As we enter the New Year, we have seen an ever increasing amount of physicians selling their practices to large groups and hospital-based establishments. Soon to be a thing of the past are the solo practitioners who maintained their own independence strictly on their own merit of practicing medicine the way it was designed: to treat the patient with the utmost dignity, respect, and excellent medical care.
Remember Dr. Marcus Welby and Dr. Richard Kildare and Trapper John M.D. and Gonzo? Many of you may not, but for those who do, you will remember how dedicated they were to the needs of their patients and no large groups ever interfered. The patient was the primary focus regardless of finances. Well, welcome to the 21st century and the new law of the land. Keeping politics aside, we all knew that change was inevitable, but to what extent was the question.
What’s next? Let’s examine the root causes and see how we can further prevent the erosion of our smaller practices. What we have seen is the erosion of the payments made to the providers. This all becomes a matter of survival economics, since collections, denials and write-offs still remain as a constant. According to Lisa Zamosky (Medical Economics, April 25, 2013), it is of little surprise that a recent survey conducted by the healthcare staffing firm Jackson Healthcare found that not only are hospital acquisitions of physician practices up (52% of hospitals plan to acquire practices in 2013 as compared with 44% in 2012), the majority of those deals—70%, in fact—are initiated by doctors looking to sell. That same piece showed that top reasons for practice acquisition included: physicians approaching hospitals to purchase their practice, building and maintaining competitive advantage, physician recruitment strategy, accountable care organization formation and improvement of patient safety.
Some of the other advantages of joining a hospital group are the increase in technology costs. With the inception of EMR/EHR, some smaller practices cannot afford the expense of computers, servers and IT professionals, let alone the cost of the software and annual maintenance for technical support and upgrades.
Physicians who join hospital groups can avoid bureaucratic red tape and administrative hassles that keep them from caring for patients. Many of these include administrative and clerical support, legal and accounting concerns, employee benefits, and human resource problems.
Healthcare reform will continue to place pressure on insurance company reimbursements. There are new pressures to follow specified medical protocols to qualify for full Medicare reimbursements, and for those who are not primarily fee-for-service based, this will create a longer term problem without a solution.
Years ago, it was extremely uncommon for physicians to advertise or market their services. Today, you cannot open a newspaper or magazine or turn on the television without seeing some type of advertisement for medical services. Hospital groups have enormous budgets and often market multiple physicians and specialties in a single advertisement. It is virtually impossible for a single physician to compete to the same extent a hospital group does.
So, with all of that being said, how do physicians maintain independence?
- Provide fee-for-service procedures – this includes aesthetic, cosmetic and anti-aging services that are cash based, providing a much more secure feeling of not having to wait for payments from insurance companies. In addition, you never have to worry about rejected claims, revised billing, paying a billing clerk or billing company for collections, and you can eliminate excessive write-offs.
- Eliminate insurance from your practice and become a non-par provider – you can assist patients in the submission of claims but not necessarily have to be a member or participating physician in the insurance network.
- Integrate concierge medicine into your practice – charge an annual fee for your patients to see you. You do not have to count on insurance carriers for payment of individual patient visits. You can have limited office staff and pick and choose your own hours. You remain an independent physician.
- Establish a hybrid concierge medical practice – you have the option of having a hybrid practice and still accept insurance for other type of procedures you perform.
- Form a smaller group of established physicians who also want independence – collectively form a group (same or multi-specialty) where you can pool expenses and/or co-share medical space. This may significant reduce expenses and make up for the shortcoming of insurance revenue.
- Hire a professional public relations or marketing staffer or team who knows how to set you apart from the rest – in other words, how do you stand up in the industry over your competitors? Are you marketing your name, specialty and offer something different than your colleague? A marketing firm can market you more efficiently.
- Create a website to stand out in your field – have a professional who only deals with medical practices. Continuous monitoring and search engine optimization (SEO) also needs to be updated on a regular basis.
Decisions like these should not be taken lightly. The advice of a practice management consultant, an accountant and an attorney specializing in healthcare law should be entertained. Things change rapidly and yesterday’s news is just that.