Physician business models, physician shortage - Primary Care: In Search of a Sustainable Business Model

President-elect Barack Obama placed a heavy bet last week that the recession-wracked economy he is about to inherit has finally reached a tipping point on health care… Mr. Obama has begun a careful campaign to frame the issue more as a pocketbook concern more than a moral one.

Kevin Sack, “Necessary Medicine? Health Care and The Economy Share a Sickbed. Maybe They Can Recover Together, “ New York Times, December 14, 2008

Root Cause

Universal coverage without access to primary care doctors is meaningless, and there is a grave and growing shortage of these practitioners, estimated to reach 35,000 to 40,000 by 2020.

The root cause of primary care shortages in America is lack of a visible and sustainable business model to attract and keep primary care doctors in practice.
There is no mystery to these shortages. Why should medical students or experienced physicians enter or stay in primary care, a field promising lower pay, longer hours, more work, more stressful life styles, less ability to pay off educational debts, a wider variety of knowledge to master, and less latitude to do the right things for patients – spending time with them, responding to their urgent needs, and communicating the basics of prevention and good health – than specialty care.

Broad Primary Care Base

Yet it is becoming clearly and increasingly evident that a broad primary care base is the common denominator for an efficient, cost-effective, a health-producing, disease-avoiding health system in the U.S. and around the world.

This reality poses a harsh dilemma not only for recruiting and retaining primary practitioners but for developing cost-sustainable national health systems and expanding coverage for aging populations in an era of recession, contraction, unemployment, and economic deprivation.

Ultimate Answers

What are the ultimate answers to the primary care shortfall? If I knew that, I would be a candidate for a combined Nobel Prize in Medicine and Economics. Here are a few evolving development that may offer incremental solutions.

• Government and organized medicine payment reform (read the latter as a new coding system by the reimbursement updating committee of the AMA) that spills over into Medicare, Medicaid, and health plan payments.

• Government subsidies and incentives that ease educational debt for primary care candidates, reward care for primary care in underserved areas, and offer more extensive support of primary care residency slots.

• Federal, state, and health plan support of medical homes with adequate payments for creating these homes and lowering of bureaucratic barriers for physicians wishing to create medical homes.


• Realistic rising of fees for care of Medicare and Medicaid populations to more closely approximate private fees and to end cost shifting now required maintaining viable practices and hospitals.

• More innovative and sustainable primary care business models , such as,

1. IPAs featuring cost sharing and gain sharing between hospitals and doctor groups that offer bundled fees for episode care and economic rewards for promoting health and patient-centered and patient-responsive care.

2. Broad geographic and regional grouping of primary care physicians with revenues from diagnostic, laboratory, x-ray, pharmaceutical, and other facilities that flow to the group and give the group marketing and legislative clout;

3. Virtual groups with enough revenues to support informational and treatment infrastructures and data to form a rational basis for control and selection of specialist referrals; a openness to innovative new practice designs – concierge care, direct-cash care, non prepaid care, office and home based care, multi-specialty ambulatory care with affiliated care modalities, retail and office based outlets with sufficient EHR support to validate value.

4. Multispecialty groups with salaried primary doctors and specialists, sometimes with owned hospitals, health plans, and often affiliated with doctors outside the system and with ownership of diagnostic, treatment, surgical, ambulatory, and pharmaceutical facilities. This is often called the Mayo model, and is being pursued by physician groups like the Carillion Clinic in Roanoke, Virginia.

End Game

Whatever happens, and it most surely will, is that sustainable primary care business models must offer lower costs, more patient access, tangibly superior results, and greater patient and physician satisfaction, all rooted in economic and clinical performance.

If you give the matter any thought at all, you will realize promised Obama reforms are based on greater affordability and savings from preventive care, chronic disease management, fewer hospitalizations and ER visits, and more linkage of electronic medical records – all of which fall into the province of primary care. You might say, if you were unimaginative political sloganeer, it’s all about health care economies and their place in the larger U.S. economy, stupid!