So let's spend some time talking about how physicians provide services and particularly about the organizations in which physicians work, which we're calling physician practices. These are central to any health care system and taking a look at them gives us essential insights into how healthcare is delivered and also into some key financial arrangements. Practices can be organized in a bunch of different ways. Sometimes, they're organized essentially as independent entities that are privately owned and operated. It can be useful to think of them in this context as businesses providing services and receiving reimbursement. We'll focus on the case of privately operated practices here, and particularly on the kinds of arrangements commonly encountered in the US. But we should also note that in some countries, practices are formed or owned or operated by a government organization. Some of the things that we talk about here would apply in that context as well but some things could be different. Even within the group we're looking at, one can see quite a few different types of practices. Taking a look at some of that variation will be informative, so let's do that. Organizing our discussion by size, we can go from small practices, where at the smallest there would be one physician, often called a solo practice, all the way up to very large physician practices. Sometimes you'll find ones that have hundreds of physicians, maybe even thousands. As we go from small to large, we can see some differences in the attributes of practices. First, as they get larger, we get more likely to call them medical groups or physician organizations in addition to just practices. Another thing that will change, as we move from smaller to larger is the ownership structure of the practice. At the smaller end, physicians commonly own the practice. They may be self-employed in a solo practice or maybe in a partnership where say two or three physicians have gotten together and own the practice together. As practices get larger, we tend to move toward more complex, even corporate ownership structures. Some physicians who work in larger practices could still be owners, but that's less and less the rule as practice sizes grow. What happens instead is that physicians are more likely to be an employee of a larger organization in a role where they're hired to provide patient care. As we go from small to large, we also see changes in management and in staffing and organization of the practice. In small practices, physicians would commonly see the patients and do the management. They would of course hire people, nurses, office staff to work with them, they might use contractors or consultants to help with some services, but they're probably going to be in charge. As we get bigger though, practices tend to have more resources and larger and more elaborate management structures. The physicians who are doing the medical care would be less and less the ones doing the management jobs and leading the organization and the staffing will get more elaborate. Larger practices often develop bigger billing departments. There may be an IT staff dedicated to IT issues, providing more sophisticated, more capable EHRs and other computer and data infrastructure. There might be a marketing department or a legal department, or a human resources department. These things can become big, large, sophisticated organizations. It's not like the small practices aren't trying to do some of these things and some of them do just fine but the bigger practices often just have resource advantages that let them grow bigger operations. As we go from small to large, we're more likely to find multi-specialty practices. Many small practices have physicians who are very similar in the same specialty doing similar kinds of services. Larger practices more often have physicians from multiple specialties. As we get to practices with say 50 physicians or 100 physicians, almost surely that practice will have multiple different kinds of physicians working in the same organization. Another thing is that as we move from small to large, we'll find more and more organizations that will have developed other in-house services. They may have some of their own imaging equipment. They may be able to do some of their own laboratory services, for example, and as we move toward larger organizations, you see ones that started to have multiple locations. We'll often see entities with many different offices located in different places, serving different communities with physicians who are employed by the same organization, but with different locations. Keeping the variety of physician practices in mind is useful as we think about different ways medical care is delivered and as we think about different ways that physicians interact with intermediaries and the ways that funds flow around health care systems.
