Small Practices Can Prosper in Era of Consolidation

September 19, 2016 04:13 pm Michael Laff

AAFP Board Chair Robert Wergin, M.D., of Milford, Neb., a strong advocate for small physician practices, consults with a patient at the 20-bed critical access hospital where he is employed.

Although the number of large physician practices is growing, the choice of whether to care for patients in a small or a large practice remains in the hands of individual physicians.

According to a recent report,(content.healthaffairs.org) the number of practices with nine or fewer physicians declined from 40 percent in 2013 to 35 percent in 2015; at the same time, the number of practices with 100 or more physicians increased from 30 percent to 35 percent. Authors of the study report, which was published in the September issue of Health Affairs, noted that because they analyzed information from Medicare's Physician Compare data set, their findings may not be representative of physicians who do not treat Medicare patients, such as many pediatricians and other subspecialists.

That same study found that in 2013, 22.5 percent of physicians overall were in one- or two-physician practices; two years later, that figure had dropped to 19.8 percent. The proportion of practices with three to nine physicians declined from 17.6 percent to 15.5 percent during the same period.

Story Highlights
  • According to one rural, small-practice physician, resources are available for small practices to thrive.
  • CMS developed the Transforming Clinical Practice Initiative that creates a state-by-state peer learning network to assist small practices with improving the overall quality of care in partnership with other practices and institutions.
  • Small practices are well-positioned to succeed in the new era because of their longstanding relationships with patients.

Despite those data, which the Health Affairs researchers found to be more prevalent among primary care physicians than among subspecialists, a survey of 10,888 family physicians showed that more than 50 percent were in practices with five or fewer physicians. That's according to a report(www.annfammed.org) published in the January/February issue of the Annals of Family Medicine that used data gathered from family physicians planning to sit for what is now the American Board of Family Medicine's Family Medicine Certification examination in 2013.

A Small-practice Physician's Perspective

AAFP Board Chair Robert Wergin, M.D., of Milford, Neb., who is a rural, small-practice physician, notes that plenty of resources are available to help small practices thrive. Wergin has received multiple offers to merge or sell his practice but he declines them all. He points out that studies indicate small practices are well-positioned to reduce costs and achieve higher quality.

"I like the autonomy of a small practice and the focus on an individual patient and care delivery one patient at a time," Wergin said.

He said he thinks that as a small-practice physician, he has more freedom to make decisions about patient care, such as sending a patient who needs a procedure to repair an aortic valve to a specific hospital with a low mortality rate. That option might not be available in a large practice that requires all referrals to be within a clinical integrated network.

Wergin notes that small practices may have to provide information to insurers about certain procedures they perform. For instance, an insurance company may not want to reimburse him for prescribing and administering a spinal narcotic to a patient in labor to relieve her pain, arguing that he should order epidural injections from an anesthesiologist. But that would be little comfort for a patient in an area where an anesthesiologist is an hour away, Wergin counters. For a patient involved in a vehicle accident, he may insert a chest tube himself rather than wait for a subspecialist.

One health analyst noted that small practices are particularly well-positioned to succeed in the new era of value-based care because of their longstanding relationships with patients, although they may lack ability to make big investments, the time to juggle new regulations and the technical expertise to manage data analysis.

"In an era of value-based care, the autonomy of small practices and the preservation of the traditional doctor-patient relationship helps provide important reassurance to the patient that the physician is acting in his or her best interests," wrote Farzad Mostashari, M.D., in an editorial(www.annfammed.org) in the January/February issue of the Annals of Family Medicine.

Resources for Small Practices

A number of resources are available to help small practices adjust to value-based payment, which is important when just two high-cost patients in a 1,500-patient panel could negatively affect quality scores. For instance, Wergin suggests that smaller practices consider working as "virtual groups" and cooperating remotely until they acquire a panel of 5,000 or 10,000 patients.

CMS developed the Transforming Clinical Practice Initiative(innovation.cms.gov) to create a state-by-state peer learning network to help small practices improve the overall quality of care in partnership with other practices and institutions.

"Even Medicare recognizes that the survival of small practices is important," Wergin said.

Wergin is part of the South East Rural Physicians Association, a group of 100 physicians in Nebraska that meets regularly to share a mutual understanding of how to provide the best care with limited resources. He is employed by a 20-bed critical-access hospital, which is as large as he wants to go.

Rather than study balance sheets, compare technology systems or calculate incentive payments, family physicians need to make a decision about practice size based on how they want to work, Wergin said.

"I think the important issue for small practices is that you have options and you will find that you are not alone," he said. "You can stay in a small practice, and there is support to do it."


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