Will Small-Practice Doctors Become a Thing of the Past?

NEW BRITAIN--Dr. Lawrence Koch began practicing medicine in what he calls "the golden era." For 27 years, he cared for patients in a private practice.

But in the mid-1990s, as payment rates from Medicare and private insurers declined and paperwork increased, requiring more employees to handle it, Koch gave up ownership of his practice and began working for a hospital-owned practice. He's glad he did.

Dr. Lawrence Koch

"It was obvious to me that a solo practitioner in internal medicine really couldn't survive any longer," he said recently in his office near The Hospital of Central Connecticut's New Britain campus.

Koch may have been ahead of the curve, but many doctors in private practice are now contemplating similar moves, giving up ownership of their practices to work for hospital-owned practices or larger groups with multiple specialties.

Connecticut is still dominated by practices with fewer than four physicians and has been slower to change than many other parts of the country, but hospital officials and doctors say the shift has been accelerating. Young doctors in particular are choosing to work for larger organizations rather than starting their own practices, they say.

The change is fueled in part by hospitals looking to grow their ranks of community-based physicians, who are a reliable source of referrals for lab work, tests and inpatient care. The health care system is evolving toward payment structures that reward better coordination between doctors and hospitals--and keeping patients out of the hospital. That's led many hospital officials to see links with community physicians as critical to their future.

For doctors, meanwhile, becoming part of a larger organization means not having to handle administrative tasks like billing or be on call as often. It can mean more manageable hours, more leverage in negotiating with insurers, and a more secure financial situation.

In addition, many changes in health care seem to favor larger organizations, doctors say, particularly the push to adopt electronic medical records and an increased focus on measuring care quality and patient outcomes.

"All of these new types of delivery systems require incredible amounts of infrastructure, both in physician time and knowledge about the bureaucratic ins and outs of government regulations," said Dr. Claudia Gruss, president of the Fairfield County Medical Association. "For a small practice, it's extremely difficult to keep up to date with all these new regulations and reporting requirements."

Gruss is one of five doctors in a practice with offices in Georgetown, Wilton and Norwalk. It's sizable by Connecticut standards. But it's not big enough to deal with new regulations and have bargaining power with insurers, she said. The group is exploring its options.

But not everybody is looking to change, and even those who see the shift as inevitable say there can be downsides.

Many older doctors who built their practices and ran them independently are not interested in going to work for a larger organization, which could mean less discretion about how to practice or how much free care to provide.

Employed doctors might work fewer hours than they did when they were self-employed and reliant on patient volume for income, potentially leading to less access for patients. Some say employed doctors might not be as committed to staying in a particular area as a doctor who built up a practice over many years.

Office-based physicians support an average of 5.7 jobs, including their own, according to a recent study prepared for the American Medical Association, and some of those could be lost if back office functions like billing can be handled by a larger organization.

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