Posted by: notdeaddinosaur | August 18, 2012

Bigger and Smaller

Medicine has gone down Alice in Wonderland’s rabbit hole. Looking at the size of practices today, it seems like some of them have taken red pills and the rest have taken blue ones: most of them are getting bigger and bigger and bigger, while some are getting smaller and smaller. As the giant practices gobble up their competition to become ever more gargantuan, others are shrinking down into micropractices.

Everyone has an excuse.

Accountable Care Organizations supposedly mandated by the Affordable Care Act require giant conglomerates of physicians to provide all the care (care management, actually) for whole populations in order to (somehow) spend less while doing so. That this fails mathematically seems as lost on the current crop of folks as it was on their predecessors who brought you HMOs twenty years ago. Still, it requires doctors to organize into large groups; the larger the better.

Others speak of economies of scale. Larger groups are supposed to have more buying clout for supplies and other services. That may be, though I do pretty well at Costco. They certainly have more clout negotiating with payers, though again, this has nothing to do with saving money, since they often have enough pull to rake in significantly more of it. In fact, there are many diseconomies of scale: larger groups need more space (higher rents) and more support (higher payroll). It’s much harder to make changes in how things are done when having to go through a chain of command.

Because of these and other reasons, many doctors — both primary care and specialties — are going the other way: smaller and smaller. The end result, of course, is the micropractice: one doctor, all alone, usually supported by a fair amount of technology. Answering machines (or GoogleVoice) to pick up the phone while seeing patients and electronic medical records (both for medical documentation and for scheduling) make the model viable.

I’ve gone both directions. When I first started out in practice, I assumed I would eventually take on partners and grow into a group of some kind. I bought an office condo, then later bought the one next door and expanded. I took on a PA, then an NP. The practice grew all right. My strategy was to get the numerator where it should be, then grow the denominator. Things didn’t quite work out, though. With each addition, my income nose-dived. There was no way I could afford to bring in another doc. Eventually both the PA and the NP left for greener pastures. The staff shrank from four back down to two, then to one. Looking back over the finances, I discovered something interesting: the smaller I was, the better I did.

Now I watch small groups merge into bigger ones and big ones merge into enormous ones. Everyone else seems to see this as progress. Everyone except the patients, that is.

Think about the Patient Centered Medical Home (PCMH). Here is what it’s supposed to do:

[P]rovid[e] comprehensive primary care for people of all ages and medical conditions. It is a way for a physician-led medical practice, chosen by the patient, to integrate health care services for that patient who confronts a complex and confusing health care system.

I’m already doing that. In fact, I’ve written about this before, and my conclusion stands: the goal of the PCMH is to make a large group practice function like a solo physician’s office TO THE PATIENT. Think about it: same day appointments? Check. See the doctor you want when you want? Check. (I’m the only doc in the office.) Friendly one-on-one staff who know who you are when you call? Check. Much of the rest of it is by definition impossible to implement in a solo office (Team meetings? Leadership training? “Roles and responsibilities that are stimulating and rewarding”?) Some of it makes no sense at all. (“Budgeting for forecasting and management decisions”? What does that even mean??)

What’s lost in the push to get bigger are the considerable advantages of being smaller:

  • Business flexibility
  • Lower absolute overhead (smaller space; fewer supplies)
  • Patient (ie, customer) service

You know; all the good things that make both patients and doctors happy.

So let everyone else go ahead and merge into one enormous, ever-expanding group practice — sort of like mercury coalescing (cue T-2) — until the entire country is nothing more than one huge provider network. I’ll be off on my own, where my micropracticing colleagues and I will be quietly caring for patients the old-fashioned way: one at a time. Oh wait: that’s the only way they can be cared for, whatever the wonks say. They’ll be healthy and I’ll be happy. What more can anyone ask?

 


Responses

  1. I hate those big corporate practices so when I had to find a new doctor, I choose a solo practice doc and couldn’t be happier.

    What puzzles me is that there is a similar push to get psychotherapists to move into bigger and bigger practices. Now in reality the only supplies a therapist needs are 2 chairs, a box of Kleenex and a telephone, group practices defi Italy do not offer economy of scale. My calendar app works for scheduling and there are easy apps for record keeping and billing without adding to my overhead. I keep thinking that maybe the real purpose for these big group practices is to make control of the practioners easier. But hat would be paranoid of me, right? Right?

  2. Nah, not paranoid at all. That IS what a lot of this is about. It is also, make no mistake, what the forced march to EMR is about, too.

  3. [...] Bigger and Smaller by Lucy E. Hornstein [...]

  4. I would add one more item to you list ” you built it”.

  5. You’re talking about a model similar to that touted by Jay Parkinson’s practice Hello Health. I”ve wondered how that model has been working since he started it some time ago. Sounds like you’ve come up with a similar model all on your own. You’re no dino, Dino. Your cutting edge!

  6. Great post.

    Actually, the REAL goal of the PCMH is to make small practices as inefficient and administratively top-heavy as large ones.

    That the AAFP is pushing this misbegotten style of practice management so aggressively, while refusing to address the issue of pay discrepancy between small and large groups, is proof that our professional society is voluntarily collaborating with large insurers to kill private practice.

  7. All true. AAFP is also useless.

  8. Excellent article. My local two hospital have been on a three year buying spree. Each 50 member group lost money last year and had a 70% overhead. Initially the guaranteed salary looked great, but this year salaries were frozen and promised bonuses were cx. My overhead is low and the cost to the patient is lower in my solo practice. It is rewarding to build a practice and to deal directly with the patients.

  9. As always, a clear gem, especially, sadly the PCMH concept.

    Two thoughts:

    1) Instead of noneconomics of scale, I call it (I think others have too) called it “ineconomies of scale,” ie, the improved efficiency dollars on the table are eaten up by the added costs of additional administration and infrastructure.

    2) Some have said that the idea of PCMH is to make “big practices function more like small/solo practices.”

    Go figure that one!

    Dr Matt Levin
    Formerly of Jeffersonville/Norristown PA.
    In Western PA, solo practice since 2004
    Monroeville, PA


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