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Thriving as an independent physician knowledge hub

If you’re a health care provider preparing to succeed on your own, we can show you how to do just that.

Physician recruitment & the pressures of acquisition  

Independent practices face growing economic uncertainty, with the potential for lower revenue and higher administrative costs in this era of health care reform. Among the issues practices need to address—the transition to value-based care, health IT requirements such as the Meaningful Use program—is a rise in physician recruitment by hospitals. Many large health systems and hospitals view practice acquisition as a physician alignment strategy, and to prevent the out-migration of patient care.

Rather than go it alone, some leaders of independent health care organizations are giving a close look at selling to, or merging with, larger health systems. On the surface, these larger systems can appear to offer advantages that independent practices may struggle to achieve, including:

  • Better access to capital
  • Greater efficiency, due to economies of scale
  • Improved pricing leverage with insurance payers
  • Upgraded IT systems that meet interoperability needs

Active physician recruitment by hospitals and large health care entities is a widespread trend. According to the American Medical Association, only about 40 percent of today’s family doctors and pediatricians remain independent.1 If physician practice acquisition trends continue the way they have been, more than 75% of newly hired physicians will be hospital employees within the next few years, according to a survey by Merritt Hawkins.2

Why is physician recruitment so prevalent now? Health care systems are pushing forward with physician recruitment and physician practice acquisition because they believe that having a greater number of employed physicians will lead to stronger physician alignment, as mentioned above, better positioning them to meet the evolving demands of payers. For example, health care systems hope that acquiring more physicians will help them manage the health of their patient populations efficiently—especially physician recruitment in primary care—because new payment models hold these organizations financially accountable for meeting cost and outcomes goals.

Many hospitals and health systems also believe that, with enough successful physician or physician practice acquisition, they can build referral networks to help coordinate patient care, keep procedures within their health system, and avoid costs associated with unnecessary procedures. They are also betting on physician recruitment to help diversify their service offerings, as outpatient care continues to become an increasingly important contributor to any health care organization’s financial stability.

Despite these trends, physician acquisition alone may not be the solution for large health care organizations looking to improve efficiency and outcomes. Instead, health systems need to focus on the real principles of clinical integration to succeed under new payment and care delivery models.

For independent practices feeling the pressure of physician recruitment and acquisition, the bottom line is that it is possible to thrive as an independent physician and control the course of the practice, even in the new health care reality. The key to thriving is not only maximizing efficiency and quality, but also having a flexible, robust system in place to stay on top of changes in health care without large, ongoing investments.

Cloud solutions that are service-focused and align their financial incentives with health providers—taking on risk with them as well—are best positioned to help steward independent practices through the upcoming changes in health care. The ability to be nimble, and respond to change in a timely way for providers, is essential, and can empower independent practices to succeed without opting for physician practice acquisition.

1Goodnough, A. March 2, 2014. “New Law’s Demands on Doctors Have Many Seeking a Network.” New York Times. Available at: http://www.nytimes.com/2014/03/03/us/new-laws-demands-on-doctors-have-many-seeking-a-network.html?_r=1.

2Zamosky, L. April 25, 2013. “Independent Physician: 6 steps you can take to remain independent—for now.” Medical Economics. Available at:
http://medicaleconomics.modernmedicine.com/medical-economics/news/6-steps-you-can-take-remain-independent%E2%80%94-now?page=full#sthash.zp3NhOkn.dpuf.

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