It’s no secret that independent medical practice owners are struggling more than ever before with the business aspect of running their practices, and trends show that more and more physicians are thus opting for the greater financial security and administrative simplicity of employment with hospital systems, insurance companies or larger multi-specialty groups. For those who are hanging on to the autonomy of independent practice, what will the future look like?
Recent studies from the Medical Group Management Association (MGMA), Accenture and Merritt Hawkins have highlighted the decrease in independent medical practices and corresponding increase in the number of physicians that are employed with healthcare systems. Administrative headaches and costs for practice owners, declining reimbursement, increased regulatory requirements and pressures from a new emphasis on accountable care are all factoring into this trend. What’s more, doctors are frustrated as they work the same number of hours, but for less money as a higher percentage of their time goes to administration or uncompensated care – up to $25,000/year for a majority of physicians, according to 2012 research from the Physicians Foundation.
It’s not just the lure of a simpler existence that is pushing independent docs to close up their shops. According to a Deloitte study conducted earlier this year, six in 10 physicians predict that their peers are going to be retiring earlier than planned in the next one to three years. Those that are retiring out of private practice may not be replaced, either. Nearly one third (32%) of new residents coming out of medical school would prefer to be employed, compared to 22 percent just three years earlier, as indicated by Merritt Hawkins 2011 study about compensation preferences.
The combination of fewer available doctors in the system, along with an aging population that requires more care, and the anticipated increase in patient visits as more people access the system due to healthcare reform mean that physicians who do choose to remain in private practice are being pushed past their limits. Something has to give. Unfortunately, it seems that the “something” is likely to be physicians’ ability and/or willingness to offer the access and service to which patients have been accustomed. The Physicians Foundation research found that more than 50 percent of doctors “have reached a tipping point” and plan to make changes to their practices in the next 1-3 years that will reduce their accessibility to patients. The survey, which included responses from more than 13,000 U.S. doctors, uncovered that physicians are seeing 16.6 percent fewer patients per day than they did in 2008, which may translate to the reduction in millions of patient visits if the trend keeps up.
While financial stability is important, many physicians did not enter the business of medicine solely to make a buck. Ultimately, they are worried about the well being of their patients. Those who want to remain independent are recognizing the need to consider alternate ways to practice so that they can stay afloat financially without compromising patient care.
In Hello Health’s recent webinar, “The New Business of Healthcare,“ Accenture’s Richard Fu reviews some of these and other issues related to the future of independent practice, and highlights the findings from his firm’s 2012 Physician Alignment study. The webinar discusses the business strategies that some physicians are currently using to retain their independence, as well as key drivers for the future.
According to the Accenture data, many practice owners are changing their patient mix by opting out of Medicare, Medicaid or even commercial managed care plans. In addition, more physicians are considering alternate or innovative business models as a viable way to maintain their independence amidst the many changes in the healthcare world. Subscription-based business models, like Hello Health’s revenue-generating approach, are growing in popularity as independent physicians look for ways to evolve with the times. The Accenture data shows that one in three independent physicians is now considering a subscription approach.
Regardless of which path they choose – employment or autonomy – the complexities of today’s healthcare environment and the challenges of running a practice mean that the status quo is no longer an option for most medical practice owners.
To learn more about the Accenture research and emerging business model alternatives for today’s independent practice owners, watch the webinar now!
Jennifer McDuffee is the director of marketing for Hello Health, the revenue generating EHR platform for primary care and pediatrics practices supporting practice vitality through patient engagement and electronic medical revenue.