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Article updated: 4/29/2013 11:14 AM

Doctors with solo practices face uncertain future

By

Ted Hole knows he's a dinosaur.

In an age of electronic records, the 63-year-old family-practice doctor tracks hundreds of patients by using paper files that layer shelves and weigh down filing cabinets.

Doctors in the large health care systems that may be the future of medicine employ administrators to deal with an avalanche of federal regulations and insurance mandates. Hole tapes a paper note to walls. "No injections on same day as visit," it reads.

At a time when solo-practice doctors face odds that would scare an inveterate gambler, Hole is more solo than most. On days when his only employee -- a nurse who has worked with him for 30 years -- is out, Hole answers the phone. But it won't stop ringing. Patients are waiting. Insurance companies need paperwork. So Hole offers a white lie.

He tells callers the doctor can't come to the phone. He's too busy.

More than half of the nation's doctors worked in solo or independent practices 13 years ago, according to estimates from the Accenture consulting firm. The consultants predict that number will fall to 36 percent by the end of this year, with the decline driven by the cost of running a business.

A 2012 survey from the Association of American Medical Colleges showed that 1 in 100 of the nation's medical-school graduates planned a solo-practice career. More than 6 in 10 wanted to work in medical groups, in partnerships with hospitals or at a university.

Some observers contend solo doctors will survive. They say the old-school physicians who pride themselves on medical autonomy and their bond with patients will find ways to deal with administrative burdens, federal reform and changes in the way they're paid.

Others say the tar pits are waiting.

"They don't have a future, not in the new health care paradigm," said Jim Lott, executive vice president of the Hospital Association of Southern California. He contends that the only private-practice doctors who will survive are those who partner with hospitals and medical groups or reject insurance altogether and accept cash only.

"The others are just in denial and have their heads in the sand," he said.

Hole's office in Ventura, Calif., is decorated with muted blue wallpaper. It hasn't changed since he took over the office 21 years ago.

Every morning, Hole arrives at 7 to do paperwork. He calls it "parasitic drag" as part of a rant against insurance companies and nonstop government regulation.

Years ago, he would make hospital rounds every morning to see his patients. Reductions in insurance reimbursement for hospital care and the reliance of hospitals on their own doctors curtailed that practice. Now his practice revolves around his office. When his patients call, they don't need to use their names. Hole has treated some of them for so long that he knows their voices.

Marlene Reinhart, who is 81, has been seeing him since 1992. She remembers how he met her at the hospital when nerve problems in her mouth made her feel as if her head was going to explode.

"He came when I needed him," she said, trying to explain how well they know each other. "He can tell when I'm feeling low about something. He can tell when I'm elated about something. He can read me."

Reimbursements already have been pushed down by large companies that control the insurance market and send patients to medical practices. The Affordable Care Act provides incentives for doctors to join new networks in which they work in sync with other doctors, hospitals and insurance companies.

Bonuses are paid when the organizations reach goals for improving quality of care and reducing health care costs, which increase with unnecessary care and hospital visits. The concept is that though doctors may make less initially, the bonuses will offset the loss.

The government is also paying as much as $63,750 over six years to doctors who have installed high-priced computer systems and are meeting government standards for using electronic medical records. But a price that can reach into five figures or higher and a transition that can cost practices more money scare away many solo doctors.

Other pressures include the rising administrative burden of running a business and the availability of jobs in medical groups in which doctors have time to lead lives outside work.

"It's kind of like the perfect storm," said Troy Fowler, of the Merritt Hawkins physician-recruiting firm. "Many physicians are saying, 'I'm seeing more patients than I ever did. I'm working longer hours and making less money.'"

Extinction is not a foregone conclusion. Dylan Roby, a health-policy professor at UCLA, noted that solo-practice doctors have been adapting to changes in insurance and reimbursement for 20 years.

They will survive by joining loosely formed networks that allow them to integrate with hospitals and specialists but maintain some autonomy, Roby said. He predicted others will form concierge practices where patients pay for care not through insurance coverage, but through regularly paid membership fees.

"I don't think private-practice doctors will have to go away," he said. "I just think they'll have to adapt."

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