By Sal Casillas
Medical group entrepreneurs are making investments in key strategic initiatives and technology opportunities to compete in the new healthcare economy.
Note: The following article is an extension of one of five key trends highlighted in a larger briefing report available for download here: The New Medical Economy.
The triple aim of healthcare reform — higher quality care, improved population health and reduced per-capita costs — has made independent medical groups, especially in primary care, newly crucial players in the healthcare ecosystem. The pace of hospital and healthcare system acquisitions of physician practices is slowing, and entrepreneurially minded physicians are seeing opportunities to compete for patients and explore out-of-the-box collaboration models.
Specialties, including family practice, orthopedics, dermatology and urgent care, are appealing areas of medical group entrepreneurship both for their strategic position in the new reimbursement landscape and for posting strong year-over-year increases in net-collections Independent medical groups are generally showing optimism about growth in the next two years, especially those owned by millennials and women, according to a recent survey conducted by TD Bank.
“Statistics maintained by the American Medical Association (AMA) indicate that 60% of physicians practice in organizations that are owned by doctors, and that only 20.3% of doctors work in practices owned by hospitals or are direct hospital employees.
– MGMA, 2016
With the aid of accessible technology, independent medical groups are finding ways to not just survive outside of the hospital model, but also to become successful leaders in patient care coordination. As practices reimagine the end-to-end consumer experience, they are exploring how to import best practices from retail, banking and other consumer-facing industries into their businesses.
“In order to be successful in medical and healthcare innovation, you have to have a very strong understanding of the clinical fundamentals that you’re trying to address,” said Jay Joshi, MD, primary care physician, CEO and founder of Output Medical and co-founder of MD Angels at the 2016 AMA Annual Meeting.
Independent medical groups are also seeing the growth opportunities in collaboration through new value-based care models such as the Medicare Access and CHIP Reauthorization Act (MACRA).
“MACRA allows groups to either submit individually or in a ‘virtual group.’ If we are able to, and in most cases, we can, put together the analytics so we can start measuring the data that is going to be centered on the part of practices in the Merit-Based Incentive Payment System (MIPS) program, we can actually start combining groups within collaborations [utilizing] these group models and utilize the analytics to see where the highest scores may be generated,” said Keith Chew, MHA, senior vice president of strategic positioning and consulting services for technology and services provider Integrated Medical Partners at Medical Group Management Association Annual Conference 2016 in San Francisco.
As the hospital-buyout binge of physician practices slows, the modern healthcare landscape is creating circumstances for medical professionals to build new medical groups from scratch, acquire established successful practices or, most notably, seek partnerships with other strategic practices to share resources and build strength in numbers.
What to watch:
Follow the trend of private equity–acquiring medical groups, especially in primary care. M&A experts are seeing a strong “seller’s market” with practices demanding increasingly high prices. Also, track the CMS 2017 proposed hospital outpatient payment rule to see if the plan to remove incentives that have promoted consolidation in the healthcare industry is approved. If so, even more medical practices may turn an eye toward independence and renewing the formula for innovation outside of the hospital setting.
Read more about five key trends driving The New Medical Economy in this free briefing paper available for download from CareCloud today.