Decades ago, doctors finished their medical training, hung up their shingle and started practicing medicine. Today, there are many practice arrangements available, from hospital-employed to partnerships to solo practice. Doctors can get paid salaries or incentive bonuses or fee for service. However, according to the AMA, the trend for doctors staying in private practices has been steadily declining. In 2018, an estimated 54% of doctors were working in their own practices. That number dropped to 49% in 2020. While no statistics are available for 2022, many doctors further left private practice due to the strain the COVID-19 pandemic placed on them.

Why Are Doctors Choosing to Leave Private Practice?

  • Declining Reimbursements. In the past, doctors were able to negotiate their fees with insurance companies and reach a compromise that both parties found acceptable. This is no longer true; Insurance companies dictate what is a reasonable fee to pay, and as a doctor, you have to accept it if you want to be contracted with that insurance company. Additionally, they can change their fees whenever they want, as long as they provide you notice. Typically, when this happens, the fees are set lower. Most of us in private practice haven’t seen a fee increase in more than a decade. Yet, the cost of living continues to rise. Additionally, insurance companies can preemptively decide to drop doctors from their panels for no apparent reason. They’ve been known to do this without notifying the doctor or patients.
  • Increased Regulatory Burden. During the past several years, doctors have been asked to do more to remain compliant with new regulations, from meaningful use to quality incentive programs. All these regulations come with mounds of metrics reporting and data collection (previously known as paperwork). While our reimbursements are declining, a portion of what we get paid is being tied to these metrics. We are doing much more meaningless (yes, doctors would rather be spending the extra time treating patients) work for less money.
  • Insurance Company Hassles. These days, most insurance companies require prior-authorizations for many services. Doctors and their staff are the ones tasked with doing this additional work, often with unsatisfactory results. Doctors have to prove, beyond a shadow of a doubt, that a patient needs a given service in order for the insurance company to approve it. Doctors no longer get to order the tests and medications they think the patient needs. Insurance companies will tell you that they are not practicing medicine, merely making coverage determinations. However, when medical care is unaffordable for patients, they are preventing patients from getting the services they need. So, yes, they are making medical decisions and often delaying diagnosis and treatment. They will tell you that you can appeal their decision, but they will then tell you to wait 90 days for a response. To further complicate matters, generic medications are no longer routinely covered. Many of them, such as asthma inhalers and insulin, now need prior authorizations. Dealing with these hassles alone can make many doctors want to quit. We’re not able to afford staff just to deal with prior authorizations.
  • Losing Staff to the Competition. Doctors in private practice cannot afford to offer our staff the same salary and benefits as a large organization or hospital. We lose many good employees to these places. This is one of the biggest struggles in running a practice: finding and retaining good staff. Thinking of someone else taking over the burden can entice many to rethink their practice model.
  • More Complicated Patients. The population is aging, and as people live longer, they do so with more chronic medical conditions. While this by itself is not a problem—because we’re there to take care of these medical issues—it requires more time in the exam room. We don’t have this time, because we need to keep our businesses afloat. In order to do so, we must have a positive income stream, adhere to government and insurance company regulations, and fill out the endless flow of FMLA forms that are now coming in due to COVID-19 and long-COVID. We need to do more and more in less and less time. It just doesn’t work.
  • The COVID-19 Pandemic. Those of us in private practice were pretty much on our own as the pandemic hit. I know two outpatient doctors in my area who died early in the pandemic due to COVID-19. We had no one telling us guidelines of how to protect ourselves. We don’t have negative pressure rooms or appropriate PPE like they do in many hospitals. We just did our best. Despite that, many patients died and others were scared to be seen in the practice. Our volume went down for a while. And when the patients did start coming back, we had to keep them physically distanced and sanitize everything between patients. We had to cut down how many patients we treat for these reasons. And as said above, we need volume to pay our bills. Of course, there is always telemedicine, some will counter. However, telemedicine visits aren’t reimbursed at the same rate as in-person visits and then you have to either lay off your staff who will look for jobs elsewhere or keep paying them from money that is not coming in.

There are many reasons doctors are choosing to leave private practice. In the short-term, it may be a good thing. Doctors are burned out like never before and having someone taking over the administrative burden may help. However, I fear what will happen to the healthcare system when insurance companies have free reign and hospitals/large organizations are making guidelines for patient care. No one will care for patients like a solo doctor will. My patients are like my family. I care that they all live and are healthy. Will a hospital CEO? Or will they become just a number? Private practice may be in the decline, but we never needed caring people more.