Smart Strategies for Survival in Independent Medical Practice
Much has been written and discussed about hospital acquisition of many previously independent, private practices. That trend is very real and has made the challenge greater for practices that want to remain independent.
But despite what many in private practice see as a gloomy outlook for their future, others are becoming smarter and more strategic in how they conduct their practice to be more profitable and competitive.
Some of the strategies that private practices employ include:
Strength in numbers
More practices are joining IPAs (Independent Physician Associations) because of the insurance contract negotiating leverage that an IPA can leverage to a much stronger position than a single practice can hope to achieve on its own.
Additionally, some practices that do not participate in IPAs are still able to take advantage of comprehensive discount buying programs available to private practices through buying consortiums for clinical supplies, office supplies, pharmaceutical purchases and capital equipment.
Competing on Price
Although the new budget passed by Congress has closed a loophole that has allowed hospitals to take advantage of facility fee charges for services provided in acquired practice clinics that have been reclassified as outpatient departments of hospitals, hospital-owned outpatient clinics that were acquired and operating under hospital ownership prior to passage of the new law have been “grandfathered” in under the previous payment system. Those clinics (and there are many) will continue to charge and collect for professional fees and facility fees for office visits and treatments performed in clinic setting.
However, many patients don’t understand that they will have to pay more (often a lot more) in copays or coinsurance or unmet deductible payments for treatment in a hospital-owned clinic by comparison to a truly independent private practice. They are usually shocked and upset when they find out how much they have to pay that they were not informed about prior to service.
This can work to the advantage of the independent practice in two ways: 1) informing and educating patients and the community about the price difference (buyer beware) through internal and external marketing and; 2) being fed unintentionally by the hospital-owned clinics whose previous patients want to change to a lower cost environment once they have been stung by the surprise high payments that they incur at these hospital-owned clinics.
Competing on Service and Patient Experience
Many hospital-owned clinics that were formerly private practices suffer a reduction in the quality of the patient experience once they are under hospital ownership.
There are a number of reasons that this occurs and the result is that many patients become frustrated with longer wait times, less time with their doctor, a rushed and less patient-friendly attitude of overwhelmed providers and staff and an overall employee mindset from both doctors and staff in these settings.
Any independent private practice that can craft a consistently positive and attentive patient experience will increasingly stand out by comparison to worsening patient experiences for many patients who are treated in hospital-owned facilities.
This trend should also bode well for practices that have converted or are converting to a concierge medicine model where more affluent patients are willing to pay more IF they receive better service but will be upset if they are paying more for worse service.
What is your strategy for survival? Your comments are welcome.
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