HomeHealth Care NewsPandemic is Pushing Doctors to Consider Independence

Pandemic is Pushing Doctors to Consider Independence

The severe economic dislocations caused by the widespread COVID-19 pandemic lockdowns are having a profound effect on how physician practices view their future, concludes a recent report.

The report released July 21 by McKinsey and Company and entitled “Physician Employment: The Path Forward in the COVID-19 Era,” is based on two national surveys of general and specialty physicians, one in 2019 and the other six weeks into this year’s pandemic.

The Financial Hit

According to the report, the impact of the lockdowns came fast and furiously.

“During the first wave of COVID-19, more than half of respondent physicians reported that they were worried about their practices closing,” state authors Kyle Gibler, M.D., Omar Kattan, M.D., Rupal Malani, M.D., and Laura Medford-Davis, M.D.

Almost half of all independent practices said they had less than four weeks of cash on hand, and 68 percent of those respondents looking for partners ranked financial support as their number-one reason. A third of all independent physicians reported that they believe working for a larger practice may provide greater benefits.

A comparison between McKinsey’s 2019 survey results and those garnered a few weeks into the 2020 coronavirus pandemic shows how doctors are rethinking their options. When asked in 2019 to rank the appeal of practice models, 75 percent of respondent physicians stated they preferred to join an independent physicians’ group, while 41 percent favored joining a hospital or health system. Six weeks into the pandemic, 89 percent of respondents wanted to join an independent group, while 28 percent leaned toward employment with a health system.

Buyers’ Remorse

Despite increased interest in affiliating with a practice or health system in 2019, 26 percent of doctors who joined a health care system reported “buyers’ remorse,” stating they were interested in returning to self-employment. Respondent physicians in large independent groups reported less satisfaction than smaller independents. McKinsey found that 58 percent of respondents in large groups compared with 71 percent in small groups said that they would like to remain independent.

McKinsey found that COVID-19 has affected physician practices in other ways. More than 40 percent of physicians reported that after COVID-19, they will be more likely to refer patients to non-hospital facilities for procedures, office visits, and diagnostic testing than they were pre-pandemic, with a more pronounced effect on independent physicians than those who are employed.

Autonomy with a Safety Net

More than half of independent practitioners indicated the negative financial impact of the pandemic may lead to a new wave of partnerships and consolidation, the report concluded.

“However, physician respondents stated that they are looking to gain financial security and operational support without losing too much of their autonomy,” the report stated.

McKinsey’s findings of the deteriorating financial position of many physician practices were confirmed by a survey taken July 10-13 by the Larry A. Green Center in partnership with the Primary Care Collaborative. The survey of nearly 600 primary care physicians in 46 states found that four months into the COVID-19 pandemic, fewer than 10 percent of doctors questioned have been able to stabilize their operations.

The survey also found that nearly 9 out of 10 primary care practices continue to encounter significant difficulties in the midst of COVID-19, including obtaining medical supplies, meeting the increased needs of their patients, and acquiring sufficient resources to remain operational.

Direct Care Dodges a Bullet

One segment of the medical profession may actually have benefitted from the pandemic’s disruptions.  Direct primary care (DPC) physicians offer their services at a monthly fee instead of relying on third-party payers such as Medicare, Medicaid, and insurance companies. This model has enabled DPC to weather the COVID-19 storm better than conventional fee-for-service practitioners. Operating with a smaller staff, overhead is lower in DPC, and the fact that DPC members pay a monthly fee reduces pressure on cash flow.

“It has been a blessing to have been an early adopter to the DPC model,” says Michael Ciampi, M.D., a physician in South Portland, Maine, and policy advisor to The Heartland Institute, which publishes Health Care News.

“It allowed our practice to remain financially secure during the shutdown because our income is not dependent on face-to-face encounters to generate fee-for-service claims,” Ciampi said.

Ciampi said his practice was already set up to overcome the challenges of the pandemic.

“Like most DPC physicians, I had already been doing remote care via phone, email, text messaging, and video chats,” Ciampi said. “My team and I did not miss a beat as we shifted from primary in-person care to virtual, unlike all the insurance-based practices around me which had to invest a lot of time and money as they scrambled to initiate these remote-care services and figure out how to bill for them.  I am certain that if I didn’t practice in the DPC model, my practice would have been closed permanently by now.”

Bonner R. Cohen, Ph.D., (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.


Internet info:

Kyle Gibler, M.D., Omar Kattan, M.D., Rupal Malani, M.D., Laura Medford-Davis, M.D., “Physician employment: The Path Forward in the COVID-19 Era,” McKinsey & Company, July 17, 2020:  https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/physician-employment-the-path-forward-in-the-covid-19-era

Bonner R Cohen
Bonner R Cohen
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.


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