The Physicians Foundation Begins to Roll Back the Tide Against Independent Physicians

Truly there is a tide in the affairs of men, but there is no gulf-stream setting forever in one direction.

James Russell Lowell (1819-1891)

November 12, 2011 - The Physicians Foundation deserves greater visibility for its contributions for improving the practice of medicine.

Created in 2003 with a $115 million endowment from several major insurance companies, the non-profit organization has issued $28 million in grants to physician and other organizations to improve care and to protect independent physicians. These physicians provide most of the care for Americans, but their numbers are fading as they come under increasing economic and political pressure.

Here, Philip Betbeze, senior leadership editor with HealthLeaders Media, in a November 11 article entitled “Fighting the Tide Against Independent Physicians, “ describes the plight of independent physicians and what the Foundation is doing to reverse the tide. For emphasis, I have italicized the contribution of the Foundation in turning back the tide.

“Independent physician practices are slowly fading away, and with the advent of healthcare reform, the pace may be about to get much quicker. It's only one of a few troubling signs about the physician labor pool, which seems increasingly dissatisfied with their career choice and the direction of the healthcare industry.

Physicians are being pushed to employment in hospitals or by hospitals, and they're not necessarily happy about it. To be sure, some, especially recent medical school graduates, like the safety, the (somewhat) regular hours, and the freedom to practice medicine rather than worrying about small business concerns that an employment contract offers.

On the whole, though, physicians' dissatisfaction is palpable. According to the physician component of the 2011 HealthLeaders Media Industry Survey, 58% of doctors say that healthcare reform has weakened their organization's financial position—even though many of its provisions haven't kicked in yet!

Even worse, 60% say healthcare reform has weakened morale, and only 67% of them would encourage their child to enter healthcare. Not exactly encouraging for an industry that needs more physicians.

Here's further evidence that physicians are rethinking their choice of career: Merritt Hawkins, a national physician search firm, recently released a survey showing that, despite the fact that 75% of physicians coming out of training are getting at least 50 job solicitations, close to 28% of the same group said that if they had the chance to do it all over again, they would choose a different profession.

How depressing is that?

I could imagine, in theory, being quite happy in a field that provided me 50 job offers upon completion of my studies and training. I hope I'm not letting a big secret out of the bag by saying the demand for journalists is just a little less strong than that. In any case, physicians see that reimbursements are declining.

They have huge debt, generally, and they're not sure when they'll ever be financially whole again, given the expected clampdown on their future earning potential.

In an excellent story in the forthcoming November issue of HealthLeaders magazine about the realities driving physician employment at hospitals, my colleague Karen Minich-Pourshadi says that the percentage of truly independent physicians, according to the American Medical Association, has been declining by 2% a year and is projected to decline by as much as 5% annually by 2013.

At least one relatively deep-pocketed organization is doing the best it can to hold back the tide not only of doctor departures from the field of medicine, but also departures for employment in big institutions.

"Because bigger is not always better," says Lou Goodman, president of the Physicians Foundation, a nonprofit grant-making entity that was formed with a $115 million endowment. The endowment came from a group of physician societies who won about $1.5 billion in retrospective and prospective relief resulting from a class action suit in 2003 against several major insurance companies.

Physicians alleged, successfully, that the companies were using a hidden system (colloquially called a black box) to deny reimbursements to which physicians were entitled under their contracts with the insurers.
The foundation has awarded about $28 million in grants since its founding, and usually funds research and ventures that are in the business of keeping physicians who want to be independent.

"All the incentives are arrayed against it," he says. "We're collecting information, through our medical practice task force, with a survey of young physician needs. They're not seeing a lot of alternatives to employment."

In an effort to help physicians see another way, the foundation has developed technological solutions aimed at the independent physician office, and they are committed to helping educate physicians on the realities of running a business, even one that's challenged by healthcare reform.

Together with Northwestern's Kellogg School of Management, the Physicians Foundation hosts a three-day educational institute with Kellogg professors at which presidents of state medical societies learn negotiating skills and other business concepts so they have a toolkit to deal with hospitals, insurance companies, and employers.

Further, they've developed a Roadmap for Physicians to Health Care Reform, a simplified guide for independent physicians that "explains to physicians in straight English what the Affordable Care Act means to the doctor and his patients and what opportunities they might have to participate," says Goodman.

He hopes these efforts encourage physicians of an independent bent that they can maintain that, though he concedes it's a tough sell sometimes. Goodman says that many of the physicians who initially choose employment with a hospital or large group also choose to leave that position after three to five years. Whether or not they go to another employed position is immaterial, he says. They need other options.

"They feel under pressure, stress, unappreciated, overworked, and treated more like housekeeping than the fine professionals that they are," says Goodman. "But there's no medicine without physicians."

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