The reason? For Barnes, the answer boils down to one simple fact: Running a private group practice, of whatever size, is increasingly a difficult undertaking, one that fewer and fewer physicians are keen on doing. "If you come in as an employed physician, we can take care of the billing and the medical records, and you can practice medicine instead of trying to manage a business and make a profit."
The time-honored arrangement of physicians running private practices is rapidly giving way to direct employment arrangements with hospitals and health systems-and in some cases, even health plans. Delivery systems are buying group practices and physicians are looking to sell. The I.T. implications are profound-hospitals participating in the practice acquisition boom have found that integrating physicians and their practices' technology is no simple feat. Ironically, moving a paper-based group practice into the digital era may be a simpler undertaking than integrating an acquired practice already digitized.
"Economic instability among physicians is a huge driver in the decision to give up private practice," says Lisa Bielamowicz, M.D., national physician practice leader at The Advisory Board Company, a Washington, D.C.-based consulting firm. "I have never seen independent physicians more concerned about their ability to maintain a solvent practice. There is more red tape and big increases in capital costs. I.T. and meaningful use are a huge part of that."
Hospitals looking to build out an employed base of physicians invariably need them connected via an electronic health record. But the rapid push to acquire physician practices is creating new challenges for the I.T. department. The transition calls for careful management, which is not always easy in a rapid growth mode. "It is not unusual in some areas to see an entire market shift in 18 months to 24 months from physicians being completely independent to employed," says Bielamowicz.
Interestingly, it's young physicians who are reluctant to strike out on their own. According to the American Medical Association, the younger the physician, the more likely they will steer clear of the entrepreneurial role-and long hours-associated with private practice. While nearly 70 percent of physicians age 55 and older are self-employed and one quarter are employees, less than 50 percent of physicians under age 40 are self-employed, and a near equal number are employees, according to AMA research.
Further, AMA surveys found that in 2008 just over 60 percent of physicians were self-employed, with the remainder employed either by group practices or hospitals. A similar survey conducted by Accenture and released last June estimates that by 2013, less than one-third of physicians will be independent.
The reason I.T. has been an increasingly important factor in physicians seeking hospital employment is that tomorrow's outcomes-based reimbursement models will reward care coordination, and that level of coordination necessary for burgeoning accountable care organizations requires a sophisticated-and expensive-I.T. infrastructure.
A perfect storm
Bielamowicz describes a perfect storm creating the spate of group practice acquisitions. "The hospitals want a closely aligned network," she says. "Physicians are knocking on their doors and hospitals are willing to listen. Only a small number of hospitals may overtly identify building an accountable care organization as part of their strategy. But it's in the back of their minds when they look at acquiring a particular practice." That describes the situation at Adventist Healthcare, a Rockville, Md.-based delivery system comprising five hospitals. Adventist has relatively few employed physicians, but plans to build an employed physician group of some 500 physicians, and wants to have 100 in the fold by the end of the year, says Gaurov Dayal, M.D., Adventist's outgoing vice president and chief medical officer (Dayal was transitioning to SSM Health in St. Louis as this article was going to press).
Asked what is driving the acquisitions, Dayal says "current and future changes in health care payment. We will increasingly be paid for outcomes, not volume. To get to the care coordination to make that happen you need stronger linkages to physicians. The strongest linkage is employment."
Virtua Health, for its part, has seen a four-fold increase in the number of employed physicians since 2008, says Al Campanella, vice president and CIO. A four-hospital system based in Marlton, N.J., Virtua now employs 240 physicians, including 75 in primary care, 50 hospitalists, and 25 surgeons, with the remainder scattered across several specialties. "We need to work more closely with our physicians," Campanella says. "That closeness turns to employment agreements."
As part of the employment contract, physicians agree to work on the same EHR platform, in this case, an ambulatory system from NextGen. The acquired physicians span 36 practice sites-and Virtua is transitioning them to the EHR one at a time. "We have 15 to go," Campanella says. "It is a lengthy process. You can't just go in and turn on the EHR. Some physicians don't use computers much in their personal lives and there can be a difficult adjustment."
The key to tackling the I.T challenges, Campanella says, is taking a methodical approach. First, the practice location's I.T. infrastructure needs to be modernized. "Typically we find either no computers or a stand-alone computer used for communication with select payers," he says. The upgrade entails placing the site on Virtua's wide area network, adding wireless routers, and installing printers, document scanners and laptops. "Only then can we install the EHR," the CIO says, adding that this initial stage typically takes up to six weeks.