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Neurologist Scott Tzorfas discusses his article “The crushing bureaucracy that’s driving independent physicians to extinction.” Scott shares his firsthand experience as a neurologist in private practice for three decades, where endless pre-authorizations, insurance denials, and regulatory burdens have eroded the physician-patient relationship. He explains how excessive rules and third-party interference have pushed many doctors to sell their practices or retire early, leaving patients with fewer choices and longer wait times. Scott also highlights his petition calling for policymakers to roll back unnecessary regulations and restore the autonomy of independent physicians. Listeners will take away a deeper understanding of how bureaucracy impacts patient care and why protecting private practice is essential for the future of American medicine.

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Transcript

Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast. Today we welcome Scott Tzorfas. He’s a neurologist. Today’s KevinMD article is “The crushing bureaucracy that’s driving independent physicians to extinction.” Scott, welcome to the show.

Scott Tzorfas: Thank you for inviting me. I appreciate this opportunity.

Kevin Pho: Let’s start by briefly sharing your story, and then we’ll talk about your KevinMD article.

Scott Tzorfas: All right. First, I’d like to give a little background so you can understand why I’m an independent physician and why I think it’s important to preserve physician autonomy. I grew up on the Jersey Shore and was always very independent. In high school, I had a poor science background. I literally had to teach myself science, chemistry, and physics in summer classes at community colleges and a university. My father owned an independent pharmacy, which is quite uncommon today. When I was a young boy in the early to mid-1970s, I always worked in his store.

Back then, there was a program called the Pharmaceutical Assistance for the Aged. You had to fill out an onion skin, a carbon copy, and send it to the state to get paid. I filled it out correctly, but I think I forgot to put his $2 fee so that he would get paid for that prescription. He said to me, “Listen, I don’t work for nothing,” and that has stayed with me my whole life. I have negotiated with insurance companies for 25 years with that philosophy.

I started my own practice with very little help. I have been an independent solo practice doctor for 30 years, and this independence has been very important to me. It has really helped me. I started my practice from scratch at a time when referrals were key. I worked at three local hospitals and I built up my referral base, but I always worked in the office. Now it’s a 180-degree difference. Most of my referrals come from the internet and Google. I’m involved in every aspect of my practice, not just being a good neurologist. Fifty percent of my time is running this business.

For several years, I’ve been active in trying to preserve physician autonomy and improve patient care. I have a Substack article as well as articles and videos on the internet. I even drafted an executive order to help immediately increase the number of private practice doctors. I’ve been on radio and TV shows. My KevinMD article discusses the crushing bureaucracy that is affecting private practice physicians, but before I discuss the article, I think it’s important to give some background on this problem that has led to such a dramatic drop in private practice physicians. Because of this reduction, there are wait times of more than six months to see a specialist near me. In Philadelphia, at big university hospitals, there’s literally a wait time of almost a year for some neurology subspecialists.

Fifteen years ago, 75 percent of doctors were in private practice. Now, only 25 percent are in private practice. That’s a huge shift. In 15 years, the AMA will give you a figure of 43 percent, but that includes very large private practice groups and some private-equity-backed private practices, which I don’t think is true private practice. Doctors now work for large health care systems, hospitals, and corporate entities, and this is called vertical integration. This was started during the first part of the Obama administration. I believe it was intentional, to drive doctors out of private practice and into hospitals. This was done through increased government regulation and decreased reimbursement to private practice doctors. The largest motivation is profit, and this undermines competition and drives prices higher.

I can give four reasons. Number one, hospital physicians earn more than their private practice counterparts. I think this is the biggest reason. It depends on the CPT code or service offered. For office visits, hospitals earn two to three times more for the same visit than a private practice office. Hospitals earn a facility fee on top of the professional fee. For echo and MRI, it’s three to five times more. People follow the money, and doctors, unfortunately, are no exception. Where I am in New Jersey, literally 5 to 10 percent of cardiologists are in private practice.

Number two, MIPS and MACRA are acronyms for government regulatory requirements which were started in the beginning of the Obama administration. Clinicians didn’t sign up to be data entry clerks. We want to heal, to innovate, and to connect with our patients, not to chase arbitrary scores that don’t impact the people we care for. This regulatory burden was the start of private practice physicians leaving to join hospital and large corporate entities or retiring. To many people, it doesn’t enhance patient outcomes. When a patient sees me, I give them my full time and attention, and I can do this because I control my practice.

The other thing I just want to briefly talk about is something called the Misvalued Code Initiative, also started around 2013. Fees were slashed over 50 percent for many procedures. Reimbursements for echocardiograms were severely reduced for cardiologists in private practice. That’s the main reason why cardiologists left private practice at that time. I do a procedure called an EMG, which looks at nerve and muscle. My fees were reduced over 50 percent for that procedure. This Misvalued Code Initiative affected small to medium private practices. Hospital-employed physicians were often shielded somewhat because their overall compensation could be adjusted internally, and hospitals could absorb some of that revenue reduction. Private practices understandably had less flexibility.

Number three, a complete lack of physician autonomy. There are immense regulatory and administrative burdens such as EHR mandates and pre-certification and authorization requirements. I can talk about more of that in a second. Number four, which is very distressing to me, young doctors are not offered the ability to explore private practice options. They’re not encouraged, and the system is not there to support them. We need to change that.

Kevin Pho: You said that 50 percent of your time is spent on administrative tasks. Tell me about your typical day. How do you balance both what you do clinically with the administration you’re talking about in managing an independent practice?

Scott Tzorfas: I have a day set aside just so that I can do the things that I have to do. My office, I’m really a dinosaur, Kevin. I’m so small. It’s just me and my wife in the office. I see the patients, but I have to decide what types of patients I see. You have to balance these things. Patients might have a large deductible or a large co-insurance; those are the kinds of things that if you work for a hospital, you don’t even think of. You have to pay the bills.

Those administrative tasks, I can talk about in a second. In the past three months, I had to change my billing software. The billing software I had for over 20 years was bought by private equity, and I just didn’t want to go that route. My QuickBooks had completely changed; I had to do that. And my phone service, I had to change to internet phones. So that’s just an example of something I had to deal with in the last two to three months. But I really feel the positives always outweigh the negatives.

Kevin Pho: And certainly, I want to explore more about why you do what you do in independent practice because, like you said, only a minority of physicians are entering independent practice these days. Your KevinMD article talks about this crushing bureaucracy that’s driving independent practices to extinction. For those that didn’t get a chance to read your article, just briefly summarize and share what it’s about.

Scott Tzorfas: I talk about how pre-certifications and authorizations crush private practice doctors. The AMA did a survey that showed the typical office does 40 prior authorizations per week. My office spends hour after hour getting simple tests and medicines approved. Even simple headache medicines need prior authorizations, as do generic medications, which even five years ago, you didn’t have to get. All MRIs need prior authorization. I can’t function as a neurologist without an MRI. For some of the private or commercial insurance near me, I cannot get an MRI of the cervical spine. I can’t tell you why. They’ll do a lumbar spine, but they won’t do a cervical spine. When you think about it, a cervical spine can cause a lot more problems if you have a myelopathy or compression of the nerves in the spinal cord. It doesn’t even make any sense.

Large hospitals can handle this kind of paperwork; small practices can’t. This regulatory burden really is huge. I have to constantly click off boxes to conform to quality metrics for MIPS. We also get billing audits every day through the fax. In my article, I have a link that your audience can click on to sign a petition that talks about all of this. It has over 300 signatures and has been viewed 24,000 times. I want to bring this petition to policymakers. I’ve applied to the Federal Healthcare Advisory Committee, which is a 15-member panel that Medicare has started. They’re going to make their decision in a month, and we will see what happens. But I want to have a seat at the table. I want to represent small private practice physicians. We should be doing the right things for patients, not for big pharmaceutical companies and not for corporations. The concentration of corporate power is really killing America.

I just want to mention one part of the Affordable Care Act. There’s a perverse incentive due to the ACA. The ACA limits insurance profits to 15 to 20 percent of premiums, but that’s a percentage, not a dollar cap. If premiums go up, insurers make more money. In other words, higher premiums can actually increase profits while staying legal, which partly explains why ACA costs keep climbing. I could never understand why insurance companies want to pay hospitals more money, and it’s because if they pay them more money, then they can charge more in premiums, and then the insurance company can make more.

Kevin Pho: One of the things about pre-authorization is that a lot of the decisions and denials come from physicians not even in your field, and sometimes they’re not even from physicians at all, right?

Scott Tzorfas: Yeah. I think a lot of them are from AI at this point. It’s really automatic. It almost doesn’t matter. They want my notes. I don’t think it matters a lot of times what’s in the note. It is, to some extent, automatic. If you’re in a small private practice, you can’t stay on the phone. You can’t talk to people. You used to be able to talk to a doctor as part of the insurance company and you would get an authorization number. It was really that simple. Now, I won’t mention the insurance company, but they’ll only do a consult. So even if I got on the phone, the person tells me, “Well, this is only a consult. I can’t approve it.” This is the red tape that you go around in circles with insurance companies.

Kevin Pho: Now with all these obstacles that you mentioned, whether it’s pre-authorization and sometimes the difficulty finding patients and referrals and the administrative work, why do you still do independent practice after all these decades? What prevents you from, say, selling to private equity or joining a hospital group? What keeps you going in independent practice?

Scott Tzorfas: Fifteen years ago when all this started with the Obama administration, I really dug my heels in. The AMA and the American Academy of Neurology really didn’t support private practice doctors. I remember the American Academy of Neurology, when all this was going on 15 or so years ago, they said, “Maybe you should join a hospital so you can get your referral base.” I mean, can you imagine that that was the support that I got?

I took a gamble, but as I said, with the internet and Google, I am busier now than I was 15 years ago. I think it’s important to have control over your own practice. Like I said, I don’t click off boxes. I look at my patients; they have my full attention and time. I talk to patients who go to a lot of these large hospital clinics, and that’s not always the case. I don’t want to say that big hospitals give bad care; I’m really not saying that. But patients should have the choice. Doctors should have the choice of what kind of care they receive. A lot of patients really want to come to my office. They want to know they only see doctors in our office and not somebody else in that seat. For me personally, and I think for young people, it’s true, Kevin, that if you just encourage young people, they would want to be entrepreneurs. I think that’s part of the American or human spirit, to be an entrepreneur. You just have to encourage them and give them the support.

Kevin Pho: One of the things you mentioned earlier is that a lot of physicians in residency don’t get a lot of exposure to independent and private practice, and sometimes that skews their decision to stay in large hospital systems because they’re just not aware that there’s another world out there. Right? How do we remedy this? How can we get more medical students and residents aware of the private practice model and maybe have some rotations to get them more exposure to that model?

Scott Tzorfas: I’ve given this a lot of thought. My son is in medical school. He has a friend that wants to go into private practice, and I’ve counseled him about that because they don’t get any of that exposure. I don’t know if a nonprofit would help. I don’t know if enough people would support a nonprofit. I think it would start with the medical schools, and I think this administration would have to understand the problem and want to… well, first, the doctors left because hospitals were paid more money and because the administrative tasks were made too burdensome.

I think just partly if you reversed all that and at least paid private practice doctors equally, that would help. If you gave them a tax incentive, like the qualified business income tax deduction, and you applied that to doctors, all these incentives, if you reverse them… but you’ve got to get the medical schools to want to do that, and they don’t. They’re so focused on their mindset and what they do. That is the most challenging problem. But intrinsically, I think you get about 20 percent of medical students, I think easily would do it. When I finished my residency, I think it was like two-thirds were going into private practice. All the incentives changed. I think if you change the incentives back to where they were, people will follow that path. As I said, people follow the money.

Kevin Pho: Speaking of money, let’s talk about private equity. Across fields, whether it’s emergency departments or gastroenterology practices, practices across specialties, private equity is buying up these independent practices. For these physicians, rather than fight this administrative battle that we talked about here, they’re just selling to private equity and taking the money. So talk to us about what you think about that trend and the implications for that for both doctors and patients going forward.

Scott Tzorfas: Probably older doctors who were going to retire, I would imagine that was a decent amount of people selling their practices to private equity. I think it’s a matter, again, of reversing those incentives. Now let’s talk about one aspect: repealing restrictions on physician-owned hospitals. Doctors should be able to own their own hospitals and MRI machines. You want to reduce the burden financially and administratively for doctors to own their own surgery centers.

Near me, there were a couple of surgery centers, but because of this administrative burden and the financial incentive, they sold it. It would be a long process, but physician ownership, and this has been shown in physician-owned hospitals, incentivizes efficiency, quantity, and lower overhead, all of which helps to reduce the overall cost of care, especially for elective and specialized procedures. The answer I can give you to this is site-neutral reimbursement. Level the playing field. This will also save Medicare billions of dollars; that’s been shown. There have been studies that show that. Medicare payment of physicians is not keeping up with inflation. If you look back to the year 2000, doctors are earning a third less when you incorporate inflation.

I wish people didn’t give up so easily. Like I said, I didn’t give up easily. But I think there’s a way out of this if you incentivize people to join private practice. The reality is the wait times are huge. When I say six, nine months, a year, my local hospitals are almost six months booked. People are looking around the internet. You’ve got to get more doctors into the system, and that’s how you do it.

Kevin Pho: We’re talking to Scott Tzorfas. He’s a neurologist. Today’s KevinMD article is “The crushing bureaucracy that’s driving independent physicians to extinction.” Scott, let’s end with some take-home messages that you want to leave with the KevinMD audience.

Scott Tzorfas: I think the biggest is to be convinced of your convictions. There isn’t any amount of money you could give me to join a large health care entity or hospital. Like I said, I have an intrinsic entrepreneurial spirit. Many patients want to see small private practice doctors, and if you don’t like working for a hospital or large health care system, there is a way out of this. You had a podcast of a woman who actually helps private practice doctors, so that’s a way people can help you. You can really do it on your own if you start slowly. I think the other take-home message is we want to get young people encouraged to join private practice. Lastly, one thing I want to say is failure is OK. We’re always taught about success. I think failure is what shapes who you are and what you need and how to change.

Kevin Pho: Scott, thank you so much for sharing your story, time, and insight. Thanks again for coming on the show.

Scott Tzorfas: All right, my pleasure.