What's Driving Physician Practice Acquisition? It's Not Hospitals and Health Systems.

A new report from the AHA examines the factors driving physician practice acquisition.

Physicians attribute the need for practice acquisition to ongoing financial challenges, payer policies and practices, and demanding regulatory requirements, according to a new report from the American Hospital Association (AHA).

A recent survey conducted by Morning Consult on behalf of the AHA found that 94% of physicians believe that it has "become more financially and administratively difficult to operate a practice." This can lead to physicians finding alternative management avenues and driving physicians to seek practice acquisition and other alternatives, such as seeking employment elsewhere.

Physicians reported that policies and practices put in place by health plans have caused issues, even leading some to seek employment outside of their own practice. 81% of physicians surveyed said that commercial insurer policies and practices have "interfered with their ability to practice medicine," and 84% of employed physicians said they have had job interference from commercial payers.

But it's not only commercial payers that have brought forth challenges. Public payer regulatory requirements have also been a burden to physicians. Programs such as the Promoting Interoperability Program requires physicians to make EHR information accessible to patients, other providers, and public health data reporting. And the program also requires "eligible professionals to demonstrate meaningful use of certified EHR technology in order to avoid payment penalties," the report says.

The increase in costs has further taken a toll on physician-owned practices, with reimbursement rates not keeping up. This can drive physicians to find jobs in other practice settings. 75% (three of our four) physicians reported that low reimbursement rates from public payers (Medicaid and Medicare) created barriers around their ability to practice medicine.

"Despite efforts to paint hospitals and health systems as the sole cause of physician practice pattern changes, the truth is that commercial insurance policies, such as prior authorization, are creating unworkable environments forcing physicians to prioritize administrative duties over caring for patients," the report concludes.

"The result is increased burnout among physicians with no signs of stopping anytime soon. Physicians are searching for alternative practice settings that reduce these burdens and provide adequate reimbursement, while allowing them to focus on caring for patients. While hospitals and health systems are a natural fit for many physicians, commercial insurers are increasingly leveraging their considerable capital to lure physician practices."