Political intervention necessary to preserve ‘vanishing’ small independent practices, experts charge

Policymaker intervention may be necessary to preserve “vanishing” independent physician practices, experts charged in a new JAMA [1] opinion piece.

Nearly 80% of  medical doctors now work for hospitals, health systems or other corporate entities. Rising administrative burdens, shifting employment preferences, capital demands for health IT, and financial incentives all are pushing radiologists and other physicians into consolidation, experts noted.

One of the “underappreciated” factors driving docs toward corporate employment is healthcare’s shift to value-based care, health policy experts noted.

“For small independent practices in particular, these payment models require significant support and resources,” attorney Hayden Rooke-Ley, JD, a senior fellow with the American Economic Liberties Project, and co-authors wrote Aug. 22. “The pursuit of the capital investments, analytic tools, technology platforms, and regulatory expertise needed to enter value-based payment models risks further corporate alignment and consolidation. This inadvertent consequence warrants attention as policymakers seek to widen adoption of value-based payment models across the healthcare system.”

Previous studies have shown that independent practices are well-positioned to deliver low-cost, value-based care. But such organizations often lack the required technology infrastructure, population health expertise and relationships with other parts of the healthcare system.

“Thus, intended or not, value-based payment models tend to favor consolidated organizations, which are more likely to have organizational capacity for data collection and monitoring, including analytics, reporting, and patient engagement or outreach,” the authors wrote.

But how can one maintain an independent physician practice without the requisite corporate backing? Private and public insurers could potentially subsidize practices through additional payments, like those granted to rural and critical access hospitals. Medicare might raise physician rates for independent sites of care. Or payers could reduce the threshold of minimum covered beneficiaries needed to participate in value-based models.

“Small independent practices are rapidly vanishing,” the authors concluded. “Value-based payment models, despite their intended benefits, may present a different reality to those remaining independent practices compared with their corporate-consolidated counterparts—most notably as an additional threat to independence in a modern practice landscape. Policy attention is warranted to ensure that efforts to improve the value of care do not unintentionally make independent practices a casualty in this era of payment reform.”

Physicians Zirui Song, MD, PhD, and Jane M. Zhu, MD, with Harvard and Oregon Health and Science University, respectively, also co-authored the piece. Their opinions echo findings from a June Neiman Health Policy Institute study, published in the American Journal of Roentgenology [2]. Between 2015 and 2022, nearly 3,500 physician practices that provide radiology services disappeared from the Medicare Provider Data Log. This included 2,300 groups that operated solely in the specialty.

The authors did not attempt to discern reasons why practices have pursued consolidation. But they speculated that radiologists have sought the safe harbor of larger multispecialty groups as they navigate complex regulatory challenges. Among them are the No Surprises Act and value-based care initiatives under the Permanent Doc Fix of 2015.

“Responding to the incentives created by these laws is facilitated with a larger practice,” radiologist Jay Parikh, MD, a professor at the University of Texas MD Anderson Cancer Center, said at the time. “Accountable care organizations, value-based payment, care coordination, quality improvement rely on EHR capabilities, the costs of which are more readily managed by larger entities.”