Examine those doc deals
Re: “Few spared in consultant’s review of healthcare scene,” ModernPhysician blog, Sept. 23: Hospitals now have the upper hand in physician practice acquisitions. More than 50% of physician practices are now owned by hospitals. The percentage has increased dramatically over the past two years with a game-changing attitude shift by physicians.
The real work is not in negotiating the deals, but in ensuring accountability, quality and productivity with a financially rewarding outcome to the acquired physicians in the practice who become salaried employees and a return on investment to the entity purchasing the practice.
There are five prime reasons to consider integration. Unless a physician or a multiphysician practice can realize a net gain in at least two of them, the probability of a successful and mutually rewarding transaction is low. The five key components are: infrastructure economies of scale (documented cost-savings), increase in managedcare contract reimbursement, group purchasing advantages, malpractice premium reductions, and complementary services.
Emotional integration for the sake of “just doing something” is never a good reason to act. With one-third of practicing physicians age 55 and over—more than 250,000 physicians—this is a subject of increasing frequency and concern among physicians all over the country looking for an exit strategy and a way to monetize the goodwill in their practices from, in many cases, over 25 years of business and dedication to their patients.
A. J. Rosmarin Rosmarin Consulting