Unfortunately, the reality is that the need to maximize profits and volume has depersonalized the healthcare industry in many ways. It’s a big challenge for doctors to provide effective and thoughtful medical care in an environment overrun by payer politics and a business model that pushes physicians to their limits. This article is going to look at three of the biggest challenges private practices are facing and how to overcome them.
The Large Health System is Absorbing Private Practices
Independent practices are known for providing better outcomes at a lower cost than larger systems. But, at the same time, more and more are disappearing each day. According to AMA’s Physician Practice Benchmark Surveys, for the first time, physician-owned private practices are no longer in the majority. In 2016, 55.1% of physicians were working in privately owned practices. The question is – why are medical professionals moving away from the private model?
As older physicians retire, new generation doctors are less likely to take on the risk of running their own independent practice. For a new doctor fresh out of medical school, positions in a highly profitable hospital offer stability and good pay, and are hard to turn down. But is there a long term cost? Read on.
Private Practices are More Susceptible to Physician Burnout
Over the last few decades, the workload of individual physicians has increased dramatically without much of an increase in pay. A study from the Annals of Family Medicine concluded that primary care physicians spend more than half of their average workday on clerical work like documentation and data entry. Almost half of their day is being spent on the computer rather than helping patients.
To combat this, some are looking for ways to maximize profit with a smaller pool of patients so they can focus their energy on providing the best care possible without being stretched too thin. A more in-depth look at the Medscape annual survey reveals that salaries are increasing, however. For many private practitioners having a well-trained admin, staff relives them of admin work.
The Insurance Companies are Growing in Size and Negotiating Power
Every year insurance companies keep absorbing their competition and maximize their profits. They have leveraged themselves into a position where they can increase premiums while neglecting to increase the rates for the physicians. Over the last decade, inflation has risen by over 20%, while Medicare reimbursement has increased by less than 5%. Each year, payers increase their premiums, yet we rarely see these increases passed on to the physicians. As a result, more physicians are partnering with larger organizations to avoid the headache.
A Simple Solution for Practices
Most private practices don’t get the reimbursement rates they deserve. The key to obtaining better rates is finding an understanding of your leverage and holding insurance payers accountable. Before negotiation better rates, you can take a look at your practice and identify what sets you apart from other providers in the market. Try answering these questions:
- What services do you provide that can be used to establish your value and give you leverage when negotiating with payers?
- Do you offer services that keep patients from the need to use Urgent Care?
- Are you a specialist that can’t be found in the area?
Hold the Insurance Payers Accountable
Working with a third party analyst outside of your private practice can be valuable when seeking out an honest analysis of your practice. By creating a strong analysis of your practice that highlights its value, it will save the insurance payer money, and create a powerful argument for better rates.
