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HCA Holdings Inc (HCA), Health Management Associates Inc (HMA): Obamacare Shoving Doctors Out of Private Practice

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First went the dinosaurs, then the dodo. Are physicians in private practices next on the path to extinction? The trends show the numbers of physicians practicing privately are steadily dropping. Some blame Obamacare for pushing doctors out the door. Is this accusation based on fact or fantasy?

HCA Holdings Inc (NYSE:HCA)Survey says
A 2012 survey of physicians conducted by the Doctor Patient Medical Association, or DPMA, found that 90% of respondents thought the U.S. medical system was on the wrong track. 83% said that they were actually thinking about leaving the profession. 95% of physicians responding to the survey thought that private practices are losing out to corporate medicine.

Who’s to blame? Nearly two-thirds said the government was the root of most of their problems. Even more identified the best solution as reducing government involvement in medicine.

Keep in mind a couple of things about this survey, though. First, faxes were sent to fewer than half of all active physicians in private practice. Only 4.3% of these surveys were returned. The responses don’t necessarily accurately represent the opinions of physicians nationwide. Second, Obamacare wasn’t specifically mentioned in the questions asked.

However, a 2013 physician survey by Deloitte that did use statistically valid sampling methods appears to confirm some of these concerns, albeit with lesser intensity. This survey found that 57% of physicians think that “the practice of medicine is in jeopardy.” Only 31% gave the U.S. health care system a favorable grade. 62% said that more physicians will retire early because of how the practice of medicine is changing, with around 75% saying that fewer qualified individuals will pursue medicine as a career.

Regarding Obamacare, 44% of physicians think that the law is “a good start” compared to 38% who think that it is “a step in the wrong direction,” with 18% undecided. 93% of physicians are concerned about being paid too little for services performed under episode-based bundled payments, which was promoted in Obamacare. More than half of physicians expect their incomes to fall dramatically over the next three years.

Doctors in the house
The reality is that, regardless of physicians’ opinions about Obamacare, the law is contributing to more doctors moving away from private practices. Health care reform emphasized close collaboration between health care providers through Accountable Care Organizations, or ACOs, and bundled payments. Many expected private physician practices to be acquired with this focus — and they were right.

A 2011 survey by the Medical Group Management Association showed almost 75% more doctors employed by hospitals since 2000. Less than half of all U.S. doctors now work in private practices. An article published in the New England Journal of Medicine attributed acceleration of this trend to Obamacare. HCA Holdings Inc (NYSE:HCA) , the nation’s largest private hospital chain, embarked upon a major hiring campaign for physicians over the last few years. A key impetus behind this wave of bringing new doctors on board came from the ACO emphasis in Obamacare.

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