The root of disappearing independent practices is not just reimbursement or referral diversion, according to Ahmed Hasan, MD, president of Lehigh (Pa.) Gastroenterology Associates — it starts in medical school.
“When you’re in medical school, they don’t teach doctors how to be businessmen,” Dr. Hasan told Becker’s. “That is why they fail. They come out and they don’t know how to do anything, so they just join a system. And they are never told that you have an option to do independent practice.”
The structural argument is straightforward. Residency programs are based in hospitals and institutions that receive state and federal funding to train graduates. Those programs do not rotate residents through private physician offices.
“Clinician instructors cocooned inside academia have no experience teaching private practice,” Eric Mehlberg, MD, an anesthesiologist at Comprehensive Pain Specialists in Golden, Colo., told Becker’s. “When I was training, there was an implication that those who went into private practice ‘sold out.'”
The result is that physicians complete training having spent years inside a hospital system, never having observed how an independent practice is run, and with no practical understanding of the business decisions that independent practice requires.
“Physicians graduate knowing how to perform physical exams and write notes — but most don’t know how to read a contract, set up a practice or even how billing and reimbursement work,” Benjamin Cooper, DO, a resident physician at Mercy Hospital in New York City, told Becker’s. “Topics like CPT coding, RVUs, superbills, malpractice insurance, Stark law and the Anti-Kickback Statute are essential to practice safely and sustainably, yet they’re often left out of the curriculum.”
According to a 2022 study in the National Library of Medicine, 79% of medical trainees reported below-average understanding of personal finance, despite nearly all agreeing that this education should be an integrated part of their training.
The gap does not close after training. According to Encoda’s “The state of financial health” survey, only 47% of physicians expressed confidence that their current financial reporting accurately identifies issues and financial risks.
The Pennsylvania Medical Society’s independent physician section, formed last year after physicians who had left hospital networks pushed to create it, passed a resolution on this and sent it to all training programs in the state. Medical students should be educated about their options, and residency programs should rotate trainees through private physician offices.
The resolution is a start, but the structural incentives have not changed. Hospitals and health systems that host residency programs have an obvious interest in producing graduates who join employed models. The funding structure that supports graduate medical education runs through those same institutions.
Dr. Hasan’s broader point is about market information as much as curriculum. Physicians who do not know independent practice is viable cannot choose it. The movement in Pennsylvania is trying to change that — not by mandating independent practice, but by making sure graduates understand it exists.
“One of the big pushes from leaders of this movement is that medical schools should tell students: when you come out, you have options,” he said.
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