Large, Independent PCP Groups an Attractive Alternative

By Marcia Frellick | January 12, 2016

Medscape is reporting that large, independent, physician-owned primary care groups are a viable alternative to employment with a hospital or multispecialty practice under value-based contracting, according to a new analysis.

These large groups with physician autonomy have several advantages: They can offer imaging, laboratory services, health information technology, and quality improvement infrastructure, while still providing convenience and a small-practice environment for patients.

“Very few physicians and policy experts are aware of these groups,” write Lawrence P. Casalino, MD, PhD, from the Department of Healthcare Policy and Research, Weill Cornell Medical College in New York City, and colleagues in an articlepublished in the January/February 2016 issue of the Annals of Family Medicine.

The researchers studied five primary care physician groups varying in size and location and identified advantages, disadvantages, and challenges associated with the model.

They interviewed group leaders, surveyed randomly selected group physicians, and interviewed leaders of a health plan, hospital, and specialty medical group that shared patients with the groups. Using these data, they identified key themes.

The groups studied had an average size of 148 physicians (ranging from 49 to 255), of whom an average of 87% were primary care physicians. The groups differed in how much they engaged in value-based contracting, although all were moving to increase the amount of financial risk they took on for quality and cost performance.

The cost structure has drawn the interest of venture capitalists investing in corporations with accountable care organizations, the authors say.

“Though large groups’ negotiating leverage can lead to higher payment rates from health insurers, primary care costs are only 5% of health care costs,” the authors write. “When engaged in risk contracting, primary care groups can focus on controlling the other 95% of costs without conflicting incentives to keep specialists busy or hospital beds filled.”

Satisfaction Categories Differ

The surveys showed 81% of the groups’ primary care physicians reported being somewhat or very satisfied with their medical careers.

“Overall, most of the groups’ physicians reported agreeing or strongly agreeing that they had autonomy in practicing medicine, less pressure from such external entities as hospitals, more cohesion because they were a primary care group, and easy-access-to specialty care,” the authors write.

Among the challenges, however, were that the groups’ physicians report only moderate satisfaction with their clinical workload and work–life balance.

Moreover, the researchers note that the groups have little capital available to build or support infrastructure growth. Yet all of the groups viewed growth as necessary for economies of scale and to support infrastructures required for value-based contracting, including health information technology and care management infrastructures. “The groups are capital-poor compared with hospitals and corporate buyers of physician practices and must continually decide whether to remain independent or to sell. A sale can provide capital for infrastructure and significant one-time revenue for the physicians. This decision may become particularly pressing as groups’ physicians — and their leaders — approach retirement,” the authors conclude.

The five groups that agreed to participate were Arizona Community Physicians, Central Ohio Primary Care Physicians, Infinity Primary Care (Michigan), New West Physicians (Colorado), and ProHealth Physicians (Connecticut).

The Commonwealth Fund supported this project. Dr Casalino is a member of the American Hospital Association Committee on Research, the American Medical Association Expert Panel on Physician Professional Satisfaction, and the boards of directors of the Health Research and Education Trust and the American Medical Group Foundation. Two coauthors are leaders in ProHealth Physicians.