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Fewer Doctors Have Ownership Stake In Their Practices

Less than half of “patient care” physicians have an ownership stake in their practices as doctors go to work for somebody else amid unprecedented healthcare industry consolidation, Forbes writes.

A new analysis from the American Medical Association is a good sign for those like UnitedHealth Group’s Optum health services business and hospital operators like HCA Holdings Tenet Healthcare and large nonprofit health systems. These larger systems are buying more physician practices, particularly primary and ambulatory surgical care providers.

More doctors are taking jobs or selling their practices to larger entities to gain leverage against insurance companies who pay them.

Physicians also find its more difficult to access capital without the help of a larger partner to fund investments in necessary health information technology needed to comply with the coming quality measures under the Medicare Access and CHIP Reauthorization Act of 2015, also known as MACRA.

The share of “patient care” physicians with an ownership stake in their practices dipped to 47% in 2016 compared to 53.2% in 2012, the AMA’s analysis on practice arrangements shows. Meanwhile, the share of employed physicians jumped to 47% in 2016 from 41.8% in 2012.

AMA data mirrors reports from physician staffing and recruitment firms showing a dramatic change in doctor employment, particularly among younger doctors coming out of residencies.

 

“We have watched employment trends of physicians grow exponentially over the years, especially within the past five to seven years, as placement rates of employed physicians have skyrocketed and placement rates of physicians into private practice settings have declined,” said Andrea Clement, spokeswoman for The Medicus Firm, a national recruiting firm since 2001.

Almost 65%, of doctors under age 40 were employees in 2016.

That compares to 51% in 2012, the AMA report said.

Also driving the move to employment is the shift from fee-for-service medicine to value-based care that bases payment on outcomes and the quality of care delivered. Increasingly, doctors find themselves joining larger entities as a team-based approach takes hold in the U.S. healthcare system.

“In order to be paid, to comply with quality measures and to compete for large patient populations, physicians today are almost compelled to embrace the employed model,” says Mark Smith, president of MerrittHawkins, a physician staffing company and part of AMN Healthcare.

“The truly independent physician who does his or her own hiring, owns or leases the practice’s equipment and building and is responsible for balancing the book is an anachronism.”

 

Fewer Doctors Have Ownership Stake In Their Practices - overview

Summary: Less than half of “patient care” physicians have an ownership stake in their practices as doctors go to work for somebody else amid unprecedented healthcare industry consolidation.

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