How many physicians does it take to make a practice?

A study comes up with a number, but doctors say the real answer is often, "it depends."

By Leigh Page, AMNews staff. April 9, 2001.

What is the optimum number of doctors in a physician practice?

That's a question many physicians have wrestled with. Now the Medical Group Management Assn. claims to have an answer: 10.

Meanwhile, doctors who once worked at the 140-physician Nalle Clinic in Charlotte, N.C., which closed last year, have another answer: whatever size makes you happiest.

MGMA says its data, released in a recent study, are based on hard numbers. The Nalle doctors say their conclusions are based on hard knocks.

Jerry Holleman, MD, the Nalle Clinic's former president, said there are too many variables to pinpoint an optimum group size. A lot has to do with the market, he said. It so happens that small practices in Charlotte happen to do well.

"There is a shortage of doctors here," he said, "so if you come to town and hang out your shingle as a solo, you'll make it."

That's good news for Nalle's former associate medical director, Lee Guice, MD, who opened a solo urology practice and thinks solo is the way to go. But Dr. Holleman, a general surgeon, joined a large practice, the 36-physician Sanger Clinic in Charlotte.

In his MGMA study, Jonathan D. Ketcham, a PhD candidate at Wharton School of the University of Pennsylvania, said he found significant declines in efficiency in groups when they grew larger than the 10-physician peak. To get a measure of efficiency, Ketcham divided total operating costs by relative value unit billed by the practice, to account for work done by nonphysicians, he said. [...]