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Is a Bigger Medical Practice Always Better?


Here are some issues to consider and some questions to ask before you become part of a large medical practice.

Is bigger better? Should I join a larger group? Should our group sell to a hospital system or a multispecialty group? These are difficult, yet vitally important questions that many physicians are asking. The truth is that bigger often seems better, at least at first glance. But look deeper by first reviewing all the advantages and disadvantages.

Bigger certainly offers benefits: Larger groups get the best commercial reimbursement rates, have fewer uncertainties, provide greater financial and job security and better access to the latest technology and practice resources. While these advantages are significant, there are other important points to consider as well.

1. Bigger doesn’t always mean more efficient, for example. One of the primary selling points for large medical groups is that they create greater efficiencies. But bigger sometimes simply means more administrative overhead, more time spent in meetings, and less time devoted to actual patient care.

2. Not all physicians will share the group’s philosophy. One of the biggest complaints many physicians have after joining large medical systems is that they lose control over what they believe is the best way to care for patients. Even something as basic as referrals may no longer be at the physician’s sole discretion. In many large groups, referrals aren’t made to the best provider necessarily. Instead, the rules state that referrals must be made within the group or a designated network.

3. There may be more pressure. Many physicians, especially those in smaller groups or solo practice, are simply tired of uncertainty and having to work harder just to stay afloat. Often, joining a large system seems like a way to get off this proverbial treadmill and have more time for family and other interests. Large groups do have administrators and support staff who run some of the business aspects of the practice. However, there are often new administrative demands placed on physicians in large groups. And, regardless of size, all groups face demands to increase productivity, in part because salary and bonuses (and perhaps penalties) are tied directly to productivity.

4. Don’t expect a big payout. While physicians hope that selling to a large group will result in a big paycheck, the truth is it does not. Most physicians selling their practices or groups to a larger organization realize little or no value from their efforts to build a successful practice. There simply is no magic payday.

These concerns notwithstanding, there are still many good reasons to join a large group. For some physicians, a large practice may be a viable and even optimal option. But before making any decision, it is important to not only make sure you have every bit of information possible on what effect this decision will have on you as a physician, but also how it will affect your patients and the profession as well.

Interestingly, despite all the talk about the need for larger groups today, most practices have 10 or fewer physicians, meaning they are still relatively small. The challenge these groups face is that so many physicians feel threatened by lower reimbursement and higher demands on their time, that they make decisions based on fear. Fortunately, primary-care physicians wield considerable power, especially under healthcare reform (both mandated and what is now happening organically). Therefore, primary-care physicians are intended to be the coordinators of all care and services. In this role, they are highly sought-after professionals, vitally important to both patients and the system itself.

The bottom line message is that physicians should not underestimate the value of the services they provide to patients. They certainly should not make decisions based on fear of the unknown. And, they should never believe the grass is greener on the other side, at least not without verifying this fact first.

Physicians should consider the full range of options available and answer these questions:
• What are your primary concerns?
• What do you want from a practice today?
• What do your patients need?

Then consider all of the options that are available, including selling to a larger group, starting a direct-pay program, full model concierge, or a hybrid program.

When you ask yourself those questions and consider the effect your decision will have on you as a physician, your practice, patients and the profession itself, the decision just may be a little easier.

Find out more about Wayne Lipton and our other Practice Notes bloggers.

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