Consolidation is the buzz word in todays healthcare environment. Recent findings show that healthcare reform will continue to push physicians further away from the traditional independently owned and operated private practice setting. While consolidation in the healthcare industry is not new, it seems to have increased rapidly in recent years as physician practices, hospitals and other healthcare organizations contend with rising costs of care and the new technologies needed to process and report medical treatments and patient outcomes.
The rising cost of doing business coupled with the lower reimbursements for services is driving primary care physicians, especially those first entering the field, to take full time salaried positions with hospitals or other large umbrella organizations.
Finding ways to reduce costs and fulfill the requirements of the Accountable Care Act is driving the creation of these larger entities. These new organizations are bringing hospitals, physician practices, long-term care facilities, outpatient facilities, laboratories and wellness centers under one roof. Which leads to the questionwho is making the buying decisions in these larger organizations?
SHC having built a very large and robust Physician Panel wanted to better understand the current level of consolidation on a number of Physician Specialties. We asked 9 different types of Physician Specialists including Oncologists, Cardiologists, Gastroenterologists, Dermatologists, Endocrinologists, Neurologists, OBGYNs, Pediatricians and Orthopedic Surgeons on our panel whether they are in private practice or part of a larger umbrella organization. The findings revealed that:

  • 20% of physicians stated theyre in a solo, private practice
  • Nearly 30% responded that they were in a group practice owned by a hospital or owned by a healthcare system or managed care organization
  • Almost 50% stated they were in a group practice or partnership

We then asked if they are a part of an Integrated Delivery Network, defined as a network of facilities, physicians and providers that work together to offer a continuum of care to a specific geographic or market area.

  • Nearly 30 % of physicians stated they were part of such a network

We also asked respondents whether they are part of an Accountable Care Organization using the same definition we have used in previous studies. An ACO is defined as an organization of healthcare providers that agrees to be accountable for the quality, cost and overall care of patients assigned to it. The Obamacare bill provides incentives for ACOs that save money while maintaining treatment quality of patients.

  • Slightly over 30% said they were part of an Accountable Care Organization

So what are the implications of this finding? Depending on the type of research being conducted, it may no longer be enough to just interview a cross section of physicians in a particular specialty and assign equal weight to all physicians. We may have to also determine the level of influence in the decision making process at their organization. Does the fact that nearly 80% of all physicians are now working with others in a group practice or owned by a larger entity mean we need to profile a bit deeper and/or ask questions about the amount of influence of the particular physician in the buying decision of the practice. It is clear that the market place is changing and we need to be cognizant of this fact. Although we do not have all the answers yet, we surely invite you to use our panel to ask the questions.
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