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Necessary and Sufficient: The Business of Medical Private Practice

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Post By Danielle Schroth

October 25, 2016

When medical students graduate, the last thing many are thinking about are the economics and logistics of starting a private practice. After all, they went to medical school, not business school. But something is definitely afoot when the rate of physicians in private practice goes on a sharp decline.

Our most recent survey on business issues facing doctors documented many of them saying they just didn’t know what they were getting into or how to go about the business of healthcare. We surveyed 318 InCrowd physicians, across specialties, in August 2016 to get a sense of their comfort level and experience when it comes to the business of medicine. This is part of an ongoing series of surveys we’ve been conducting with our HCP network on topics that are impacting their profession, like the Affordable Care Act and physician burnout.

With each survey, the trends are clear: physicians are lamenting the increased emphasis on aspects of their job for which they feel they have not been effectively trained.

Put another way, with different data from The Physicians Foundation: In 2014, only 17 percent of physicians indicated that they are in solo practice, down from 25 percent in 2012. In 2014, only 35 percent of physicians describe themselves as independent practice owners, down from 49 percent in 2012 and 62 percent in 2008. Fifty-three percent of respondents describe themselves as employees of a hospital or medical group, up from 44 percent in 2012 and 38 percent in 2008.

An overwhelming number of physicians told us that they felt they were at least “sufficient” when it comes to their knowledge of the business side of healthcare. This group was confident about the business-side of their healthcare practice, and nearly 90 percent said they had gotten to this level after years of on-the-job training.

On the other hand, a much smaller number–just 18 percent–said they felt they had insufficient education on running a private practice or the business and economics of healthcare.

“No training. Not informed enough by the hospital administration.”  – Pain management, CA 18 years in practice.

The two biggest areas physicians felt they needed extended tutelage were in the financial aspects of healthcare (ASCO, fee for service etc.) and actual day-to-day business management and administrative duties. Both of these items came up during our physician burnout research as headaches and additions to an already burdensome workload.

On-the-job training takes a lot of factors that can be hard to come by: time, mentors, proper systems, etc. This means that not everyone gets it, or gets it right. Physicians in our survey agreed that medical schools should incorporate business education into the curriculum.

Finally we asked our respondents: How has the business and economics of running a practice affected your career and your ability to provide quality patient care?

The top response was it has made practicing medicine less enjoyable overall, especially when combined with the constant change in regulations that leave them playing a game of catch up. One physician summed up with this sentiment:

 “It has slowed the delivery of care requiring frequent prior authorizations for procedures and medications, taking up an enormous amount of time and effort for both staff and physicians.” –Anesthesiologist, OH 24 years in practice

How do we provide the proper tools and education so physicians can successfully navigate running a private practice? Like everything complicated, there is no silver bullet. InCrowd will continue to gather valuable insight from our crowd of HCP experts on report back on our findings.

 

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