geographical variation in relation to small medical practices but it is unclear why there is a variation across the nation. More research is needed to unravel the causation of geographical disparity and further explore the impact of the variation to our healthcare system. Finally, as stated above, our analysis did not explore the association of small physician practices with financial performances compared to those physicians in larger practices. Future studies may benefit from investigating financial performance differences between small and large practices.

CONCLUSIONS

Although an opportunity exists with IMGs and PCPs, it is reasonable to conclude that the role of solo/dual physician practices is fading away in the delivery of medicine as they perceive greater market competition, are dissatisfied with their career, provide less charity/chronic care, and are less frequently board-certified. Our findings shed light on varied characteristics and practice behaviors of solo/two-physician practitioners. Small practice is favored by male, minority, older physicians. Also physicians in the South region tend to approve small practices. The concept of care coordination and patient-centered medical home has become significant in medical communities in recent years but our data suggest no role of charity/chronic care among small physician practices. Stakeholders including both governments and private industry now must consider fostering the prospects of a traditional private physician practice model so that recognized benefits such as continuity of care and charity care can be returned to the medical community.

The current healthcare market becomes an intimidating adventure for any new medical graduates and solo/dual practice physicians as they must face rapidly changing government regulations, limitless increases in cost, and an ever-increasing focus on establishing oneself as a businessman while losing autonomy in their practice. This may represent the current situation for solo/two-physician practices, but with the recent and rapid changes in health care policy, the future is uncertain. It becomes difficult to advise physicians on how to strategically market themselves in this volatile system. More research may be needed to reevaluate the potential value of small physician practitioners in the context of the newly passed ACA of 2010. Apparently the ACA poses a threat to a small private physician practice model as the new regulation favor a large hospital system, for example, in establishing Accountable Care Organizations (ACOs) (Fisher and Shortell 2010), which will be responsible for improving quality of patient care.

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DOOHEE LEE

Marshall University

KELLY JAMES FIACK

Eastern Maine Medical Center.

KENNETH MICHAEL KNAPP

Anesthesia Associates of Pocatello and Portneuf Medical Center

Table 1

Solo/Two-Physician Practices by Personal Characteristics
(n = 4,720)

             Solo/Two-Physician   Others           p
             Practices            Weighted,
             Weighted, 32.85%     67.15%

Birth year   1954.73 (10.31)      1959.04 (9.64)   <.001
  (mean)

Gender                                             <.001

Male         35.17                64.83
Female       26.7                 73.3

Race                                               <.001

White        30.55                69.45
Hispanic     42.83                57.17
Black        34.65                65.35
Asian        39.17                60.83
Native Am    34.58                65.42
Other        43.6                 56.4

Table 2

Solo/Two-Physician Practices by Medical Specialty and
Others

                          Solo/Two Practice   Others          p
                          Weighted,           Weighted,
                          32.85%              67.15%

Specialty (%)                                                 <.001

Internal medicine         40.94               59.06
Family/general practice   34.65               65.35
Pediatrics                28.14               71.86
Medical specialties       23.35               76.65
Surgical specialties      36.13               63.87
Psychiatry                46.59               53.41
Ob/Gyn                    33.18               66.82

Charity care (mean)       5.92 (9.48)         5.43 (12.55)    .115
Competition (mean)        2.12 (.72)          1.97 (.72)      <.001
Career satisfaction       3.90 (1.18)         4.07 (1.04)     <.001
  (mean)
Chronic patients (mean)   50.09 (31.51)       54.34 (30.34)   <.001
IMGs                      45.38               54.62           <.001
Board-certified           31.04               68.96           <.001
PCP                       35.61               64.39           <.001

The Statistical procedures: t-test and chi-square test

Table 3

Correlation Matrix for All Assessed Variables

Variables         1        2        3        4

Practice          1
  type
Charity care      0.02     1
Competition       .09 *    .04 *    1
Career            -.07 *   -.03 *   -.05 *   1
  satisfaction
Chronic           -.06 *   .04 *    -.06 *   -.06 *
patients
IMGs              .14 *    -.02     .07 *    .04 *
Board             -.11 *   .009     .007     .02
  certification
PCP               .04 *    .09 *    -.14 *   -.01
Specialty         .007     .07 *    .12 *    .02
Regions           .03 *    .01      .0003    .03 *
Gender            .08 *    .04 *    -.05 *   -.01
Birth year        .21 *    .009     -.04 *   .05 *
Race              .04 *    .04 *    .05 *    .002

Variables         5        6        7       8

Practice
  type
Charity care
Competition
Career
  satisfaction
Chronic           1
patients
IMGs              -.005    1
Board             .0007    -.13 *   1
  certification
PCP               .03 *    .07 *    .02 *   1
Specialty         -.27 *   -1.0     .03 *   .85 *
Regions           .01      .05 *    -.01    .02
Gender            -.05 *   .009     .03 *   .13 *
Birth year        .10 *    .09 *    .13 *   .07 *
Race              .01      .32 *    -.02    .05 *

Variables         9       10     11      12      13

Practice
  type
Charity care
Competition
Career
  satisfaction
Chronic
patients
IMGs
Board
  certification
PCP
Specialty         1
Regions           -.02    1
Gender            .04 *   -.03   1
Birth year        .07 *   .001   .23 *   1
Race              .07 *   .009   .09 *   .08 *   1

* p < .05

Table 4

Multivariate Regression Results for Estimated Associations
of Small Physician Practices

Covariates            Coefficients   Adjusted   t        p-value
                                     Standard
                                     Error

Constant              73.70          6.75       10.92    <.001
Charity care          .003           .002       1.33     .183
Competition           .24            .04        5.02     <.001
Career satisfaction   -.15           .03        -5.10    <.001
Chronic patients      -.002          .001       -1.60    .110
IMGs                  .55            .08        6.67     <.001
Board-certified       -.45           .10        -4.28    <.001
PCP                   .78            .14        5.49     <.001
Medical specialty     .15            .04        3.71     <.001
Regions
  Northeast           Ref.
  Midwest             -.27           .10        -2.63    .009
  South               .26            .09        2.95     .003
  West                .08            .10        .79      .431
Gender                -.32           .08        -3.92    <.001
Birth year            -.03           .003       -10.99   <.001
Race                  .06            .04        1.69     <.091

n = 4,537

Figure 1

The Percentage of Solo/Dual Physician Practice Ownership
(%)
            Others   Solo/two-physician practices

1996-1997   59.3%    40.7%
2004-2005   67.5%    32.5%
2008        67.15%   32.85%

Note: Table made from bar graph.