According to a 2021 press release from the American Medical Association, private practices are now the minority, signaling a growing trend toward larger medical practices and a movement away from independent physician-owned practices. From 2018 to 2020, the number of independent practices waned by 4.9%. Furthermore, physicians affiliated with practices that have at least 50 physicians increased 2.5% in that timeframe. Rising administrative burdens, inflation-related fee schedule adjustments, and recruiting competition with hospital systems have led many independently practicing physicians to change their current practice protocols. However, the question of how to make those changes can be unclear for many physicians. There are a number of options for independent practices to thrive.
Either entering into an existing super group or creating a new one enables independent practitioners to increase both productivity and profitability. Though the latter involves a significant time commitment, it ensures the ability of independent practitioners to be in a super group amongst like-minded partners who share similar thoughts on group infrastructure. The existing infrastructure and track record of established super groups, however, may be more attractive to some independent practitioners. While being part of a super group can improve practice management, practitioners must bear in mind that this commitment lessens both practitioner autonomy and involvement in day-to-day operations.
Well-researched, go-to-market private equity investments can also lower administrative burdens and costs while increasing productivity and profitability. By consolidating non-clinical functions, independent practices maximize their chances for achieving economies of scale. Forming a properly structured management services organization is another tactic to achieve economies of scale while protecting assets and potentially prepping for private equity acquisition. Simply growing a practice can provide more leverage in payor negotiations and can make a practice more attractive, thereby opening up the possibility for merger or acquisition.
Joining with hospital and health systems is another strategy to help abate administrative burdens and keep operations running smoothly. However, such systems may attempt to influence clinical decisions and pressure physicians to reach a certain volume mark. Therefore, physicians must be cognizant of their compensation, ensuring they are not overpaid and in violation of the Anti-Kickback Statute and False Claims Act.
Supporting evidence-based best practices enhances value. Practices that join data-driven clinically integrated networks (CINs) may benefit from shares savings and bonuses and perhaps from enhanced payor fee schedules as well. Potential savings can also be attained via participation in accountable care organizations, which aim to offer high-quality care in tandem with lower spending by streamlining services and preventing medical errors.
