If you’re looking to stay independent and interested in integrating with other practices, here are three tips to help you decide whether it is right for you.
Healthcare involves much more than helping patients get and stay healthy. These days, the business operations aspect of private practice - the reimbursements, payer relationships, technology, data management, etc. - has become more demanding than ever.
As private practices realize the need for economies of scale in order to keep up and stay profitable, more and more practices are selling out to hospitals and larger groups. Research from Accenture found that the percentage of independent U.S. physicians decreased from 57 percent in 2000 to 39 percent in 2012 as the trend towards physician employment grows.
But what about physicians who want to remain independent?
According to the Practice Profitability Index, a survey sponsored by CareCloud in partnership with QuantiaMD, almost 60 percent of physician practices want to remain independent and are not looking to sell.
While the Accenture study points to subscription-based models, including high-end concierge medicine and direct pay models, as one direction for physicians who wish to stay independent, other private practices are choosing to consolidate and create networks while still maintaining their independence. The benefits include increased negotiating power and efficiencies, shared resources, and greater economies of scale.
If you’re looking to keep your practice independent and are interested in integrating with other practices, here are three tips to help you decide whether it’s the right move to make.
1. Make connections
Find like-minded physicians in your community and talk about possible opportunities for collaboration. Consider how your practices could work together for the benefit of all, keeping in mind the nuances of your market, the necessary areas of investment, the desired level of independence, and the cultures of your respective practices.
If you choose to move forward with integrating practices, you might have to build out a management team or hire a full-time CEO to make sure the group acts cohesively and everything runs smoothly. And as the healthcare industry continues to evolve, groups will need to maintain strong communication and stay flexible.
2. Determine the level of integration
While the individual practices within a group would remain independent, consolidation requires a certain level of clinical integration. Depending on physician preferences, the local community, and the competitive landscape, you’ll want to explore integration in a number of areas: physician leadership, evidence-based patient care management, performance monitoring, data sharing, and payer communications.
But be aware of the Federal Trade Commission’s policies regarding anticompetitive practices and antitrust statutes. Especially in the case of increased negotiating power with payers, integrated groups may be subject to review to ensure they are not breaking the law and in turn contributing to even higher healthcare costs.
3. Investigate integrated business models.
There is no one-size-fits-all business model for integrated groups. Some become management services organizations (MSO) that share business leadership and back-office support services. Others tap into economies of scale as independent physician/practice associations (IPA) - some operate as accountable care organizations (ACO) or Patient-Centered Medical Homes (PCMH). Others are forming decentralized groups that share resources, staff members, and processes at varying degrees of integration.
The amount of formality and level of independence are up to the individual practices involved. But consolidation offers an opportunity for strength in numbers - for a stronger sense of security, increased collaboration, and better outcomes. And for those reasons, it’s a compelling option for physician practices that want to remain independent.