Study Internal, External Factors in Practice Merger Decisions

Assessing the quality of leadership within your practice also is critical. "Are there physicians in my group that love business in addition to the clinical side of medicine?" Halley says. "You tell us you don't want to worry about business administration; you want to practice medicine. Our message to you is the day you leave your medical training program, you are in business. Either you will be smart about being in business or somebody else will make those decisions for you, and that will affect how you practice clinically."

Then there are the external factors, many of which are beyond your control. "What is going on in your market externally? Do you have the internal capacity to respond to that and remain independent?" Halley says. "If you don't, you have to consider who would be the best partner. You'd rather be making a partner selection than being forced into slavery, as it were, by a bigger player that is just gobbling up everybody."

It's not simply a question of buckling down and working harder to survive. "We don't know what is going on with healthcare reform, but there is one thing we can be assured of: Reimbursement will go down," Halley says.

To prepare for that, he says, small primary care practices can no longer be reliant solely on cognitive services. "We are saying to our family physicians, ‘Be smart; start looking for products and services you can offer. Don't think you can make it just on cognitive services and go from seeing 25 patients a day to 45 patients a day,' " Halley says. "In a health practice, as a rule of thumb, we are looking for at least 20% of net patient revenues from ancillaries."

To stay independent, physician groups also must adopt stringent highest- and best-use staffing practices, in which the physicians' valuable time is spent doing only what the physicians can do, with other work delegated to clinical assistants facilitating patient interaction. "One of the most important responsibilities of a clinical assistant is to help the doctor be productive, to keep that doctor moving all day long," Halley says. "That enhances the physician's productivity. But you have to staff for that. In some cases, you may have to increase staff to increase productivity."