Physician practices face new challenges as they balance patient care with business priorities. Despite restrictive insurance rules, government regulations and declining compensation, successful practices are identifying solutions that hold great promise for healthcare as a whole. Our latest report examines 5 Trends for Physician Practices.
#1. PRACTICES FOR SALE
Faced with rising costs and other pressures, some practices are selling to hospitals or larger practices so they can focus on patient care. According to a 2018 report, hospitals acquired more than 5,000 practices between July 2015 and July 2016, increasing the number of hospital-employed doctors by more than 14,000. With national health-insurance companies and managed-care organizations also making acquisitions, fewer than half of all physicians now have an ownership stake in their practices.²
#2. THE IMPACT OF MEDICAL CONSUMERISM
Retail medical clinics and urgent care centers — often owned or operated by physicians — have become increasingly popular. Today, more than 7,600 U.S. urgent care centers see more than 89 million patients a year. U.S. retail clinics, meanwhile, took in about $1.4 billion in 2016, more than double their revenues six years earlier. Because most insurers cover nontraditional-care outlets, they have emerged as small, but important, competitors.
#3. REGULATORY UNCERTAINTY
Medical spending accounts for 18% of U.S. gross domestic product.5 Healthcare regulatory reform, which was designed to improve affordability and care quality, has increased reimbursements, but also posed potential penalties related to reporting-quality standards and electronic health records. Meanwhile, attempts to eliminate all or part of the Affordable Care Act have brought additional uncertainty for physicians and their practices.6 In response, many are postponing decisions to expand, sell, or participate in the new patient-centered medical homes,7 affordable care organizations and other innovations encouraged by law.8
#4. COMPETITION FOR SKILLED WORKERS
Physician practices are competing for candidates, from primary care physicians9 to nurse practitioners.10 Strong demand has even increased the number of physician assistants by 40% from 2010 to 2017.11 Yet strategic staffing has important benefits, according to a recent survey, which revealed that hiring nonphysicians had a positive impact on practice earnings.12
#5. TECHNOLOGY IMPROVEMENTS
Technology is fueling major changes in how physician practices care for patients, run their offices and bill for services.13 Electronic health records have helped simplify prescription services and insurance billing,14 but also created headaches as practices choose providers, integrate systems and train technical staff. Artificial intelligence (AI), big data, robotics and 3D printing are now emerging as tools for improving patient care and practice operations.15 AI, in particular, has the potential to provide decision-support for diagnosis and treatment, freeing physicians to concentrate on decisions only they can make. 16