Are Physicians Fed Up with Fee-for-Service?

The healthcare industry is facing a physician shortage. Patient expectations are changing as they pay more. And, the government and commercial payers are requiring more from providers to get reimbursed.

So are physicians getting fed up? According to recent studies they very well may be. And, many physicians are looking to other models to regain some autonomy and increase their own satisfaction. 

For the last three years in a row, the Physicians Practice Great American Physician Survey has shown that physicians’ top frustration is too much third party interference. Significantly, the percentage who cite this as their top issue has also grown over the same period.

Recently, Kareo and the American Academy of Private Physicians, conducted a survey asking for more detail on the perceptions providers have of different practice models and how they are being used. The data from this survey supported the idea that physicians are increasingly frustrated with conventional healthcare.

There were over 860 responses to the survey, with 682 being from clinical providers. The majority were in small practices of one to five providers. Nearly 25% were already using direct pay, concierge, or some type of membership program in there practice. And over 45% said they were somewhat likely or highly likely to make a change to one of these models in the next three years.

These numbers are higher than what has been seen in other surveys. This may be a result of the way the question was asked. The provider could be using any form of these models—fully or just in part—in their practice. In fact, the second largest group using these models only had 25% or less of their entire patient panel as members.

When asked why they switched to an alternate model, providers cited spending more time with patients as the top reason but it was closely followed by separating from insurance payers. When asked why they might switch, conventional providers cited separating from payers as their top reason. For both groups, improving work/life balance was the next most common answer.

Clearly, providers are looking for ways to reduce that third party interference by transitioning all or part of their practice to an alternate model like direct primary care, concierge, or other membership program. It also clear, that there is no single path to making a change like this.

When current private pay physicians were asked how they define their practice, they were almost equally split between cash practice, concierge, and direct primary care. And, when asked about their billing model, about 30% said based on visit time and 70% said fixed fee based on service type. There was also a wide range of fees charge, with an average of $2,025 per year. In addition more than half, said they still took insurance as out of network providers.

There is no doubt that things are changing, and many physicians are eager to find better, more manageable ways to stay independent. Emerging private pay models are of interest as a possible solution.

See the full survey results or learn more about how to be an Agile Medical Practice.