"A lot of solo practices and solo physicians are looking to sell," Sorrell says. "They can't afford to put in the resources necessary to comply with the ACA, (Affordable Care Act) and they're just looking to get out. Employment seems to be a better option for them at this time," Sorrell says.
While physicians appear to be the primary initiators, hospitals aren't merely passive bystanders. The survey showed that 58% of hospitals are bringing physicians on board to build "competitive" advantage, 55% to maintain a competitive advantage, and 57% say it's part of a "physician recruitment strategy."
Another 28% said improving patient safety was a key motivator in their physician acquisition strategy. (Editor's note: A HealthLeaders Media Webcast, Recruiting and Retaining the Right Physicians for the Post-Reform Era is slated for Friday, March 22, with Jim Stone, president of The Medicus Firm, and Floyd Wilson, Jr., executive VP of marketing, physician relations, and community outreach at Metro Health System in Wyoming, MI.)
Over the last several years, recruiting and retaining doctors have been challenging, against the backdrop of uncertain economic conditions, physician shortages, and regulatory challenges. Hospitals and physician groups are working to overcome the obstacles.
Sorrell says the hospital plans for physician acquisitions seem "more opportunistic than strategic." The physicians are taking the first step, and hospitals are jumping at it, she adds.
And what of those "competitive advantages" in buying physician practices? Sorrell sees it this way: "Building a competitive advantage would be acquiring physician practices in specialties in which you do not currently have an advantage—trying to go up against a competitor that already has an advantage over local competition—strengthening that advantage."