Primary Care as an Afterthought

Internal Medicine World ReportApril 2007
Volume 0
Issue 0

Dr Alper is Clinical Professor of Medicine, University of California, San Francisco, Visiting Scholar, Hoover Institution, Stanford University, and practices internal medicine in Burlingame, Calif.

A financial executive at one of the nation’s largest health insurers looked perplexed when I asked him during a meeting break whether his company was having any problems with primary care. At the time, primary care physicians were among those most up in arms about falling reimbursements based on the company’s sharp (or what he would surely characterize as “astute”) business practices. I concluded that there weren’t enough resignations to command the attention of senior management.

This episode came to mind at a dinner meeting recently. The local chain pharmacy store director seated opposite me described how happy he was with his decision to close his own independent pharmacy and go to work for a bigger player. He no longer worries about rent, salaries, and access to discounts to keep him in business. Instead, he sees himself as now “providing a professional service” free of impediments. His pay had improved too.

The pharmacist’s easy and relaxed manner attested to his satisfaction with his new situation. He was too nice a guy to call smug, but there was indeed a hint of self-satisfaction in the way he spoke. Where had I heard that tone before?

It was from an internal medicine subspecialist in a large clinic who, in an almost professorial way, told me that he was untroubled by most of the concerns that typically preoccupy other internists. The fact that he had “no complaints”—including pay scale— was remarkable, because his subspecialty is cognitive, not procedural, and therefore one in which the greatest number of complaints are usually heard. Both his and the pharmacist’s needs were adequately addressed by their organizations.

So were those of a very dedicated family practitioner who also participated in the dinner group. Like the pharmacist, he too had been in solo practice and gave it up to join a larger entity—in his case, a very large multispecialty clinic. He was delighted with his increased earnings, decreased administrative burden, and feeling of enhanced professionalism.

So what is going on? Is bigger simply better? Or are there other considerations? The pharmacist acknowledged that the business plan of chain pharmacies uses the pharmacy to bring in street traffic. While waiting for prescriptions to be filled, some pharmacies give customers beepers to free them up to shop in the general merchandise sections. Prescriptions can be used as loss-leaders that are more than made up for by the sale of more profitable items elsewhere in the store. (Witness the emergence of $3 copays for generic drugs.)

But has pharmacy itself turned into just another merchandise line? “No way,” the pharmacist insisted. “We provide a service, not merchandise.” (Privately, I wondered whether senior management makes the same fine distinction.) Nevertheless, it was true that he now had more professional interactions with colleagues, greater access to technology and uses it, among other things, to refill prescriptions originating in out-of-state branch pharmacies. All of which translates into a higher level of service, in his opinion and mine.

There is an underlying secret, however. The ability to internally subsidize the pharmacy by using money generated from other product lines and even from the profits of other branch pharmacies provides an advantage that free-standing pharmacies don’t enjoy. There is also a huge competitive advantage in being able to offer loss-leaders. These have to be added to the general value of increased access to capital and economies of scale.

Something analogous is happening in medicine. The self-satisfied primary physician in the multispecialty group has always worked in his group environment. If his group is typical, primary care may function as a loss-leader into the provision of more lucrative procedural services, both diagnostic and therapeutic. And if not a loss-leader, the primary care contribution to the group’s income certainly reflects a lower return on investment (ROI, in economists’ jargon).

Primary care physicians in multispecialty groups may be comfortable with this. After all, no health system can exist without primary care. Besides, primary care also serves as a very efficient internal referral service. This perspective fails to impress many specialists in multispecialty groups, who frequently complain that primary care physicians are unfairly favored, even when their total earnings remain far lower.

Gun-barrel vision is not only the province of specialists. How many primary care physicians in large groups, ranging from the very large Kaiser-Permanente system to individual free-standing clinics, realize that their own salaries and perks reflect, in large part, a marketplace in which solo and small group practice offers other advantages?

Kaiser-Permanente physicians are experiencing greater job satisfaction than their community colleagues, according to at least one study.1 There may even be some schadenfreude involved when distress and disarray among community physicians lead more than a few to abandon their practices and seek jobs with larger organizations. Yet how many of the “winners” see the downside to their apparent victory? Without healthy competition, their position ultimately becomes imperiled as well.

The family practitioner who joined the large multispecialty clinic understands this. Size and prestige win up to a 30% contracting advantage for his group. This money and foundation support is used to provide state-of-the-art electronic tools for his practice. Profits are used to prop up primary care physician salaries. But he does not see these advantages to be either his birthright or immutable.

There is something worrisome when growing technologic and economic dominance cloud the ultimate outlook for primary care (and pharmacy) as free-standing entities. Coincidentally, the traditional advantage of small-scale practice in providing more personal care is eroding under the pressure to work faster, with less affordable quality help and steadily increasing administrative burdens. In addition, the informal networks of tried and trusted colleagues in both medicine and ancillary fields (such as diabetes education or physical therapy), which once made our “cottage industry” much less disorganized than appeared on the surface, have suffered as managed care has limited choice in referrals. Service to patients and the ability to influence performance have diminished accordingly.

Both organized medicine and medical academia have expressed alarm about the future of primary care. More telling, perhaps, is the decline in the percentage of medical graduates who elect primary care residencies to just over 1 in 5, roughly half the traditional number, which itself had been judged inadequate when compared with medical manpower demographics in other Western democracies. In fact, what has happened to all the talk and material support for the goal of making two thirds of future American physicians generalists? The pontificating we heard on that subject now sounds absurd.

Apprehension over the favoring of primary care has led to a steady stream of articles purporting to show the superiority of specialty care for diseases ranging from asthma to Alzheimer’s. The credibility of many of these is suspect because of underlying bias. However, it is harder to ignore studies such as the one showing that consultation with cardiologists correlates with more frequent use of appropriate drugs in the treatment of myocardial infarction.2

Now we learn that practice size is important too. Medicare patients of solo practitioners (who constitute around a third of the nation’s physicians and are more heavily concentrated in primary care) are less likely to survive a myocardial infarction at 90 days than patients of physicians who practice in groups.3 Oddly, the apparent advantage of group practice over solo disappears when practice size reaches 10 or more physicians and applies less to internists than to cardiologists. This information is buried within the text.

So the evidence may be murky, but the favoring of large, specialty-dominated practice is clear. Criticism without corresponding support is corrosive and risks turning primary care into an afterthought. It is doubtful that this would constitute sensible health policy.


Arch Intern Med

1. Chehab EL, Panicker N, Alper PR, et al. The impact of practice setting on physician perceptions of the quality of practice and patient care in the managed care era. . 2001; 161:202-211.

Arch Intern Med

2. Willison DJ, Soumerai SB, McLaughlin TJ, et al. Consultation between cardiologists and generalists in the management of acute myocardial infarction: implications for quality of care. . 1998; 158:1778-1783.

Health Aff (Millwood)

3. Ketcham JD, Baker LC, MacIsaac D. Physician practice size and variations in treatments and outcomes: evidence from Medicare patients with AMI. . 2007; 26:195-205.


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