The vanishing act of solo practice

Healthcare delivery in the United States has undergone an amazing change over the past 30-40 years. In the mid-1980s more than 50% of physicians were in independent solo practice. By 2017 that number had fallen to only 36%. Where did all of these physicians go? In 2004, only 11% of physicians were hospital-based; by 2012 that number had risen to 65%, and it has been estimated that by 2019 75% of all newly hired physicians will be hospital employees.

Meanwhile, in 1983 only 5% of physicians practiced in groups of 25 or more physicians; by 2014, that number had increased to 20%. This is clear evidence that physicians in independent solo practice are becoming a threatened species.

What is responsible for this dramatic shift in how Americans receive their medical care? Young physicians are 2.5 times less likely to be in solo practice than older physicians, and are less likely to replace older physicians as they retire or die. This may be due to the more predictable income and better work-life balance offered by group practices.

Younger physicians also generally have less interest in the business aspects of medicine and typically lack the entrepreneurial drive that is required to manage a successful solo private practice. In addition, being a member of a group conveys greater strength when negotiating with third party carriers.

With the passage of MACRA (Medicare Access and CHIP Reauthorization Act) in 2015, physician payment changed from rewarding volume to rewarding value. That Act coupled with MIPS (Merit-Based Incentive Payment System) and CMS Quality

Development Plan (CMS MDP) increased the burden of documentation and additional administrative costs for the infrastructure needed to collect, manage and report data to prove that one’s practice provides efficient, effective, high quality integrated care at appropriate cost. From all of these increased governmental regulations it would seem apparent that these requirements might be better managed from a group practice setting with its economies of scale rather than from a solo practice.

Options to stay solo

Apart from the obvious solution of joining a group practice or selling to a hospital to become an employee, what is a solo practitioner going to do?

In some cases, hiring a trained mid-level provider as associates can increase patient revenue without significantly increasing cost. For those solo practitioners who are located in affluent communities where patients are willing to pay out of pocket for greater access, a growing option is to convert to a “concierge” medical practice (also known as “retainer,” “boutique” or “membership” medicine).

In these types of practices an annual fee ensures same day service, 24/7 telephone access to the physician and enhanced appointments of longer duration.

While I was aware of these types of practices for internal medicine and family practice, I was surprised to learn of their existence in the specialty of dermatology. I was able to find concierge dermatologic practices in six medium and large cities around the United States with little difficulty, including even one here in Tucson run by a board-certified dermatologist who operates a mobile service and is willing to “come to your office or home” for an appointment! Suffice it to say, healthcare is being delivered in a very different environment from that of our predecessors. Not only do we have more bureaucratic hoops to jump through, we still must provide the highest quality of care possible in the face of decreasing reimbursement and increasing documentation burdens.

If the benefits of being in solo practice (ie, independence and freedom) are greater than the many hassles described above, it is still possible for the solo dermatologist to be successful since we are not generally reliant on hospital affiliations or other physicians for patient referrals. It may require more effort and flexibility to adapt to this evolving environment of healthcare, but solo practice is here to stay!