Becker's ASC Review

10 ASC MANAGEMENT Stark law, consolidation and the rise of the 'defensive' physician By Patsy Newitt B etween regulatory oversight, payer demands and hospital-driven consolidation, physician autonomy in clinical decision-making has steadily eroded. Niazy Selim, MD, a private practice GI surgeon in Lake Charles, La., told Becker's the current healthcare system leaves physicians practicing medicine "with their backs against the wall" amid the growing pressures of consolidation and administrative burdens. The data reflect this shift. About 108,700 physicians left private practice for employment between 2019 and 2021, according to a report from Avalere. And physician dissatisfaction is rising: 56% of employed physicians said what they like least about their job is less autonomy, according to Medscape's Employed Physicians Report 2023, up from 48% the year prior. Dr. Selim's career spans international training, U.S. academic medicine and private practice. In academia, resources were abundant and research thrived. But private practice, he said, revealed the "ugly piece of medicine," with hospitals increasingly structured to protect their own financial interests rather than facilitate optimal referrals and patient care. "Hospitals cater so much to protecting themselves. I found it very awakening," Dr. Selim told Becker's. Between 2013 and 2022, the number of hospital-employed physicians rose by 33%, from about 157,000 to more than 205,000. In contrast, private practice employment grew by only 17% over the same period, according to a May 13 report in the Journal of the Society of Laparoscopic and Robotic Surgeons. Many employed physicians believe corporate ownership reduces their clinical independence. According to a survey from NORC at the University of Chicago, 61% of employed physicians said they have moderate or no autonomy to make referrals outside their system, and nearly half (47%) said they adjust treatment options to reduce costs based on organizational incentives. For Dr. Selim, the challenge ties directly to Stark law. Originally written to prevent physician self-referral and financial conflicts of interest, the law now functions in a landscape dominated by consolidation. While intended to protect patients, he argues it often protects corporate systems instead. The law exacerbates pressures on employed physicians. According to Dr. Selim, many of his colleagues report that hospital administrators review their referral patterns. Physicians are expected to keep patients within the health system, even if that means denying those patients access to the most qualified specialist. Across the country, physician leaders are calling for reform. Organizations like the Medical Group Management Association have labeled Stark law a "major regulatory burden," and bipartisan lawmakers have begun floating reforms, including a 2024 House bill to expand in-office exemptions. The constraints don't end with referrals. Physicians now practice "defensively," Dr. Selim said, every prescription and test must survive pre-authorization, insurer rules and administrative review. The burden extends beyond referrals. Physicians now practice "defensively," Dr. Selim said, factoring pre- authorization, insurer requirements and administrative review into every clinical decision. On average, physician practices complete 39 prior authorizations per physician, per week, according to a survey from the American Medical Association. Additionally, physicians and their staff spend 13 hours each week on prior authorizations, with 40% of physicians having staff who exclusively work on prior authorizations. "It is terribly costly in my practice with staff's time and my time spent justifying to a non-clinical person why I have ordered diagnostics or medications," Frederick Hoenke, MD, family medicine physician and geriatrician of Marquette, Mich.-based Lifepoint Health, told Becker's. "It is a major frustration." The economics of independent practice are another major driver of consolidation. Among independent physicians who sold their practices in the last decade, 70.8% cited inadequate payment rates as a major factor. Additionally, according to the AMA's Physician Practice Benchmark Report published May 29, 64.9% cited the need for access to expensive resources, and 63.6% cited the administrative burdens and payer regulations as leading reasons. The economics and bureaucracy of solo practice are pushing physicians to exit. Dr. Selim argues that private insurers, operating with minimal oversight, have accelerated the trend. "Physicians have been practicing defensively for 15 to 20 years," he said. "The data will play out over time." n

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