BUSINESSPractice size trend: small to big, then small once againSome physicians who got caught up in the 1990s merger mania are returning to the solo and small group practices from whence they came.By Mike Norbut, amednews staff. Nov. 4, 2002. After 15 years, Ruth Hoddinott, MD, and Jeff Gee, MD, got tired of following a trend toward ever-larger practices. But in deciding to go back to their roots as a two-physician group, it turns out they're following the latest movement: leaving a big group for a smaller practice. Most doctors are still in groups of three or more, but recruiting firms and consultants around the country have noticed a shift toward one- and two-doctor practices, a movement led by primary-care physicians who have learned firsthand that a bigger practice is not always better. The number of doctors placed in group or hospital settings has declined 14 percentage points during the last five years, while those taking jobs in solo, partnership or association settings -- in which doctors pool space and equipment but don't share revenue -- increased by the same level, according to Merritt, Hawkins & Associates, a staffing and recruiting firm based in Irving, Texas. The firm conducts an annual review of the placements it facilitates each year, with last year's sample numbering about 2,200 physicians. The number of physicians placed in two-person partnerships increased from 9% in 1997-98 to 22% in 2001-02, while physicians placed in group settings dropped from 53% to 41%, according to the firm's statistics. "They're shifting away from the economies-of-scale approach, which hasn't played out too well," said Merritt Hawkins spokesman Phil Miller. Solo start-ups have "probably quintupled over the last three years," said Keith Borglum, vice president of Professional Management and Marketing, a consulting firm based in Santa Rosa, Calif. The trend seems to mirror the plateauing of capitation as a payment form and consumers' shift away from the most restrictive HMO plans.
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