Patient-doctor relationship is a cornerstone of the quality healthcare system. Yet, only one third of physicians in United States are independent private owners of their practices. Personal relationship, knowing family and social history of the patient and their needs and therefore personalized care is disappearing with the dying small practices.

Let’s use following example to illustrate the importance of this change. Anyone over 40 years old remember their hometown without large pharmacy chains. Local corner pharmacists actually new their customers, advising them on the medication they were taking. If you forgot to ask your doctor a question, a pharmacist that you new and trusted was there for you. Then came the age of large pharmacy chains. Private pharmacists lost their stores and became extinct. The price of the medication supposed to go down with increased private competition and efficiency.  What really happened? Are your prescription drugs cheaper today? Did anyone lately expressed a concern about a number of medications you are taking. NO!!! Without gatekeepers we became drug addicts!! Addicted to prescription drugs!

Can we allow independent doctor’s offices share the same faith?

In his article posted at Clinician Today, Zach Algrin writes:

What’s killing private practice?

The times, they are a changin’. Actually, they’ve been changing for some time. Numbered are the days of the physician-owned private practice as more and more physicians transition into hospital-based careers.

As of 2014, more than 50 percent of U.S. doctors will work in a hospital setting, an almost 75 percent increase from 2000. The trend is expected to continue, with Accenture predicting that by the end of 2016, only one-third of physicians will practice independently.

This movement isn’t entirely new, but the rise of Accountable Care Organizations (ACOs) and the implementation of the Affordable Care Act (ACA) have accelerated it and fundamentally changed the viability of private practice forever.

Why Should We Care?

Simply put, there’s immense value in the relationships built between private-practice physicians and their patients. I’ll use myself and my primary-care physician (PCP) as a prime example: I come from a midsized town with a population of nearly 12,000 residents. My PCP owns his own practice, and it’s the only one in town when it comes to primary medical services. I’ve been seeing him since I was six years old, and I continue to see him nearly 18 years later. He’s watched my growth from a young age and seen my development through annual checkups. It may sound cliche, but my PCP is more than just a doctor; he’s become a trusted adviser, confidant, and even a personal friend. He is an active member of the community and treats the majority of its patients, and I even played soccer with his kids.

This is the rule, not the exception, for many individuals from smaller communities. This kind of relationship is best fostered in an independent-practice setting where many people see the same physician year in and year out. These physicians know their patients on a much deeper level than might be found in a hospital setting, and there’s no substitute for this kind of personalized care.

What Caused This Shift?

Like with many changes in the healthcare landscape, a variety of factors have led to the decline of the physician-owned private practice. This trend largely started in the 1990s as a push to integrate physician practices with nearby hospitals, a movement grounded in the belief that managed care would be the model of the future. That didn’t quite pan out; the demand for managed care dwindled in the late ‘90s, and many physician-hospital partnerships disbanded.

After dismantling these partnerships, many physicians continued their private practices until a spate of legislation beginning in the mid- to late-2000s put increased financial pressure on independent practices. When surveyed as part of Accenture’s study, physicians reported that reimbursement pressures and overhead costs were their two biggest concerns with remaining in independent practice.

Private-practice physicians must often wait a long time to receive ever-decreasing reimbursements, which causes serious strain. Medicaid generally pays physicians less compared to payouts through Medicare or private insurance for the same procedure. Because of higher deductibles (which many lower-income individuals simply can’t afford) and lower reimbursements, some private practices have begun refusing Medicare patients, preferring to decrease the number of patients they see than take on a higher patient volume to make up for lower reimbursements. The latter option, after all, could result in a lower quality of care.

The ACA further compounded this problem because it increased the number of individuals in the U.S. covered by Medicaid. The Obama administration attempted to fix this through increased reimbursement for primary-care providers, but these temporary changes were phased out at the end of 2014. With further cuts to Medicaid reimbursement imminent, it may only get harder for physicians to remain in private practice.

Overhead costs, many brought about through new legislation, have continued to increase as private practices are forced to modernize at costs few can afford. It has become increasingly necessary for physicians to implement costly EMR systems and to comply with regulations such as meaningful use and Physician Quality Reporting Systems (PQRS), or face a penalty of even lower reimbursements. These developments have decreased the time physicians are able to spend treating patients, which puts many providers between a rock and a hard place: they can see fewer patients, decrease their care quality by seeing more patients in the same amount of time, or hire additional staff to lessen the clerical burden.

The rising costs of education have also led to a situation where many new graduates prefer the stability and flexibility that come with working as part of a large hospital system. Medical graduates, 20–30 percent of whom graduate with debts north of $200,000, are now looking for flexible work arrangements, which are much easier to attain in a hospital setting. Saddled with the burden of student loan debt, many graduates are preaching the virtues of a steady paycheck instead of the risks associated with being a business owner. By eliminating the administrative pains that come with owning a private practice, physicians are able to take time off and maintain a family balance, something not possible for many private practitioners.

Expect this trend to continue, as only a small fraction (6 percent) of medical school graduates want to provide care in communities with fewer than 50,000 people, which is where many private practices thrived for generations.

Can Anything Be Done?

We can’t do much without major legislative changes that would make independent practice more viable. Thanks to increasing amounts of bureaucratic paperwork, the hassles of negotiating with insurance companies, and the large debt that comes from a medical education, it’s easy to see why independent practice isn’t the holy grail for physicians like it used to be. Without a major overhaul, there’s no reason to believe this will change. The scheduling flexibility made possible in a hospital setting makes it unlikely that millennial physicians will consider opening their own practices in an age when long work hours and weekend call coverage are seen as increasingly unsavory options.

With an outlook like this, it’s easy to see a future in which independent practice gives way to corporate medicine. In many traditional private-practice settings, physicians spend years, even decades, developing rapport with their patients and gaining an intimate knowledge of their medical history. Physicians make decisions based on their understanding of their patients’ lifestyles and the effects those lifestyles have on their health.

Whether you’re a clinician or an individual receiving care, there’s no substitute for this type of personalized understanding and the long-term relationships it can foster.