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The Keckley Report

Physician Discontent: Have We Reached Their Tipping Point?

By October 30, 2018March 1st, 2023No Comments

Last week, the American Medical Association released a study conducted by RAND that confirmed growing discontent among physicians. This study focused on how physicians in six communities had adapted to the much-heralded shift in payment incentives from volume to value aka alternative payment models (APMs). The research team concluded:

  • Physician practices, health systems, and consultants find it difficult to keep up with the proliferation of new models, with some calling for a “time out” to allow them to better adapt to current APMs.

  • Alternative payment models have become increasingly complex since 2014. Practices that have invested in understanding complex APMs have found opportunities to earn financial awards for their preexisting quality — without materially changing patient care.

  • Since 2016, risk aversion among physician practices was more prominent. Risk-averse practices sought to avoid downside risk or to off-load downside risk to partners (e.g., hospitals and device manufacturers) when possible.

In response, the AMA called for simplification of the APMs, a slow-down in their use by Medicare so practitioners have adequate time to prepare a continuation of upside-only risk arrangements to encourage physician participation.

In recent weeks, AMA has joined the American Hospital Association and other trade groups in calling for a slow-down in the transition to value-based payments to physicians. Their concerns are legitimate but there’s a bigger issue: physicians are not happy. Alternative payment models are the latest in a series of disappointments that have physicians at a tipping point. Requirements to use electronic medical records, disclosure of their Medicare billings and the proliferation of websites purporting to showcase physician quality have taken their toll. Recent studies confirm their mood is unsettled:

Let’s be honest: the issue is bigger than how physicians are adapting to alternative payment models. It’s about a growing belief among many physicians that the profession has been marginalized as health system reform evolved over the past decade. They sense loss of control, prestige and power. And it’s intensifying.

From a strategic perspective, the causes for their frustration are many: insurers are pushing for deeper discounts and lower reimbursement. Medicare is promoting alternative payments and shared risk. Entrepreneurs are selling data about physician performance many believe inaccurate. Employers are encouraging their employees to use on-site clinics staffed by nurses instead of local practitioners. Regulators are increasing their compliance risks, and media attention to “bad apples” in their ranks has tarnished the public’s trust in the profession. Understandably, physicians feel they’re victims of a system run amuck.  But they also bear some of the blame, consider….

  • Intramural politics and turf battles between specialties has eroded the influence as a profession. The rifts between primary care and specialty physicians, inclusion of psychiatry in integrated care teams, compensation differences across specialties and diminished influence of the American Medical Association in matters driving physician discontent have taken their toll. Physicians identify first with their specialty society. Though a tightly guarded secret, AMA membership has held steady at only one in four physicians. In its 2017 Annual Report, the trade group noted membership up 1.8% in 2017 but dues were down 1.4% but statistics for dues-paying membership among practicing physicians was nowhere to be found.

  • The gap between what consumers and practicing physicians associate with “good medical care” has widened. Consumers believe the vast majority of physicians are bright and trained well. They hold a different view of the “physician-patient relationship.” They prefer physicians who are digitally connected. They want access to their medical records and the ability to avoid unnecessary visits or tests. They think their time is as valuable as their physicians so long waiting times for scheduled visits are unacceptable. They think the physician’s prices should be readily accessible, they should provide explicit information about treatment options and engage them in those decisions, disclose their business relationships and conflicts of interest, offer extended hours, and better service. They want to be treated respectfully. Most physicians understand these expectations intellectually, but responding is something quite different. That frustrates physicians.

  • Physician concern for income security has prompted many to become employees of larger practices. Physicians think other stakeholders in the system profit from their labor. They think they work harder than most, trained longer than most, and deserve to be paid more than most. And they bristle at executive compensation in hospitals, insurance and other sectors they consider earned at their expense. Thus, they’re reluctantly leaving private practice for employment to gain income security. Per AMA data, in 2017, for the first time, less than 50% of physicians (47.1%) had an ownership stake in their own practices—6% fewer than in 2012. Almost a third, 32.8%, were employed by hospitals, and in many specialties, like emergency medicine, primary care and others, it’s the majority. At the same time, practices are getting bigger. Between 1983 and 2014, the percentage of physicians practicing alone fell from 41% to 17% while the percentage in practices with 25 or more doctors grew fourfold (5% to 20%). 

So, here’s where we are with physicians: a third of the 954,000 physicians are looking for an exit strategy. The rest are looking for a career option where they are respected, compensated well and provided the tools to practice sans administrative hassles and paperwork. They are closely watching the disruptors like Amazon, Apple, Walmart, CVS, Walgreens, Optum and others hoping new opportunities will emerge. They know hospital employment is an option but understand it means a pay cut. And some are attracting private investors to fund large, independent single and multi-specialty medical groups as an alternative against employment elsewhere.

Discontent about proposed changes to alternative payment models is symptomatic of a bigger issue: physicians are fed up. Some will adapt and thrive. Many won’t.

It seems to me physicians have reached their tipping point. It’s an issue that merits urgent attention across the entire system.