After more than a decade of consolidation, independent physician practice remains under pressure, strained by hospital acquisition, payer complexity and the appeal of guaranteed salaries.
But Joshua Siegel, MD, director of orthopaedic sports medicine at Exeter, N.H.-based Access Sports Medicine and Orthopaedics, doesn’t see the shift toward employment as inevitable. He argues that with the right economic and regulatory changes, independence could once again become a durable model across specialties.
Dr. Siegel said the future of private practice hinges on two forces: financial security and payment reform. If independent groups can offer stability comparable to hospital employment and if site-of-service payment gaps continue to narrow, more physicians may begin to view ownership not as a risk, but as an opportunity.
Editor’s note: Responses have been lightly edited for clarity and length.
Question: What needs to happen — either economically or regulatorily — for independent practice to become a broader shift across medicine?
Dr. Joshua Siegel: A lot of it has to do with the main differentiator right now: guaranteed initial pay and salaries. The second is the security of your work. Those two factors are kind of self-feeding. The more an independent practice can be viable in a community, the more security there is for an independent physician entering into it. No one wants to jump into a practice that’s teetering on bankruptcy.
There are tons of other aspects at play — the ability to provide cash services, the ability to increase the number of patients you see, adding resources like medical assistants or PAs, and being as efficient as you can be — versus this big-overhead, hospital-based, corporate way of doing medicine.
I think one of the largest drivers eventually will be site-of-service equalization that’s been talked about for a decade, but it’s finally starting to take hold — where it doesn’t matter where the treatment was: office-based, surgical center-based, hospital outpatient department-based or inpatient. You’re starting to see a narrowing of those payment differentials from insurance companies.
Once that happens, hospitals are either going to lose the ability to provide those services and/or the independent ability to provide them is going to have to go up. There’s no way hospital rates will go down to what independent rates are, and there’s no way they’re going to jack up independent rates without trying to save money on the hospital side. I have a feeling this movement to the middle is going to benefit smaller independent practices, because they’re already profitable — sometimes making half of what hospitals get for the same services.
And you’re seeing that kind of opportunity get captured by smart companies doing functional medicine, Grail tests for biomarkers for cancer, or whole-body MRIs — they’re going direct-to-consumer, getting cash and bypassing insurance. Independent practices can do the same thing. For instance, we have our own MRI. These whole-body MRI companies want places where they can provide services much cheaper. They’re not going to hospitals and saying, “Hey, can we do whole-body scans on your MRIs?” They’re coming to practices like ours. We just put a brand-new, super high-quality scanner in, and, wow, look at this business that materialized.
So in a way, there are these less thought-about benefits of providing high-quality services outside the expense of hospital walls. And that’s ultimately what’s going to drive the security of independent practices — and better payment for independent physicians who enter them relative to what they could do at a hospital.
