Benefits of and barriers to large medical group practice in the United States

Background: For decades, reformers argued that medical groups can efficiently provide high-quality care and a collegial professional environment. The growth of managed care and the movement to improve quality provide additional reasons for physicians to practice in groups, especially large groups. However, information is lacking on recent trends in group size and the benefits of and barriers to group practice. Objectives: To identify benefits of and barriers to large medical group practice, and to describe recent, trends in group size. Design, Setting, and Participants: Information on benefits and barriers was obtained from 195 interviews conducted during round 3 (2000-2001) of the Community Tracking Study with leaders of the largest groups, hospitals, and health insurance plans in 12 randomly selected metropolitan areas. Information on recent trends in group size was obtained from more than 6000 physicians in private practice in 48 randomly selected metropolitan areas via Community Tracking Study telephone surveys in 1997-1998, 1998-1999, and 2000-2001. Main Outcome Measures: Benefits of and barriers to large group practice, as perceived by interviewees, and changes in percentages of physicians in groups of varying sizes. Results: Gaining negotiating leverage with health insurance plans was the most frequently cited benefit; it was cited 8 times more often than improving quality. Lack of physician cooperation, investment, and leadership were the most frequently cited barriers. Survey data indicate that 47% of private physicians work in practices of 1 or 2 physicians and 82% in practices of 9 or fewer, and that the percentage of physicians in groups of 20 or more did not increase between 1996 and 2001. Conclusions: Current payment methods reward gaining size to obtain negotiating leverage more than they reward quality. However, barriers to creating large medical groups are substantial, and most private physicians continue to practice in small groups, although the size of these groups is slowly increasing.