For several years, the medical industry has been facing a major shift from private to group practices. Privately owned practices are increasingly giving way to group practices directed by larger corporations or to new providers aiming to offer services directly to patients — and primary care physicians are leading the trend.
There are several reasons why this shift is occurring; these include decreased profitability, operational challenges arising from reform efforts, and a drive for efficiency. Declining reimbursements and an increase in time spent on administration — not to mention the expense of integrating and maintaining electronic systems — are making the private practice less viable. But there are also larger market forces at play.
The Patient Factor
Patients have increasingly high expectations of their medical practitioners. Patient comfort and convenience are key factors, with patients demanding seamless, efficient and all-in-one service settings. “Hospitality” has become an important piece of shorthand, with patients drawing parallels between medicine, retail and hotels — and expecting a certain degree of consistency. Yet these ideas are expensive to implement without the support of scale.
Group practices, on the other hand, are able to deliver on these expectations. They can leverage positive outcomes like extended operating hours, simplified appointment booking, and even efficiencies spanning from check-in to consultation to billing. They have the resources to implement patient-centered directives and experiences that are comfortable, convenient and consistent.
We’ve heard plenty about hospitals acquiring private practices over the years. But there’s a much larger-scale disruption at play here. Innovative newcomers are offering high-tech, high-service solutions that deliver on market expectations – and that can be rolled out rapidly. Many of these providers are backed by venture funding, allowing them to implement quickly and efficiently. Designed to solve the access and service challenges that hound private practice, they offer telehealth functionality, digital efficiencies and expanded capacity from a centralized context.
These delivery models may be seen as a threat to private practices, but they’re also a boon to patients. Practitioners who enter into a collaboration with these disruptive providers get to hand over the challenge of admin, profitability and practice management while being able to seamlessly expand patient access and service provision.
Planning for the Shift
With younger physicians preferring to work in group-based settings and older private-practice owners retiring out of the industry, the trend towards group-based medicine is only going to grow. Add increased reporting burdens, patient expectations and the cost-saving affordances of technology, the incentive to transition is clear.
While practices with fewer than 10 physicians still account for about 1/3 of the market, the shift towards collaboration is undeniable. Private practitioners should assess their current service provision and should consider reaching out to hospitals’ clinically integrated networks (CINs) or equity-backed companies to see whether it’s worth partnering with or being acquired by them. Adding additional team members to a clinic, as well as being able to leverage the benefits of scale, technology, and patient-centered design can result in more efficient, productive and cost-effective healthcare provision.