By: Renee Subaran
Today, in this constantly changing ecosystem, more practices are struggling to maintain financial homeostasis. New laws are implemented yearly within the healthcare industry. Physicians are now micro-managing their money as the margins have gotten a lot thinner. As most private practices struggle to create consistent and maximum revenue more physicians are partnering up.
According to the New York Times, young physicians burdened by medical school debt are seeking regular hours and are against opening a private practice alone. Much to the detriment of many physicians who are now being forced to abandon private practice in favor of hospital employment.
Properly allocating funds are crucial as physicians work both privately or together in a practice. It is important to establish compensation models that hold each physician accountable for his or her own resource use. This promotes good operational behavior as organization is the key to finances. Two compatible physicians create successful mergers when both share a similar vision and work ethic. The key is to sync one ideology. Money is mostly generated by the practice through insurance. Hence why having compatible insurance partners such as Blue Cross Blue Shield, Medicaid, Medicare and more are vital as well.
The trend away from small private practices is driven by growing concerns over medical errors and changes in government payments to doctors. But an even bigger push may be coming from electronic health records. The computerized systems are expensive and time-consuming for doctors, and their substantial benefits to patient safety, quality of care and system efficiency accrue almost entirely to large organizations, not small ones. The economic stimulus plan Congress passed early last year included $20 billion to spur the introduction of electronic health records. It also important to agree on a billing platform such as one provided through Healthcare Revenue Services to establish such records.
For older doctors, the change away from private practice can be wrenching, and they are often puzzled by younger doctors’ embrace of salaried positions. There are likely many reasons that physicians have been slow to consolidate but in my experience, one of the primary reasons that merger discussions among medical practices fail to even get off the ground is a fundamental lack of trust between the merger participants. All in all, moving into 2018 I personally hope to see more private practices as the opportunity to create a large revenue is still available.