Rising practice costs and increased consolidation across healthcare have made it more difficult for gastroenterologists to maintain independent practices.
According to a November 2024 report by Medicus, independent, Medicare-billing gastroenterologists dropped by 58% between 2019 and 2022. Reimbursement rates may play a key role in the decline of independent gastroenterologists — between 2007 and 2022, average GI reimbursements fell by 33%, when adjusted for inflation.
In November, CMS also finalized a 94-cent (2.83%) conversion factor decrease from 2024. The physician fee schedule conversion factor for 2025 is $32.35, down from $33.29 in 2024. Physicians and medical groups have expressed concern over the decrease in reimbursements, saying that year-over-year decreases are proving unsustainable for many.
The Digestive Health Physicians Association released a statement July 16, when the rule was proposed, opposing the cut, saying it "follows years of negligible increases, freezes and a payment cut in 2024."
"This is unsustainable for our nation's medical groups, physicians and other health care providers," the statement said. "The effects of these cuts will be exacerbated in rural and underserved areas, which continue to face significant healthcare access challenges."
The disparity between sites of service for gastroenterology procedures may be pushing gastroenterologists toward employed settings. In an ASC setting, the average colonoscopy costs $925, compared to $1,224 in a hospital outpatient department. Additionally, screening colonoscopies in the U.S. cost a total of $23.7 billion in 2021, the most recent available data for nationwide cancer screening costs.
According to data from consulting firm Avalere, in a study sponsored by the Physicians Advocacy Institute, more than 127,000 physicians moved to employment from 2019 to 2023. Around 78% of physicians were hospital- or corporate-employed by January 2024.
While the number of independent, Medicare-billing gastroenterologists has dropped, they still maintain a strong presence in private practice. Data from career site Zippa found that 88% of gastroenterologists worked in private practice in 2023, the second-highest specialty. Gastroenterologists were also slightly more likely to be practice owners than other specialties, at 42.7% — but how long this trend will continue remains unclear.
"Many young gastroenterologists are running away from private practice," Adam Levy, MD, a gastroenterologist in Macon, Ga., told Becker's. "This is due to the high cost of educational loans and an environment where hospitals are offering large salaries to graduates. It is difficult for private practice to compete upfront due to declining reimbursements."
For those more comfortable with the risk, the payoffs in jumping to private practice could be significant. Healthcare Appraisers' 2023 GI "Industry Outlook" report found that median compensation for gastroenterologists working at hospital-owned groups or MSOs increased 4% over the study period, compared with a 15% increase for those at physician-owned groups.
"The challenge is that each physician is trading in a comfortable [employed] position, albeit with limited autonomy, for potential financial risk," Gabriel Oinescu, MD, a gastroenterologist at Wyckoff Heights Medical Center in New York City, told Becker's. "Keeping a practice open will take more effort to comply with government regulations and reporting, so reducing the burden may help. Eventually, building and monetizing the equity of the practice should be enough to incentivize physicians to seek alternatives to employment."