The future: Be open to the development of new and innovative relationships with your colleagues


Here are some random thoughts I have regarding small medical practices and their future:

  • I believe small practices will continue to lose any ability to negotiate rates with payers.
  • As costs rise and reimbursement remains flat, the incentive to join hospital system networks will continue.
  • I think the demise of the small practice can be avoided through the development of either clinically integrated practice networks or the development of flexible merger models such as groups without walls.
  • Even small groups need to look beyond the fee-for-service mentality of "do more, make more" and embrace patient management and cost-effective care. Historic investments in EHRs can pay dividends in supporting these initiatives.

CMS reported that the fasted growing alternative payment model is bundled payments. Under this model, a lump sum is paid to the sponsor of the program and they divide the money among care providers, including hospitals. Early adopters of this approach were hospitals who then got to influence how the money is paid and that included physicians. Again, the small practice will have limited bargaining power in this setting. If physicians were the sponsor, like the California examples, they would purchase needed services from the hospital without caring what it cost the hospital to deliver the service.

So what's the bottom line message in this blog post? I believe physicians that want to remain in private practice need to be exploring collaborative models that will allow them to move up the financial food chain. This can’t wait until tomorrow because the speed with which payment models are evolving will eliminate the fence-sitters from playing a meaningful role in care management. While reports of the death of small practices are premature it is possible that critical care will be necessary unless those practices are open to the development of new and innovative relationships with their colleagues.

Have questions? I’m here to help.