Younger physicians tend to prefer larger practices, while small practice-based older physicians are gradually retiring out of the workforce. A new analysis by Health Affairs shows that physicians continue to shift from working at smaller to larger group practices, with primary care physicians leading this trend. Using information from Medicare's Physician Compare data set, authors David Muhlestein and Nathan Smith examined the rate of U.S. physician consolidation from smaller to larger group practices from June 2013 to December 2015. Physician groups saw significant changes in their makeup during this time, they found. The number of physicians in groups of nine or fewer dropped from 40.1 percent in 2013 to 35.3 percent in 2015, while those in groups of 100 or more increased from 29.6 percent to 35.1 percent during that time. The greatest changes occurred in the smallest and largest group sizes. For example, in June 2013, 22.5 percent of physicians were in the smallest group size (one to two physicians), and 17.6 percent were in the next smallest group size (three to nine). In December 2015 the number of physicians in each group size had dropped to 19.8 percent and 15.5 percent respectively. By contrast, in June 2013, 12.6 percent of physicians were in the largest group size (500 or more physicians), and 17 percent were in the next largest group (100-499). Those numbers had grown to 15.4 percent and 19.7 percent, respectively, by December 2015. There was a pretty wide gulf between primary care physicians and specialists when it came to practice size changes. During the study period, the percentage of primary care doctors in the smallest group size dropped from 24.8 percent to 19.1 percent, while the percentage of specialists in the smallest group decreased from 21 percent to 19.9 percent. In the largest group size, the percentage of primary care doctors increased from 11.4 to 15.9 percent, while the percentage of specialists increased from 14 to 15.1 percent. Muhlestein and Smith said significant technical and financial challenges involved in running a modern medical practice, including the adoption of electronic medical records to comply with meaningful-use requirements -- a driving much of this shift. Larger group practices have more administrative support, which can entice physicians to move to them. Second, with the broad movement toward population-based contracting arrangements, physicians looking to get involved in those arrangements may feel the need to be part of large groups that can aggregate the necessary number of patients. Adding to those factors is that younger physicians tend to prefer larger practices, while small practice-based older physicians are gradually retiring out of the workforce. The authors say evidence is mixed as to whether physician consolidation will lead to better outcomes and lower costs. Decreased competition has been shown to lead to higher prices, for instance, but larger groups have also been found to provide better outcomes and lower population costs. Muhlestein and Smith caution that further research is required. Despite all that, the trend is not yet a death knell for smaller practices. The authors found they still account for a large percentage of physicians overall: Practices with fewer than 10 physicians still represent about one-third of all physicians, they said. Source
