Jan 12

Back in vogue – private practices, hospitals teaming up again

Faced with economic uncertainty and financial woes, doctors in private practice are increasingly turning to hospitals for employment. I’m hearing more and more of this activity in the past year. I’m sure you have too.

The percentage of hospitals employing private practice physicians has nearly doubled since 1994 and the trend is expected to accelerate in 2010 as those doctors seek greater stability and health systems attempt to extend their geographic reach.

It seems physicians are beginning again (similar to the mid 1990’s) to warm up to the idea of aligning with hospitals, which has long been considered off limits by private practice physicians. In the current state of healthcare economics, physicians are finding it increasingly difficult to practice on their own. For many, joining a health system is looking like a more appealing as a safe haven.

The migration of physician groups to health systems as one of the major health care trends in 2010, particularly as funding models move toward bundled payments or global fee structures. It will require all providers to re-evaluate their relationships, operational infrastructure, payer contracting and overall funding models.

Let’s face it however – When a practice goes over to the hospital, it tends to mean they are looking for security; There’s much less of a headache.

Besides aligning with a hospital, to me the major trend of 2010 will be physician to physician practice mergers. If done right, this model’s benefits far exceed the benefits of the physician/hospital alignment.

No matter what affiliation you are looking at undertaking, always ask yourself this one question before moving forward:

“What can this do for me that I can’t do for myself?”

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →