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MACRA may fuel trend of doctors leaving small practices, defecting to hospital employment

Between 34-59 percent of physicians remain in practices of nine or fewer, while roughly 39 percent are employed by hospitals.

Jeff Lagasse, Associate Editor

New research published in Health Affairs suggests that, despite protections for small practices, MACRA may push physicians to pursue employment by larger corporations.

Small and independent physician practices likely won't be left completely out in the cold as MACRA sinks its teeth into the healthcare landscape, wrote Lawrence Casalino, a professor at Weill Cornell Medical College in New York City and author of the study. MACRA provides the opportunity for these practices to organize themselves as Advanced Alternative Payment Models, along with some technical assistance. Alternatively, if there's an AAPM Accountable Care Organization nearby, the ACO can give independent practices the opportunity to participate, minus corporate employment.

Nevertheless, participating in the Comprehensive Primary Care Plus Model, or creating an Oncology Care Model practice -- two of the AAPMs available under MACRA -- requires the investment of capital, not to mention substantial physician and staff time, Casalino wrote. Both of these are scarce in small practices, and involve taking on some financial risk for the cost of care.

[Also: Oncology practices face hurdles in MACRA implementation, American Society of Clinical Oncology study says]

Perhaps more importantly, the research suggests that MACRA may prove too complex for many physicians. Faced with that complexity, and the financial risk that comes with it, many physicians may simply seek shelter in larger corporations.

Corporate employment does offer some advantages, the study found. They have capital to invest in things such as information technology, or broader population health initiatives. Plus, payers can give large corporations strong incentives to improve care; the corporation's size enables them to accept a fair amount of financial risk for their performance, and to be evaluated based on quality measures such as their rate of ambulatory care-sensitive admissions.

Those same corporations, however, may focus more on increasing negotiating leverage than on improving care. They may also treat employed physicians as isolated individuals instead of helping them integrate into functional medical groups.

[Also: Participation in Medicare Shared Savings Program bodes well for MACRA bonuses, experts say]

On top of that, when a corporation is hospital-based, it has incentives to keep its beds full, and to push physicians to use it hospital's facilities and specialists even if there are better or less expensive alternatives.

As of today, between 34-59 percent of physicians remain in practices of nine or fewer. Approximately 39 percent are employed by hospitals. Casalino said physicians have been trickling into larger practices, hospital employment or both for the last couple decades or so.

[Also: Providers still not ready for MACRA, Stoltenberg survey says]

The study asserted that, despite political wrangling over the future of healthcare reform, MACRA will likely remain due to its bipartisan support. But the Trump administration has been critical of the Center for Medicare and Medicaid Innovation, which has created most of the APM models, and if CMMI were ever abolished it would have a profound impact on the forms of organization that succeed under MACRA.

Twitter: @JELagasse