Independent Physicians Keep Healthcare Costs Low, Provide Great Care and Improve Patient Satisfaction

Kareo and Independent Physicians Respond to Kocher Editorial in Wall Street Journal with an “Amen!”

In an op-ed piece in the Wall Street Journal on July 31 titled “How I Was Wrong About ObamaCare,” Bob Kocher, a former member of the Obama White House and adviser to the president on health-care policy, stated, “What I know now, though, is that having every provider in health care ‘owned’ by a single organization is more likely to be a barrier to better care.” Responding to the op-ed piece, the nation’s leading provider of clinical and business management software to independent practices has this to say. “All over the country, we hear our customers saying, ‘Amen’ to Bob’s realization,” said Dan Rodrigues, founder and CEO of Kareo. “The facts are telling.”

Rodrigues went on to quote a number of timely statistics:

  • J. Michael McWilliams, Warren Alpert Associate Professor of Health Care Policy at Harvard Medical School and lead author of the study that Bob Kocher referenced in his article, stated, “Some have presumed that forming a large hospital system that owns a lot of outpatient practices is a prerequisite for Accountable Care Organization success,” McWilliams said. “We do not find this to be the case.” One reason for this finding, the authors note, is that independent physician groups have stronger incentives to prevent hospitalizations than hospital-owned groups. (Harvard Medical, April 13, 2016)
  • According to data presented in an article in Health Affairs in Sept 2014, independent practices reduce avoidable hospitalizations by 33%.
  • A study by JAMA in 2014 illustrated a substantial difference in mean costs for services provided by independent doctors, hospital-owned doctors and multi-hospital-owned doctors. The study highlighted that costs with hospital-owned doctors increased by 40% while costs with multi-hospital-owned doctors increased by 56%.
  • According to a 2015 study by the American Medical Association, “The majority (60.7%) of physicians were in small practices of 10 or fewer physicians, and that practice size changed very little between 2012 and 2014 in the face of profound structural reforms to health care delivery,” said AMA President-elect Andrew W. Gurman, M.D.
  • In addition, the AMA study suggested that the movement of independent physicians to hospital employees has been minimal:
    • The share of physicians who were practice owners decreased from 53.2% to 50.8%
    • The share of physicians who were in solo practice decreased 18.4% to 17.1%
    • The share of physicians who were directly employed by a hospital increased from 5.6% to 7.2%

These statistics are in sharp contrast to predictions suggested by another prominent study.

Independent physicians are increasingly aware that, while significant challenges exist for independent practices, there is a new optimism as helpful technology is allowing practices to succeed at costs much lower than in the past.

According to Scott Mayer, MD, Today Clinic, “My experience has been that the bureaucracies of hospital-owned practices decrease provider autonomy and the ability to quickly adapt to the ongoing changes in healthcare decreases as well in my opinion. Our current healthcare status has made it increasingly difficult to maintain a private practice, but just like small business is where most innovation comes from, private practice is where I believe the most creative, flexible and innovative healthcare will always come from.”

Rodrigues added, “As a company serving independent practices, our observation is that the nation is actually going into the golden age of private practice, with small offices and groups doing precisely what Dr. Mayer stated. They’re taking advantage of innovations in technology and adapting their business model to offer patients new opportunities and better care. We are also thrilled to report that 15 percent of our new customers are newly launched practices. We’re seeing these new practices being opened by physicians who are prepared to improve quality of care, keep costs down and operate successfully with a level of freedom unavailable to their employed peers.”