The future for practicing physicians in a corporate world

Forty years ago, in his Pulitzer Prize-winning history “The Social Transformation of American Medicine,”  sociologist Paul Starr predicted that independent physician practice, which had been a cornerstone of American medicine for most of the 20th century, would be eclipsed by the “coming of the corporation.” Starr forecast that the end of the century would not only be “a time of diminishing resources and autonomy” of this powerful profession, but also “greater disunity, inequality and conflict throughout the entire health system.” With the benefit of 40 years of hindsight, Starr’s was a remarkably prescient forecast.

By 2020, for the first time, less than half of U.S. physicians worked in physician-owned settings: more than 300,000 U.S. practicing physicians were employed by hospitals, and another 122,000 were employed by corporations of various kinds — health insurers, pharmacy chains, private equity-backed companies. A single diversified health insurer, UnitedHealth Group, claims to employ or represent 60,000 physicians through its Optum Health subsidiary.

Though Starr’s forecast rested upon a looming physician surplus beginning in the 1980s, compounded by the effect of pressures to contain medical expenses, three other factors contributed to the decline of independent practice. Many of the baby boom cohort of practitioners chose employment as a bridge to retirement, trading professional independence for income security and what they hoped was a saner work schedule. The rising number of women entering medicine traded independence for the work-life balance that enabled them to start and care for families. And the crushing burden of college and medical school debt made assuming the risks of independent practice a bridge too far for many physicians entering the workforce.

In accepting employment, physicians old and young shifted their business risk to corporate enterprises, which absorbed the resultant decline in productivity and negative practice cash flows in exchange for achieving overarching corporate objectives: increased hospital admissions, imaging scans, and surgeries; the redirection of patient flows away from hospitals; or increased prescriptions or traffic in retail stores.

Viewing employment as a solution to work-related stress and burnout has proven simplistic, and many of the clinicians seeking shelter from these problems have not found it.

Several of the supply factors I mentioned earlier are temporally limited. Baby boom physicians will eventually retire — some reluctantly, but many gratefully. And younger physicians will eventually pay down their debts and be in positions to re-evaluate what they traded away when they joined large corporate enterprises.

But as baby boomers encounter end-of-life medical problems, the U.S. will experience growing shortages of primary care physicians, geriatricians, psychiatrists, cardiologists, gastroenterologists, and others. These shortages will increase practice options and choices for many physicians, something that began happening during the pandemic due to burnout-related retirements.

Given the macro trends, what will determine the future role and influence of practicing physicians in the care system? Here are a few questions that need answers:

• Will absorbing physicians’ costs as a “loss leader” generate sustainable economic returns for corporations where the main business purpose of employing them was not the actual delivery of medical care?
• For how long will physicians remain motivated to work for organizations where reducing medical expenses or redirecting patient trajectories after their visits — rather than achieving clinical excellence or meeting patients’ actual needs — is the main objective?
• Will physicians seeking influence over the conditions of medical practice eventually clash with corporate cultures, operational control, and human resource policies?

These questions are not entirely rhetorical, and ultimately pertain to corporate culture and the values that underlie it.

Medical education teaches physicians to put patients first, so they are not blindly deferential to authority or accepting of managerial control and do not make “go along to get along” employees. If physicians perceive daylight between their own professional values and the needs of their patients versus the goals of their employers, they will find an attractive array of choices in the coming decade, and see increasing job mobility and earning potential.

Starr doubted that the coming of the corporation would mean the proletarianization of physicians. I agree. Physicians remain the nation’s highest paid profession. I doubt that the creeping unionization of interns and residents necessarily foretells unionization of employed practitioners. That would be a 19th century solution to a 21st century problem.

Employed physicians will have a strong say regarding their professional futures. By exercising their growing market power, they will determine which potential employers deserve their loyalty. Physicians might not return to the position of commanding social and political authority they enjoyed for much of the 20th century, but I see the next decade as a period of reversal of the recent erosion in physicians’ economic power, and perhaps a rising influence of human values in medical care.

Originally published on STAT.