From the growing influence of private equity and consolidation to the erosion of autonomy, 13 physicians and healthcare leaders connected with Becker's to discuss the biggest issues threatening physicians.
Editor's note: These responses were edited lightly for clarity and length.
Ernest Braxton, MD. Spine and Neurological Surgery Specialist at Vail-Summit Orthopaedics and Neurosurgery (Vail, Colo.): The healthcare landscape is witnessing a significant shift with the growing influence of private equity in private practice. Private equity firms have been increasingly investing in physician practices, driven by the potential for profit and market consolidation. While this trend can offer financial resources and operational support to struggling practices, it also poses several threats to physicians and patient care. One major concern is the prioritization of profit over patient care. Private equity investors typically aim to maximize returns on their investments, which can sometimes lead to cost-cutting measures, increased patient volumes, and pressure to prioritize revenue-generating services over comprehensive care. This can compromise the quality of care provided to patients and strain physician-patient relationships.
Physicians may face pressure to meet financial targets or adhere to corporate protocols that may not align with their professional values or the best interests of their patients. Additionally, there is a risk of loss of physician autonomy, as decision-making authority may shift from clinicians to corporate executives focused on financial outcomes. Private equity ownership can indeed make it challenging to recruit new physicians after the sale of a practice. One reason is the loss of autonomy and control that physicians may perceive under private equity ownership. Potential recruits may be wary of joining a practice where decision-making authority lies with corporate executives and potential financial upside is limited. In general, private equity firms generally meet their financial targets, physicians must be vigilant to ensure these goals don't come at the expense of quality care or physician income.
Adam Bruggeman, MD. Orthopedic Surgeon at Texas Spine Care Center (San Antonio): The biggest threat physicians are facing is the financial uncertainty of the practice of medicine. Without consistent payment updates and with continuing administrative burden, physicians are struggling to reinvest in their practices and communities with confidence. This has led to an erosion of the private practice of medicine.
Kenneth Candido, MD. CEO and President of Chicago Anesthesia Associates. The biggest threat physicians are facing in 2024, and beyond, is loss of autonomy and loss of decision-making in their professional lives. Private practices are being bought up, eliminated or absorbed at an exponential rate. Consolidation of health systems and the corporatization of healthcare is a stark reality of modern American healthcare. Mergers and acquisitions define the hospital world, with fewer freestanding institutions surviving as lone bastions of care. There are now more non-clinical administrators and decision-makers to contend with than ever before. These non-clinical and non-revenue-generating players serve to cannibalize revenue generated by clinicians and services, leaving less resources available for those driving the ships. Furthermore, physician duties are being monitored and scrutinized at an ever increasing rate. Patient care and personalization of the physician-patient relationship has taken a back seat to the pencil pushers and bean counters, to the detriment of many patients. Wait times for needy patients have been increasing, due to the relative lack of incentivization of physicians to bring new patients in, or to maximize and optimize care for those already in their practices. As America pushes forward towards a socialization of healthcare, there are prolonged waiting times for elective surgeries and even routine visits seem to take far longer to accomplish than ever before. It is not unusual for patients seeking care to find their physicians are "booked out" for three months, six months or even longer. Ten years ago this would never have been the case. And while personal insurance premiums borne by patients have been skyrocketing, physician reimbursement has remained stagnant or marginally increasing, leading to lower availability for patients seeking elective procedures and surgeries than ever before, or else seeking to have them accomplished at a discounted rate at free standing surgical centers. These are among the real life challenges and threats facing modern physicians in the United States. Costs continue to climb; patients continue to receive less timely care; and hospital systems continue to profit with huge margins used to pay the explosion of administrators in so many new and advancing role designations and categories. To justify their existence, administrators are continuing to find new mandates; new goals to accomplish; new initiatives to put forth; and are demanding more "meetings" with more participants, to showcase their work. Meanwhile, this distraction away from patient care and patient needs is all justified as a means to the end — that end being the growth of the gluttonous hierarchy top, and an assurance that this can be perpetuated for them and future generations of administrator types.
In the past, a hospital system could be looked upon like a pyramid, with a wide base and narrow top. The base represented all those carrying the weight of the system, including nurses and physicians and ancillary staff. The top of the pyramid could be considered to be the CEO, CMO, CFO and a few directors of services. Now that pyramid is looking more and more like it is inverted, with the narrow peak being on the ground, carrying all the weight, and being represented by the "worker bees" like physicians and nurses, with the mid- and upper-level executives ever expanding towards the top, receiving a greater share of revenue while carrying almost no burden and no risk. At one point, that upside-down pyramid is going to topple over. It is inevitable as a simple law of physics and mathematics. American healthcare is the upside-down pyramid and it is only a matter of time before it will need to be put right side up again.
Harel Deutsch, MD. Co-Director of the RUSH Spine Center (Chicago): I do believe that the current system is working to make physicians more irrelevant. Increasing care is provided by midlevel providers such as NPs and physician assistants. I routinely see charts of patients who have been treated for months or years and not seen a regular physician.
Nitin Khanna, MD. Surgeon at Spine Care Specialists (Munster, Ind.): Insurance reimbursements and pre-authorizations. These abuses need to be addressed by regulators as the insurance companies have been emboldened by legal protections. They are in fact delivering care with denials and the physicians involved should be personally and professionally liable for their denials. From a reimbursement standpoint, inflation has been everywhere from salaries, cost of goods and construction. Government has decided to decrease Medicare reimbursement somehow. Physicians will need to be able to negotiate their rates at a society level to give leverage or simply drop out of insurance that refuses to pay a fair rate.
Bert Mandelbaum, MD. Professor in the Department of Orthopedic Surgery at Cedars-Sinai (Los Angeles): On the whole, the biggest threat to physicians in 2024 is consolidation and integration with private equity, employed relationships and being out leveraged by the payer community. Healthcare at the moment is truly lacking focus as there are so many stakeholders that are leveraging, capitalizing and compromising the professionalism of the doctor-patient relationship. Moreover, the value and importance of physicians has been challenged on all levels. As doctors we must always maintain our mission as stewards of healthcare.
Thomas Pliura, MD. Physician and Attorney (Le Roy, Ill.): In my opinion, the largest threat facing physicians is the fact that large healthcare systems have consolidated the industry and now control the patient base. Large health systems have flooded the market with ancillary providers, including physician assistants and nurse-practitioners. These nonphysician providers are simply revenue centers that are in place to generate revenue for the large health systems. Significant proportion of the nonphysician providers are simply in place to order tests, whether it be imaging studies, lab work or other expensive tests — virtually none of these providers have any in-depth training in medicine. But that is not necessary, for they are employed simply to be revenue centers, order expensive tests without any training or education to interpret the diagnostic studies.
Hospital systems are placing nonphysician providers into a variety of specialty positions, so a nonphysician provider who enrolled into a family practice training program, and completed a great majority of their studies online, these people are placed into specialty positions including cardiology, gastroenterology and neurosurgery. A licensed physician [historically] would train in family practice and would never be allowed to hold himself out as a cardiologist, but the public is being deceived. The threat to physicians is clear. The available patient base continues to shrink as these large hospital systems gobble up patients through their networks of nonphysician providers.
Scott Russo, PhD. Professor of Neuroscience and Director of the Center for Affective Neuroscience at Icahn School of Medicine (New York City):
A) The need for greater physician leadership in healthcare on a federal level and in running large healthcare systems and major companies supporting them.
B) Diminishing reimbursement and rising costs like healthcare insurance.
C) Physicians leaving practice management up to the businesspeople and ignoring the day-to-day operations.
D) Poorly running revenue cycle operations.
E) Ignoring or suppressing the entrepreneurial mindset of the honest and honorable physician by health systems and professional organizations.
Kristopher Schroeder, MD. Professor of the Department of Anesthesiology at University of Wisconsin School of Medicine and Public Health (Madison): Physicians currently face a variety of obstacles that threaten their well-being, career longevity and ability to care for their patients, families and themselves. I think what represents the most pressing concern likely depends on the individual, their value and season of life. There are some constants that will be with physicians throughout their careers and serve as a continuous barrier to wellness — adverse outcomes, administrative bureaucracies, charting and how money occasionally dictates the practice of medicine. There are threats on the horizon (i.e., scope of practice and artificial intelligence) that certainly represent a source of angst and, in some cases, may legitimately threaten medical specialties. For those just launching a career, the combined stressors associated with debt and the pull of a family and young children waiting at home can be incredibly challenging. For those sandwiched in the middle, there can be difficulties associated with assuming leadership positions and balancing the realities of budgetary and staffing restrictions while simultaneously attempting to navigate the demands of clinical medicine and serve the healthcare professionals they are tasked to lead. As faculty approach the twilight of their careers, developing a meaning and purpose outside of medicine might seem incredibly daunting and the years spent focusing exclusively on medicine may leave them feeling bitter and underappreciated.
Matthew Searles. Partner at Merritt Healthcare Advisors: Consolidation of smaller physician groups into larger entities has been a positive for the industry and has combated the continual margin compression that has threatened private practices for the last 20 years. However, we now see many government regulators targeting these arrangements, which is a threat to the viability of independent practices. Regulators are rightly concerned over cost to consumers, but they need to be careful not to impede much needed reform of how private practices are run. Without scale and investment in technology to go at risk and move away from fee for service, physicians cannot thrive. Scale and technology are impossible to achieve on a small scale.
Khawar Siddique, MD. Co-CEO of DOCS Health (Los Angeles): A race to the bottom that was started by the insurers. It's now common for insurers to offer 80% of Medicare rates for in-network physicians, which makes it financially impossible to maintain a private practice. Ironically, by driving physicians into a salaried or group practice, insurers are worsening their negotiating power. Unfortunately, insurers don't recognize this irony.
Vladimir Sinkov, MD. Surgeon at Sinkov Spine (Las Vegas): Physicians face many threats in 2024, which are the same threats that they have been facing for the past many years, such as increased administrative burdens imposed by the government, private payers and hospital administrators; decreasing reimbursement for medical services; loss of clinical autonomy that comes with employment and practice consolidations; and ever-present threat of frivolous malpractice lawsuits. The biggest threat to physicians, however, are physicians themselves. They are the ones who voluntarily sign bad insurance contracts, agree to accept ever-decreasing Medicare reimbursements and give up their private practice autonomy for the perceived safety of employment. Physicians also frequently chose to compete with each other rather than support each to face these threats as a united front. If the majority of physicians decide to stop letting others dictate how we should practice and how much we should get paid for it, then most of these threats will disappear and we will be able to provide better care for our patients and maintain our independence and financial stability.
Leigh Wilson. Former Manager of a neurotology practice in Portland, Ore.: Large healthcare organizations are making decisions based on income and profitability rather than the needs of the patient and the quality of healthcare. Incomes such as $7.1 million with a bonus of $6.1 million is paid to the CEO of one of our largest not-for-profit healthcare organizations. The president of one of our largest insurers, Regency Blue Cross of Oregon, averages over $900,000 in compensation. Reported is that in 2022, the CEOs of the top 10 health payers in Oregon combined received between $13 million and $22 million in total compensation, including salary, bonuses and other pay.
Physicians as service providers are diminishing as PAs and MAs are taking on more of the work at a lesser salary. The value of the physician's residency training, fellowships, years of expertise is becoming less valued for less expensive, less compensated providers. Physicians in training are not going into family care or general practice due to low reimbursement per hour.
Regulations of documentation and Medicare exams for payment cause the physician to be paper-bound rather than patient-focused. In observation, the physician is getting moved aside to increase corporate income as well as federal reimbursement is decreasing for increased workload.