APRIL 2008
VOLUME 5 NO. 4
PRACTICE MANAGEMENT

YOUR PRACTICE

Solo practice becoming less profitable

Trend due to gov't payment reforms, push towards collaborative care


The solo practitioner — long the pillar of family medicine — is slowly but surely becoming extinct.

"It's extremely difficult anyways to do family practice, but practising it by yourself is even harder," says University of Toronto health policy professor Dr Michael Rachlis. The reasons for that are legion: from clinical and logistical concerns to financial reasons.

Four times as many group-practice GPs than solo GPs netted over $300,000 last year, according to data from NRM's Survey of Medical Practice 2007. The growing income disparity between solo and group GPs — earnings can be up to a third greater for group GPs in some provinces — has been a major driver in the economic decline of the solo practitioner.

The proportion of Canadian family physicians in solo practice has plummeted; it dropped by nearly a fifth in a six-year period alone, from 31% of doctors in 1997 to 26% in 2003, according to a 2005 Canadian Institute for Health Information (CIHI) report. That drop-off has continued steadily since then, reaching a low of 23% in 2007.

That decline raises two important questions. First, why are solo GPs getting paid less? And second, what does all this mean for you and for your patients?

ROOTS OF DECLINE
Part of the reason for the decline of solo practice is the simple reality of economies of scale: buying in bulk saves money. Group practitioners, because they can share some costs, typically have lower overhead for things like rent, office maintenance, staffing, office and medical supplies and technology support.

But the trend towards group practice is largely attributable to the slew of hard-to-resist incentives that governments are using more and more to encourage physicians to practise in collaborative, group settings. It's simply becoming less and less financially rewarding to run a solo practice instead of joining a group. That relationship between group practice and increased income is reflected in the results of our Survey of Medical Practice (see the table "Percentage of GPs who netted over $200,000, 2007," above).

"What you are seeing now," says Dr Rachlis, "is as FPs in different provinces get a taste of interprofessional care and non-fee-for-service payment for at least some of their services, they find they make more money and have more rewarding practices."

A number of Canadian provincial governments now offer sizeable financial incentives to encourage family physicians to work in collaborative group practices, such as Ontario's relatively new and quite lucrative Family Health Team system and other reform remuneration models, notably in British Columbia, Alberta and Quebec. These alternative models have proved popular; they accounted for about 12% of total physicians' billing in 2000, but that figure had nearly doubled just five years later.

"One of the things governments want is to have doctors move more and more to working in groups, so in some provinces there are financial rewards to do that," says Dr William Hogg, a University of Ottawa primary healthcare performance researcher who has published research on this question. "It's certainly true that reform models pay better." In other words, the decline of solo practice may in fact be a condemnation of the traditional fee-for-service payment model.

The drop in the number of GPs in solo practice, and the concomitant rise in the popularity of group practice, has been mostly among young doctors. "While younger doctors were in med school they were exposed to the group practices that the government is trying to encourage now," notes Dr Hogg. And a gender gap appears to exist, as well. According to an analysis of data from the latest National Physician Survey, solo practitioners are about 41% more likely to be male than female, though that gap has narrowed somewhat since 2004.

SURVIVAL OF THE FITTEST
The gradual disappearance of the solo GP, like that of the Siberian tiger, has inspired a great deal of consternation in observers. But, some experts argue, the disappearance of the solo family doc needn't be mourned.

Solo practice is to blame for some of our healthcare system's current access issues, says Dr Rachlis. "I think if FPs are working with other professionals who can deliver services as well as or better than physicians, like a dietary counsellor, that it will be a better quality of care. That is what's really driving the move away from solo practice in this country."

Dr Hogg agrees. "The number of complaints reported to professional colleges and licensing authorities are fewer when a physician practises in a group, and the level of career satisfaction is higher." The decline of solo practice, unpleasant though it is to some physicians, may be necessary to usher in a new era of collaborative care — and in the process, Dr Hogg says, physicians stand to benefit from the new group models' alternative remuneration plans. Nevertheless, Dr Hogg says governments must refrain from being too coercive in applying incentives. One man's incentive, after all, is another's penalty. "The worst public policy would be to have one-size-fits-all, to really mandate that everybody has to work in the same circumstance," he says. "There are as many different personalities in medicine as there are doctors, and some are well suited to work alone and some are not."

 

 

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