Physicians are facing new challenges as they balance patient care with business priorities. Restrictive insurance rules, government regulations and declining compensation are just a few of the obstacles that modern practices are up against.
Despite these challenges, successful practices are identifying solutions to these business pressures. Here are five trends shaping the healthcare industry. As we approach 2020, administrators should consider how these trends may impact, and potentially improve, their practices’ outlook.
1. Practices for sale
Faced with rising costs and other pressures, some practices are selling ownership to hospitals or larger practices so physicians can focus on patient care. Hospitals acquired more than 5,000 practices between July 2015 and July 2016, increasing the number of hospital-employed doctors by 9 percent, or more than 14,000 physicians in the U.S. that year, according to a 2018 report from Avalere Health and the Physicians Advocacy Institute. With national health insurance companies also making acquisitions, fewer than half of all physicians now have an ownership stake in their practices, according to the report.
However, not all physicians are selling. Some physicians are finding it difficult to get an adequate price for their practices. Primary care physicians may choose to invest in technology and non-physician staff to increase practice efficiencies. Meanwhile, other practices are opting to move to a concierge model that focuses on more personalized attention to a smaller patient base.
Similarly, specialist practices are increasingly selling stakes to private equity firms to avoid being acquired by hospitals. This allows them to keep an ownership role in their practices and maintain strong patient relationships while also benefitting from management expertise and the opportunity to share in profits if the private equity partner decides to sell the practice.
2. Increase in medical consumerism
Retail medical clinics and urgent care centers are becoming more popular — and are increasingly owned or operated by physicians. Today, more than 7,600 urgent care centers in the U.S. see a combined total of more than 890 million patients per year. Meanwhile, U.S. retail clinics took in about $1.4 billion in revenue in 2016, more than doubling their revenue from 2010. Since most insurers cover nontraditional care outlets, these clinics continue to emerge as tiny-yet-mighty competitors to larger physician practices.
Therefore, physicians must continue delivering on the value of having an ongoing doctor-patient relationship, one that considers a deeper understanding of a patient’s health history, which is not common in an urgent care setting. Some physicians are responding to the growing consumerism by extending practice hours or opening emergency clinics, increasing their cooperation with nontraditional care settings by linking electronic health records (EHRs) and using outside clinics as referral sources for new patients.
3. Regulatory uncertainty
While healthcare regulatory reform has increased some reimbursements, it has also posed potential penalties related to reporting quality standards and the documented use of EHRs. Meanwhile, political attempts to alter or eliminate the Affordable Care Act have brought additional uncertainty for physicians and their practices.
As a result, many physicians are postponing important decisions to expand, sell or participate in new patient-centered medical homes, affordable care organizations and other innovations encouraged by the current law.