Changes in Physician Practices
Long recognized in U.S. Supreme Court rulings and case law, the states, alone, hold jurisdiction, via licensing, over the practice of medicine, and other licensed health professions. Their unique standings reflect their innate right to protect the health of their constituents which are considered an appropriate matter for regulation by the states.
As a result there is no federal licensing of health professionals and even federal medical facilities employing them have, as basic requirements for appointment to the medical staff, the holding of an appropriate professional degree and current, unrestricted state license to practice.
But, as this article explains, there has been a rapid, significant increase in the settings in which physicians practice as they have transitioned from private office ownership to employment by hospitals and health care organizations which has led to additional administrative procedures and regulations placed upon them. Today, 75% of physician practices are owned or “managed” by the hospitals with which they are affiliated and former practice owners are now employees of the hospitals.
The Affordable Care Act is also leading to additional consolidation and administrative controls with, for example, Accountable Care Organizations (ACOs) forming which are essentially affiliations of health practitioners and their practice sites somewhat akin to HMOs or Preferred Provider Panels but with patients free to see “outside” providers. These ACOs have their own forms of additional credentialing.
As a result, as optometrists begin to shift, albeit not to such a degree as physicians have, from private practices into developing affiliations with hospitals, ACOs and health care organizations they will begin to encounter medical credentialing systems for the first time. Systems that require more than professional degree and license, especially of specialists, will increasingly begin to affect more optometrists.
Optometry specialists are more likely to be affiliated full, or part-time, with health care organizations and to undergo the more complex credentialing processes required at Joint Commission health care facilities.
ABOS exists to advance and support the establishment of optometry specialty boards with the same high standards and requirements set by medical, osteopathic, dental and podiatry specialty boards because these are the standards required for credentialing of specialists at Joint Commission accredited facilities.
Increases of Credentialing and Privileging Requirements
As layers of oversight and regulatory control have been placed over the health professions in the past 50 years by state, local and federal authorities, and the authority to issue licenses to practice them remains solely with the states. The earliest of these additional restrictions started with the credentialing process utilized for appointment and privileging of physicians seeking appointment at medical facilities which began in the 1930’s with the establishment of the first specialty boards for physicians.
Even licensed practitioners who today own private office practices, unaffiliated with medical centers, and do not accept insurance plans, are subject to a range of oversight unknown to their predecessors. Medicare and Medicaid are prime examples along with HIPPA (The Health Insurance Portability and Accountability Act of 1966) and the maze of private health insurance coding complexities.
While the state healing arts licensing boards, including state optometry licensing boards, remain empowered by their legislative bodies to regulate the private practice of each health profession within the parameters ascribed to their profession, private practitioners must still meet a range of additional regulations. While the decisions as to whom may provide what types of health care remain in the hands of each state, and practice scopes are nearly uniform for physicians, those of other practitioners are not, as demonstrated by the differences between optometry practice laws across the US which vary considerably.
Licensing boards are responsible for defining the scopes of practice of each health profession and monitoring adherence of clinicians to regulations such as specified number of continuing education requirements for license renewals, placing restrictions on false claims and advertising and investigation of improper conduct or malpractice. Admittedly, however, licensing boards are not well funded and conduct few, if any, proactive investigations, usually acting only upon complaints.
Until recently, the right to operate a private practice depended entirely upon possessing a valid state license to practice a profession and meeting regulations of local boards of health. In essence, the state in which one practiced was the sole arbiter of profession conduct other than local business and health department regulations affecting small businesses.
Before the widespread development of hospitals, and specialties within the professions, the majority of licensed clinicians were general practitioners in private or small group offices essentially independent of outside supervision or credentialing save for voluntary participation in professional and honorary societies that set codes of conduct and ethics.
Unlike other Guild-derived professions (Church, Teaching, Law and the Military) with defined oversight hierarchies, early U.S. medical practitioners were often “rugged individualists”, serving in relative isolation, enjoying considerable autonomy and able to set fees as they saw fit (i.e., accepting “charity cases” and “tailoring” fees to the patient’s ability to pay’). Few were salaried as public health agencies were frequently absent at the time. The prototype was the country physician making rounds in a buggy for house visits and later Ford Models T and A. Many procedures were performed on farm house kitchen table. Physicians were usually not well paid but were unfettered by regulations and respected.
This began to change at the time of WWI as the practice of medicine became based more upon the Johns Hopkins scientific model of clinical practice as recommended by the Flexner Report at that time which revealed many medical schools and hospitals to be substandard and were closed. Individuals such as the Mayo Brothers began to develop what were to become residency programs in medical specialties at larger urban hospitals as the population began to concentrate around population centers as a result of the industrial revolution.
This trend was well underway by the time of WWII and gained further impetus as returning drafted physicians used the GI Bill of Rights to enroll in specialty residency training programs. This ushered in the flowering of the shift of physicians into specialization via 2 to 5 years of residency training in a specialty rather than serving a one-year internship after the M.D. degree to enter into general practice.
From 1945 to 1980, independent physician practices were in the midst of what many now term their “golden age”. The great majority of physicians owned private offices and held admitting privileges at one or more local hospitals to which they admitted more serious cases as an “attending” physician and treated the patient there or ordered a specialist consultation.
Few physicians were employed by hospitals or the state. Physicians maintained autonomy, choose who became a member of the medical staff and sat on the hospital boards of directors. Fund raising and charitable events to support hospitals were frequently organized by prominent business men, their wives and those of the attending physicians. Most hospitals maintained charity wards to treat those unable to pay for their care and some were municipally charted while others were private.
In this golden era, a physician’s primary allegiances were to local medical societies and the American Medical Association that held considerable sway over how they practiced. As with other health professions at that time, physicians were essentially self governed by the bounds of their professional code of ethics, peer reviews by hospital medical staff committees and various hospital review boards that overlooked the care given specific types of patients (i.e., “tumor boards”). Today only some 14% of physicians are AMA members and local medical societies have lost considerable influence and membership since they no longer have their former impact on the life of today’s physician who is more likely to be an employee rather than a practice owner.
The rapid recent increase in the number of physicians directly employed by a hospital that purchased their practice (to gain fuller control over the health industry via vertical integration) is the main reason for these changes. But another factor driving this change were, and are, the increasing administrative burdens of owing a private practice due to increased oversight and multiplicity of insurance billing procedures, scopes of insurance, and federal regulations that consume ever more of the private practice physician’s time. Some studies have found that of each dollar spent on health care, one-third is consumed by merely complying with these regulations. Physicians have been transformed in some cases to “paper pushers”
Recently, a young physician whose choose to be an employee was asked why and replied he wanted to enjoy the “freedom” of being an employee rather than dealing with all the administrative burdens associated with operating a private practice and its attendant need for administrative staff.
Increasingly, physicians opt to let hospitals deal with such administrative and insurance coding by becoming their employees after selling their practices to them.
In the past decade the percentage of physicians employed by a practice owned by a hospital has risen from about 25 to 75% . In just 10 years employment has become the dominant form of physician practice. In 2012 the great majority of physicians completing residency training became employees of health care organizations rather than practice owners.
Loss of Autonomy from Increasing Commoditization of Medical Care
Prior to the ‘70’s it was considered unethical for physicians, prescriptive drug manufactures and hospitals to advertise. It was as unthinkable for physicians to advertise and market themselves (other than by social relationships) as it was for a church to erect billboards claiming its followers enjoyed superior income, health and happiness as many do today. There were no ads telling patients how to diagnose medical conditions that then asked their physician to prescribe their products. Most pharmacies were owned by neighborhood independent pharmacists (today 80% of pharmacists are employees of national chain drug stores).
In essence the techniques used before to only sell patent, over-the-counter treatments, were now adopted by physicians, hospitals and pharmaceutical corporations.
With the push by the Federal Trade Association to turn health care into a marketplace of informed “customers”, health care became increasingly viewed as a product or commodity for which one buys insurance and then “purchases” based upon how “providers” of health care market and advertise themselves. The term used to describe a clinician, “provider” rather than physician or nurse, dehumanizes clinicians and facilities now train their staff to think of patients as “customers”, speak of “customer satisfaction” and call their clinicians “providers”.
Health care became industrialized by corporations into a commodity marketed as a consumer product. Consumers, due to health insurance, were disconnected from direct payment of health care and its costs grew from about 6% to 17% of the GNP and far outpaced inflation.
The American Academy of Optometry, as one example, once had strict limitations on how Fellows could represent themselves to the public that included having a second, or higher, floor-level for their office and meeting requirements on the size and amount of external office signage. But it felt pressured to remove these rules for fear the Federal Trade Association (FTC) might consider them “restraint of trade”.
Prior to the FTC actions, television did not advertise prescriptive drugs but by the 1970’s, with FTC removal of restrictions on advertising of professional services, medicine and hospitals, health care turned into a large insurance-pharmaceutical-hospital system of corporations rather than a collection of individual practices. And once health care became a consumer commodity it became ripe for being treated as just another consumer product except that the costs of hospitalization and services became masked unlike a free market system.
Since then the impact of increasing specialization has became more apparent as hospitals, for a variety of reasons, not the least of which are concerns over malpractice, begin to establish more rigorous credentialing criteria for becoming a member of their medical staffs and matching clinical privileges with a physician’s training and experience. It became common to expect, or require, a physician specialist be board certified in their specialty and the days of the general practice physician performing more complicated procedures at their local hospitals rapidly receded into history.
This meant that beside the license to practice, a physicist seeking to admit their patient to a hospital came under the scrutiny of their peers and administrators in the hospitals administration. They had to request admitting privileges at each hospital to which they wished to admit patients and undergo a review and approval to gain admitting privileges which carried with them specific limitations on the types of procedures they could perform or prescribe. This scrutiny was not by the state or its licensing boards directly but by non-state agencies that formed, in cooperation with the hospitals, medical societies, and medical schools, to limit treatment of more complex conditions to certified specialists and limit privileges accordingly.
These hospital organizations, of which one became dominant, the “Joint Commission”, today accredits the great majority of state and federal chartered medical facilities. Most states now require state chartered medical facilities to be accredited by the Joint Commission, or other agencies, and it is Joint Commission regulations that hospital credentialing-privileging committees follow.
Next, Medicare and Medicaid, as federal bodies, began to not just set fees for covered services, but to dictate standards of care for each condition and to place regulations on the types of procedures, services, reimbursements and expected length of stays for each procedure or service. These first appeared in terms of Diagnostic Related Groups with each diagnostic entity “entitled” to a certain fee and length of stay and hospitals were penalized for failure to observe them. Then a Relative Value Unit was established for all procedures and services which rank-ordered the fees paid for them.
More recently outside agencies in 2000 began to urge physician specialty boards to cease issuing life-long specialty board certifications and to require Maintenance of Certification (MOC) standards for recertification of specialist every 10 years. At this time physician specialists engaged in a MOC are given a ½% bonus on their Medicare billings although this bonus will probably vanish to be replaced by a penalty for not being in a MOC.
The certification of specialists is still not under state or federal supervision but controlled by independent specialty boards recognized by credentialing-privileging committees at facilities accredited by the Joint Commission and others. The board certification of specialists originally arose, and remains, a tool to assist hospitals in evaluating requests for medical staff membership and clinical privileges. More recently, as a secondary purpose, it is used by private practitioners, and hospitals, in marketing to the public but is not required for licensure.
Coupled with today’s controlling dominance of health insurance companies, preferred provider panels, HMOs and the new agencies of the Accountable Care Act, the average private office practitioner is embedded in a web of state, federal and non-governmental oversight agency regulators rather than the former system of autonomous, independent private practitioners.
There are significant advantages and disadvantages to this system which replaced the tradition of professional independence, codes of conduct and charity wards at hospitals. These are not discussed here except to lay at their feet the reasons physicians are choosing to be employees.
Patients today are bombarded (thanks to the FTC “reforms” in the ‘70’s) with radio, television and signage promoting hospitals, practitioners, legend medications and procedures. The role of physicians has been redefined to that of “providers” in the Agora market place medicine has become.
The Era of Credentialing
Since the increasing majority of younger medical practitioners do not own their practice and are employees, rather than practice owners and “pushed” in a variety of directions by different federal agencies, insurance companies and hospital administrators (who are seldom physicians), credentialing has become paramount to them and their employers.
Whereas once a degree and license on the wall sufficed, today a multitude of “agencies” dictate to “providers” how to deliver your health care.
Below is a simplified list showing how these regulatory bodies impact clinicians.
- General Practitioner of a health Profession: State licensing board requirements for education and annual CME for license renewal and adherence within scope of practice as defined by state, ethics and competence.
- Specialist within a health profession: License + Specialty Residency, Specialty Examination and Certification by a specialty board recognized by medical credentialing committees at accredited medical facilities. Residencies, specialty examination and certification must meet the standards set by non-governmental, independent agencies such as the American Board of Medical Specialties.
- Sub-specialists meet #1 and #2 and serve a Fellowship in the subspecialty accredited by an “academy” or “society” of sub-specialists.
- FDA: Federal registration, FDA registration # and stipulation of types of medications that may be used by different types of prescribers. Approval of drugs for administration to patients.
- CMS: Federal enrollment as a provider and regulations for reimbursement by Medicare and Medicaid that dictates fees and approved services.
- Hospital Admitting privileges: These prescribe extent of allowed privileges and usually require specialists be board certified by a recognized specialty board.
- HIPPA patient privacy requirements.
Other agencies, including local health departments and state-federal departments have regulations for freestanding surgery and outpatient clinics.
In conclusion, once a physician seeks to practice outside their private office, accept private or federal insurance plans, or seeks hospital privileges, far more oversight and differentiation of privileges result and the physician becomes subject to administrative supervision in which the top administrators are usually not physicians but businessmen.
Impact on Optometry Credentialing
By contrast, dental, optometry and podiatry practitioners are less regulated with optometry, by far, the least regulated but having lost of control over fees due to Vision Care Panels the largest of which, ironically, was founded by optometrists. These four professions are still primarily private office based and regulated by their state licensing board, the FDA classification system of pain killers, Medicare-Medicaid and medical or vision insurance plans.
Since the majority of optometrists remain based in private offices and in general practice, most are not fully familiar with the credentialing systems utilized by accredited medical facilities, Joint Commission requirements for accreditation or the manner by which specialists are credentialed at medical facilities based upon specialty board certifications.
But this is gradually changing.
At one time it was difficult for optometrists to gain hospital staff membership or hold admitting privileges but, with the continuing expansion of optometry scopes of practice by state legislations into medical treatment and prescribing that began 40 years ago, the Joint Commission in 1986 introduced regulatory change that permitted optometrists to be appointed to medical staffs and to hold clinical privileges permitted by the medical facility and their state license.
More recently optometrists who have specialized in medical optometry and board certified by the American Board of Certification are being recognized and credentialed as specialists at Joint Commission facilities.
Eleven years prior to the Joint Commission policy change in 1986, optometry teaching residencies and patient services first appeared within the VA federal system of hospitals (Department of Defense medical facilities have commissioned optometrists as officers since 1947).
Today about 6% of actively licensed optometrists practice within VA, DOD, and US Public Health medical facilities, are members of their medical staffs, and credentialed and hold privileges. These O.D.s are familiar with, and subject to, credentialing systems at Joint Commission accredited facilities. (The Joint Commission accredits most federal health facilities.)
But the average optometrist, in general practice at their private office has, so far, remained apart from, an unfamiliar with the credentialing systems associated with hospital practice or affiliation.
The development of physician specialties and board certifications in them was supported by hospital associations and public health agencies for several reasons, but chiefly from the belief more comprehensive and safer care would result from referring cases having higher morbidity and mortality to appropriate board certified physician specialists. Now there is a move to require board certifications to be issued with 10-year expiration dates and a MOC process required for re-certification as a specialist.
Similar specialty residency programs leading to board certification in a specialty also developed in osteopathy and dentistry, and in the 1970s, optometry and podiatry.
The primary force towards specialization in medicine and board certification of medical specialists was, and remains, hospital driven. A secondary force was to better identify qualified specialists to the public although board certification is not required to hold a license to practice medicine. In addition, specialty residents in training (house staff) perform many supporting services in the course of their training which range from 2 to 5 years depending on the specialty and the federal government supports their post-graduate training by supplemental Medicare care fee reimbursements.
Optometrists have not been so strongly affected by credentialing and regulation to the same degree as physicians due to practicing primarily in private offices, rather than medical facilities, and are, as a result, not as familiar with the US credentialing system nor the differences in hospital credentialing of general practice optometrists compared to optometrists seeking hospital privileges as a specialist.
This unfamiliarity was recently manifested by the development of two “board certification” programs for optometrists in private, general practice that do not require residency training or passage of a specialty examination. These “board certification” programs are more accurately described as enhanced “maintenance of licensure” programs for general practitioners rather than specialty board certifications. However, there is a movement towards more rigorous “maintenance of license” requirements under study by the American Federation of State Medical Boards and optometry appears in the forefront of tightening re-licensing requirements.
At this time there is one optometry specialty, medical optometry, equivalent in structure, standards and criteria to those within medicine, osteopathy, dentistry and podiatry.
The specialty of medical optometry began with residency training in VA medical centers in 1975 and progressed by 2005 to establishing a national, written examination testing competence in the specialty and culminated with the establishment in 2009 of the American Board of Certification in Medical Optometry (ABCMO), a charter member board of ABOS.
The specialty of medical optometry is the first to develop all credentialing steps necessary for recognition as a specialty by the US credentialing system at Joint Commission accredited health profession. Since 2001 ABCMO has become recognized and utilized by accredited federal, local and state health care organizations for credentialing specialists in medical optometry.
By its acceptance as a specialty board for credentialing at accredited health facilities, ABCMO requirements and standards serve as the model of the structure ABOS will require of other optometry specialties seeking to become an ABOS member specialty board.
ABOS exists to assist, support and recognize optometry specialties that seek to become recognized by credentialing committees at accredited health organizations.
1. AMA 2012 Physician Practice Benchmark Survey.
2. The Rise of the Employed Physician, Lead Doc. Dec. 18, 2014.
3. Physician Compensation and Production Survey. Medical Group Management Association. 2011.
4. www.Kevinmd.com, issue May 30, 2013.
5. History of the American Academy of Optometry. John Gregg, O.D. Page 127.
6. Hardly anyone is opening their own practice anymore. Why? www.kevinmd.com/blog/2014/12/hardly-anyone-opening-practice-anymore.html December 25, 2014.
7. The Joint Commission. www.jointcommission.org.
8. Types of optometry residencies. www.opted.org/about-optometric-education/residency-programs/optometric-residency-titles-descriptions.
9. Dental specialties. www.ada.org/en/education-careers/careers-in-dentistry/dental-specialties.
10. AOA Commission on Optometric Specialties. Bulletin #106, May 29,1986.