Against the tide

Since leaving the last stage of my training *vague mumble* years ago, I’ve been a full-fledged attending-level pediatrician in two practices.  The first was in a practice owned by the local hospital, and my current one is a real-live private practice, in which I am blessed to now be a partner.  If I were to hazard a guess on behalf of all current and future partners, I would say that one of our cardinal goals is to remain a partner-owned concern for perpetuity.  Time, as they say, will tell.

It seems I am bucking the trend (which I knew long before I read this article in the New York Times about doctors in Boise):

For decades, doctors in picturesque Boise, Idaho, were part of a tight-knit community, freely referring patients to the specialists or hospitals of their choice and exchanging information about the latest medical treatments.

But that began to change a few years ago, when the city’s largest hospital, St. Luke’s Health System, began rapidly buying physician practices all over town, from general practitioners to cardiologists to orthopedic surgeons.


Boise’s experience reflects a growing national trend toward consolidation. Across the country, doctors who sold their practices and signed on as employees have similar criticisms. In lawsuits and interviews, they describe growing pressure to meet the financial goals of their new employers — often by performing unnecessary tests and procedures or by admitting patients who do not need a hospital stay.

I should stipulate a couple of things before I start comparing my experience to those reported in the article.  First of all, the hospital that owned my old practice was the only game in town, and the community was not large enough to support more than one medical center.  I cannot comment on referral wars or any such thing when such competition exists, though I think it’s pretty easy to understand how one might ensue.  Further, I never felt the slightest bit of pressure to order things or admit patients for any reason other than medical need.

With that out of the way, I feel free to say that I never want to work in a hospital-owned practice again.  While I cannot relate to much of what is described in the (infuriating) article, I can most certainly relate to feeling pressure from the hospital to maximize revenues.  Though I never felt any push to prescribe unnecessary medical interventions, I definitely knew how profitable I was to the company.  And I was tutored on the vagaries of coding and billing, such that I could do so more “efficiently” (to use the favored euphemism).

What does that mean?  To summarize my primer on medical billing, you set the charge for the visit on how complex it was.  And there is more subjectivity to that than one might think.  Complexity comprises the history you took, the exam you performed, and the medical decision-making you did.  If you take a detailed history and perform a thorough exam, you can bill for a more complex visit, even if it’s for something simple like a cold.  This is known as “upcoding.”

If you’re viewing your patient encounters through the prism of “efficient billing,” you can start to see a trend toward more complexity than perhaps was really there.  Now, medical providers with an eye toward their own profits can obviously engage in upcoding just as easily as those who are employees.  But if your default preference is to avoid being audited by insurance companies suspicious of how complex your patients’ ear infections seem to be, or if you simply prefer to err on the side of keeping your patient costs down, that’s a lot easier to do without pressure from the boys in accounting.  I’m happy to be in that kind of practice now, and we’re doing just fine.

The tension between profits and patient care is a recurring preoccupation of mine (natch), and one without a tidy solution.  I still lament the lack of a private option in the Affordable Care Act, as it would have introduced a counterbalance to profit-driven insurance companies.  As it is, hospitals, providers and insurers are all fighting for every last dime of healthcare money, and I keep reading articles like the one above.  Revenue-maximization is often undeniably bad for patients, and our primary obligation is to them.

We all like to get paid.  As part owner of the practice where I work, of course I want us to be as profitable as possible.  But it’s nice to know I don’t have to worry about meeting revenue benchmarks in order to prove I’m doing my job well.

Russell Saunders

Russell Saunders is the ridiculously flimsy pseudonym of a pediatrician in New England. He has a husband, three sons, daughter, cat and dog, though not in that order. He enjoys reading, running and cooking. He can be contacted at blindeddoc using his Gmail account. Twitter types can follow him @russellsaunder1.


  1. For whatever reason, that first part of the quote is doubled up, FYI.

    To the meat of the post, do you think that improvements in medical informatics will stem the trend toward consolidation. I can see the benefits to working within a broader “network”. If my orthopedist and my physical therapist are both part of Big Med’s network, there likely will be increased efficiency in my visits between the two. But medical informatics will likely lead to that efficiency being common place even with otherwise unaffiliated practices. Will that help the push towards consolidation at all?

    • 1) Whoopsie. Fixed it. Thanks!

      2) Given the myriad informatics systems available, I’m skeptical that it will have much impact on the trend. Different practices and systems are usually not compatible.

      3) Seamless patient care isn’t really the drive behind consolidation. It’s individual practices deciding to cash in their chips and let a larger entity face their financial risks and negotiate with third-party payers. The loss in freedom as a provider is, for many, outmatched by the gain in financial security. As I note having experienced both, I’ll keep my autonomy, thanks all the same.

      • Gotcha. Regarding informatics, it is my understanding (which is loosely cobbled together from me staring blankly while Zazzy explains a foreign world to me) that the goal is to ultimately have universal or near-universal seamlessness between practices and systems. While there are a myriad of systems now, it will likely come to pass that one will become the dominant brand or that certain compatibilities will be mandated (a lot of the progress already made is a result of meaningful use standards mandated by the government).

        Regardless, if what you say is correct (and I had a feeling that informatics/seamlessness was not a prime factor but I had my rose-colored-glasses on for a moment), then it matters not what happens there.

        The importance and benefit of professional autonomy cannot be understated, in my opinion.

        • While there are a myriad of systems now, it will likely come to pass that one will become the dominant brand or that certain compatibilities will be mandated

          I believe the arc of medical history is bending toward that goal. I am… skeptical that it will be an efficient or enjoyable process.

          • Heh… I’ll send our Zazzy’s reports from the front lines. They are… rarely enjoyable.

          • ” I am… skeptical that it will be an efficient or enjoyable process.”

            you are likely right to be skeptical. but it’s coming regardless.

          • Oh, I have no doubt of that at all, dhex. I would be a fool to deny it. I just think the process will be slow, long, laborious and unpopular.

  2. So when those giant checks from Big Pharma come rolling in, I assume that you personally get a larger chunk of the proceeds in private practice as opposed to one owned by a hospital, wherein I assume hospital administrators get their chunk first.

    (I kid! I kid!)

  3. I’ll see if I can find it, but I *think* the research indicates that private partnerships are more costly than hospital-run enterprises. That the further consolidation of doctors as employees is expected to be a money-saver for the system.

    Having said that, I can easily chalk a lot of that up to self-selection: profit-maximizers are probably most likely to have their own partnership, whereas others are more likely to be content being employees. Yet, in your case, where you’re not a maximizer, it completely makes sense to me why you would prefer your current arrangement. It’d be nice if obstetrical docs (totally hypothetical ones, of course…) who have low c-section rates didn’t have to worry about that making them a worse employee.

  4. This seems to be an East Coast-West Coast split.

    On the East Coast, I still see lots of doctors with private practices or small-group practices. I can walk all over New York and see townhouses that have been converted into medical suites for various doctors.

    On the West Coast, most doctors seem to allign themselves with hospitals or HMOs like Kaiser. They seem to like this on the West Coast. I’ve heard second-hand that younger doctors like being an employee for a large hospital system because it means making a six-figure salary, working four-days a week, and not having to worry about running your own business.

  5. But I’m assuming the hospital would stop your practice of adhering bandages to children with thumbtacks, right?

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