Saving independent medical practice is key to keeping US healthcare affordable in the post-COVID19 era

Independent physician practices, for millions of American patients, are the first line of defense in the United States health care system. They keep the patients out of costly emergency departments and in-patient hospitalizations by providing timely preventive care, managing them for actuate and chronic conditions in the outpatient settings, and providing follow-up care.

The immediate economic impact of COVID-19 on physician practices is significant. A recent survey by the Medical Group Management Association reported that, on average, physician practice revenue has decreased by 55 percent, and patient volume has fallen by 60 percent since the beginning of the COVID-19 pandemic. Many of these practices have already laid off and furlough staff and many more are in coming in coming weeks.

Well before the COVID-19 crisis, the physician practices are under extreme pressure for the last few years due to changes in the reimbursement environment and ever-changing reporting requirements from the CMS leading to significant consolidations. Nationally, between July 2012- January 2018, the percentage of hospital-employed physicians increased by more than 70 percent.

Why does this matter?

Because of their pricing power, hospital-employed physician practices charge more than independent physician practices for the same services. On average, Hospital-employed physician practices charge patients $300 more than for comparable care without much improvement in quality outcomes as compared to independent physician practices.

Another recent JAMA study found that shifting the infused chemotherapy services from physician offices to hospital out-patients department is associated with increased spending for chemotherapy services. When a physician is employed by a hospital system, they tend to offer more services—many of them unnecessary and inconsistent with clinical practice guidelnes--as compared to independent physicians.

In contrast, strong independent physician groups, especially those that carry risk for the total cost of care for their patients, often work to keep patients well and avoid costly hospitalizations that represent the single greatest cost line-item in American healthcare.

The long-term effect COVID-19 on independent physician practices remains to be seen; however, failure to support the independence of these practices now will have a ripple effect throughout our healthcare system for years to come.

The recent CARE act allows providers to provide care through telehealth. Many physician practices, like primary care providers, need patients to come to the facility to get reimbursement. However, revenue through telehealth may not be enough to ensure practice viability in a long run.

Closure of these community-based independent physician-practices will reduce access to care and patient satisfaction while increasing the cost of care. In many communities, they are the only source of care. Policies from the government to support independent practices are not enough.

Now is the time for Medicare, Medicaid, and progressive health plans to partner closely with independent physician practices to support their success. Some health plans are providing low interest bridge loans--but they can go farther. Now is the time for health plans that have historically paid physician groups with fee-for-service payments to implement global and professional capitation payment models that pay physicians to be responsible for the total health of the populations they serve.

Physician couple Jillian Fickenscher and Brady Fickenscher runs a private family medicine practice in York, Nebraska. York is a rural county, about 50 miles west of Grand Island in Hall County, an emerging hot-spot for COVID-19 in the last few weeks. The physician couple are concerned about keeping their staff employed.

“While there has been help available from the PPP (Paycheck Protection Program) and CARES act. etc, our patient volume has been down significantly. We’ve had to reduce hours, find additional jobs for nurses and staff to keep their hours up and keep everyone employed while we haven’t been nearly as busy in the outpatient setting.”

Too many in the healthcare industry are asking “how we can get things back to normal” rather than work to use this crisis to create a better, new normal for patients and physicians like the Fickenschers. That new normal involves a rejection of the continued consolidation of hospitals and physician practices and a renewed commitment to keeping independent physician groups independent.



Soumitra Bhuyan, PhD, MPH is an assistant professor at the Bloustein School of Planning and Public Policy at Rutgers University.

Jay Bhatt, DO, MPH is an Aspen Health Innovator Fellow of the Aspen Institute.

Sachin H. Jain, MD, MBA is Adjunct Professor of Medicine at the Stanford University School of Medicine and recently stepped down as CEO of CareMore Health.

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