Across the state, family physicians (and other primary care physicians) are finding it more difficult to practice independently because the cost of running their practice is going up while their income from insurance companies and government health insurance programs is not keeping pace.

Private physicians pay their employees first, and take home whatever is left. Their personal income is therefore quickly and directly impacted by an imbalance between practice costs and patient-generated revenue. The more low-income patients the doctor sees, the lower the doctor’s income, so doctors in poorer rural areas have been affected first.

Private physicians with dropping income have a few options. First, they can take fewer vacations and work longer hours. Second, they can supplement their income by joining the military reserves or the National Guard (this option is less popular lately). Third, they can restrict their practice to only patients with higher-paying types of insurance (happening widely in Napa), but there are only so many of these patients to go around. Fourth, they can market expensive, high-tech services and cosmetic services to this small population of well-insured and high-income individuals to keep revenues flowing. Incidentally, this causes inefficient over-utilization of our health care system’s resources. This is also happening to some extent in Napa. These last two strategies will work in geographic locations with sufficient numbers of higher income individuals, but fails in smaller rural communities with higher numbers of poorly insured individuals. Finally, as physician income shrinks, they look at what they can earn in a salaried environment, working a large physician group like Kaiser Permanente or Sutter Health Care, or a state institution like the Veterans Home or the state prison system, and they make the logical economic decision to move to that working environment.

Another option for primary care physicians seeking the security of a salary is to work in the safety net sector: Public hospitals, county health departments and community clinics. Physicians who work in the safety net typically earn slightly less than their counterparts in private groups and significantly less than physicians working for the state. They choose to work there because of a personal commitment to service of the most disadvantaged patients in our community, regardless of their ability to pay. A more complex and diverse patient population with a higher burden of illness means that clinicians working in the safety net have more challenges and stresses than physicians in private practice or in large groups. I think the populations served by physicians at state institutions are more complex as those served in the safety net, but this is balanced by a significantly higher salary scale.

The net effect of all this is rural communities throughout the state have seen all their private physicians leave town in the past decade. Calistoga, Point Reyes, Cloverdale and Winters are four examples in our area where private family physicians have either completely disappeared or are on the verge of extinction. Family physicians nearing retirement might hang on a while longer with declining income, living off their prior savings to keep serving the communities they love. Younger physicians with more options (and usually with a large medical school debt to pay off) are more likely to move on. In those four communities, community clinics have grown to meet the community need and are the main provider of primary health care remaining. In larger communities, (like Napa and St. Helena) the community clinics care for the low-income and poorly insured members of the community, leaving the higher income patients to be served by the private physicians.

The extreme dysfunction of health care financing in the United States has led to this trend; reform of this system is needed to repair it.