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The Demise of Private Practice Neurology
Death by a Thousand Cuts

By 2015, many of the 45 percent of neurologists who work in private practice today may be out of business. The financial demands of keeping up with regulatory requirements and the looming salary decline due to loss of consultation codes, among other cuts, may be too much for neurologists who practice in groups (20 percent of all US practicing neurologists) and certainly for those practicing solo (18 percent), to bear.


PRIVATE PRACTICE neurologists are being increasingly squeezed by new regulatory demands, requirements for electronic medical records, and a looming salary decline due to loss of consultation codes.

“The threat to private practice is a death by a thousand cuts: an accumulation of economic and regulatory burdens that includes changes in the patient quality reporting initiative (PQRI), health information technology (HIT) meaningful use standards, data transmission standards, HIPAA, and ICD-10,” said Neil A. Busis, MD, chair of the AAN Medical Economics and Management Committee. “Doctors who want to survive reimbursement losses as well as these monumental requirements will need to pay attention and stay informed,” he added. “We can't fly by the seat of our pants anymore, the margins are too thin.”

The drift away from private practice has already begun to transform the landscape of medicine. In a report by the Medical Group Management Association that made the headlines in the March 25 issue of the New York Times, as recently as 2005 more than two-thirds of medical practices were physician-owned — a share that had been relatively constant for many years — but by 2008, that share had dropped below 50 percent, and the slide has continued. Indeed, there are more and more anecdotal reports being circulated of neurologists closing down shop and accepting salaried positions with hospitals, academic centers, and Kaiser-style multispecialty groups.


When Kenneth A. Harris, MD, who had been in solo practice for 25 years in Sun City, AZ, heard a lecture about the upcoming changes in medicine in May 2008, he understood that there was no future for him in his medical community and that he needed to make a change. “It was fairly clear that what little practice income I had was going to be cut 40 percent by 2014 or so, and that there would be increasing rules and regulations that would make continuing in practice impossible,” he said. He was also upset at the devaluation of the doctor-patient relationship. “Patients of up to 25 years were being admitted through the emergency room by doctors who didn't bother to check with me, to neurologists who might or might not give me a call the next day,” he said. He had never joined managed care plans and witnessed costs going up and reimbursements falling until very little was left for take-home pay. “My practice dwindled and eventually I pulled the plug,” he said.

Dr. Harris began working as vice chair of neurology at the Phoenix Veterans Administration Hospital in November of 2009.


Danielle S. Cherdak, MD, worked as a general neurologist near Nashville, TN, for about four years along with two other neurologists and a nurse practitioner when she first started practice. Although her group was part of a larger multispecialty clinic, it struggled financially. A year ago, she accepted a position as assistant professor in the General Neurology division of Vanderbilt University. Vanderbilt had been a great resource to Dr. Cherdak when she had practiced in the community, and she had come to know some of the physicians through attending grand rounds and exchanging e-mail communications. As it turned out, there was a need both for a general neurologist and an autonomics physician (her subspecialty).




Joining larger networks has also allowed some neurologists to re-evaluate their practice focus and styles. Ira N. Chang, MD, worked as a solo practitioner between 1999 and 2005, sharing overhead with another neurologist in the Denver area. But she felt isolated in the office and found that the administrative responsibilities of outpatient practice were labor-intensive and the overhead daunting. There were frequent call issues and it was difficult to take time off. So, in 2005 she shifted her practice to full-time in-patient care. In addition, she accepted a position as medical director of acute neurological services at Swedish Medical Center, a private hospital in Englewood, CO, for which she receives some additional guaranteed money. The practice, which has grown to seven neurologists dedicated to either in-patient or out-patient neurologic care, has a financial relationship with the hospital to provide stroke call and telemedicine.

Dr. Chang has found the transition to in-patient work more satisfying and she enjoys being more interactive with colleagues from other specialties.

Jeffrey L. Benjamin, MD, a general neurologist with an expertise in botulinum toxin chemodenervation, saw his income decline over the 13 years he was in private practice with two other neurologists in Carmel, NY. “The final straw was the impending dissolution of my group because of loss of a significant portion of our referral base to multispecialty groups,” he said. In October 2008, he left to work at New York Methodist Hospital in Brooklyn, a teaching hospital where he is a full-time faculty member and has a mix of hospital and faculty practice responsibilities. He is a medical director of the stroke program there and travels to three community-based satellite offices. Although he now only has half the amount of call that he had in private practice, the calls are much busier. “I was lucky to have some contacts and several opportunities available to me when I took stock of my situation and decided that it would be better to relocate myself to a new situation,” he said.

But there are trade-offs for others who have left practice. Although Dr. Cherdak is now able to spend more time with patients with autonomic disorders, which she considers a unique opportunity, the acuity level of her patients has increased by several notches. This means that she is unable to follow up in person with patients who come from long distances away as readily, and spends more time answering e-mails and telephone calls, filling out paperwork, and making remote care decisions. But she has only a fraction of the call responsibility as beforeand considers that a big perk. “Even when I'm on call we have phenomenal residents here so much of the grind is alleviated,” she reflected, adding: “The time spent interacting with residents and students has been the most satisfying aspect of this move.”

Coming to the realization that she had no choice but to leave private practice was somewhat of a disappointment to Dr. Cherdak, who misses ‘shooting the breeze’ about local events with neighbors who are also her patients. “I had come into private practice with every expectation of creating a good lifestyle for myself and my family, and contributing to the community in which I had traveled a long way, both literally and figuratively, to live. Having to let go of those expectations was disappointing,” she said.

Dr. Harris, too, admits that the transition has been bittersweet. There has been a big learning curve in leaving private practice as he had never been an employee before, never used an electronic medical record, or worked by the clock. He also hated having to say good-bye to his patients, including a 98-year-old patient who had been under his care for 15 years. Although he assured her that he had chosen the best neurologist for her, that her medical care was being coordinated, and that she could be in touch with him if she had any questions, she looked up at him from her wheelchair, burst into tears and asked, “Who will take care of me?” •


  • Health Information Technology: Although the criteria are still being developed, those who don't invest in an electronic health record (EHR) and demonstrate meaningful use by the beginning in 2015, will face penalties in the form of reductions to their Medicare fees schedule reimbursement rates. The penalty will equal 1 percent in 2015, 2 percent in 2016, and 3 percent in 2017 and each subsequent year. Although there are currently incentives for Medicare providers who comply including an up to $44,000 payment over a five-year period (2011–2016), this will hardly offset the initial expense of investing in new hardware and software and costs of implementation and annual licensing and maintenance.
  • E-Prescribing: Even earlier, there will be penalties for not e-prescribing: a reduction in Medicare reimbursement by 1 percent in 2012, 1.5 percent in 2013, and 2 percent in 2014.
  • Physician Quality Reporting Initiative: Quality reporting will come with its own price tag, be it the form of registries or add-on modules for EHRs. And to further obfuscate the matter, it's not entirely clear how PQRI measures will conform to maintenance of certification and maintenance of licensure quality reporting requirements. One thing that's clear is that all this data collection will be beyond the scope of most of today's private practice managers, especially those without in-house full-time IT support, compliance officers and quality officers.
  • Fee-for-Service: Be on the look-out for three unique pilot projects for health care reform that may replace the current fee-for-service structure: The Medical Home,; Accountable Care Organizations,; Bundling,