Survival of the Fittest
When I talk to physicians in private practice about their struggles these days, I rarely hear business terms like market share, growth, or profit. Instead they talk about basic survival, as if they are up against the elements and concerned first and foremost about weathering the storm.
It may be a bit of hyperbole, but it is a fitting analogy. Richard A. Schoor, MD, FACS, an independent urologist from Long Island, compares a solo practitioner to an eco-survival specialist left in the wilderness. "Without the proper skills, knowledge, and a bit of luck, you can die out here."
I've spent enough time in the woods to know that your chances of survival increase when you aren't alone. A lot of physicians and industry experts I've spoken with recently have pointed out a trend of physician practice consolidation—medical groups are merging or bringing in new doctors because keeping a practice alive is a little easier when you have help.
Lagging behind when it comes to technology? Larger medical groups are able to achieve certain economies of scale to make electronic medical record systems and other IT more affordable.
Tired of lousy reimbursement rates? Bigger groups of physicians tend to have more leverage when negotiating contracts with private payers and are better able to point to market share, community advocates, or utilization/quality data to justify higher rates.
The benefits go on: More opportunities for ancillary revenue, additional referral sources, cost mitigation, and practice management expertise.
Achieving this strength in numbers doesn't necessarily require more physicians. Joint ventures, gainsharing, and other forms of partnerships and alignments with hospitals allow physicians to overcome the limitations of a small practice without drastically changing the practice structure. Regardless of the method, the point is to get the physician—or small group of physicians—a little help.
Knowing these benefits, however, some physicians still prefer solo or small practice—they value autonomy, control over financial decisions, or the more personal patient relationships. Should these physicians just give up on their dreams as the industry pushes doctors into bigger groups?
Not necessarily, but they need to recognize that they are willingly walking into the wilderness and must develop appropriate skills. Solo doctors have to do more with less. They must budget meticulously and cut costs whenever possible. That means paying attention to little things like turning off lights and saving paper. The line between personal and business finances often becomes blurred, and the solo practitioner must be careful with both.
But most important: Don't expect to be rescued.
Healthcare reform or government assistance of some sort would be nice, but don't count on it, Schoor cautions. We often assume that those in charge can't let physicians go under, but as we saw with the recent Medicare payment debacle, that's a dangerous gamble to make.
If you decide to venture into the wilderness alone, be prepared for a long trip.
Elyas Bakhtiari is a managing editor with HealthLeaders Media. He can be reached at firstname.lastname@example.org.
Note: You can sign up to receive HealthLeaders Media PhysicianLeaders, a free weekly e-newsletter that features the top physician business headlines of the week from leading news sources.
- CEO Exchange: Preparing for Population Health
- Advocate, NorthShore Deal Would Create 16-Hospital System
- Better HCAHPS Scores Protect Revenue
- Narrow Networks Cut Costs, Not Quality, Economists Say
- 3 Strategies for Retaining Millennial Employees
- Power of price: In South FL and the nation, healthcare costs often are shrouded in secrecy
- Two NY hospitals to offer free hip and knee replacement surgeries for qualifying patients in December
- Hospital mergers may lead to higher prices
- 'Early Offer' Malpractice Programs May Spur Reform
- EHR Systems 'Immature, Costly,' AMA Says