Physician Practice

For some physicians, consolidation has its perks

Physician Practice Insider, April 4, 2017

The number of solo and small practices continues to dwindle in the U.S., and the pace of consolidation is expected to quicken in the next few years as uncertainty and change continue to pressure independent practices.

A number of factors are impacting the bottom line of small practices and physicians, including the high cost of medical malpractice insurance, the demands of health information technology, flat reimbursement rates from Medicare and Medicaid, and the potential for those flat rates to be reduced if a practice doesn’t meet quality reporting benchmarks.

And while some analysts see practice consolidation as a product of large health systems building their size and power to hedge against consolidation by the insurance industry, others say the trend isn’t being driven by buyers alone.

“People blame hospitals and health systems for buying up everything in sight, but you wouldn’t have consolidation at this rapid a pace if you didn’t have a willing base of customers,” says Travis Singleton, an analyst and senior vice president with Merritt Hawkins & Associates in Dallas. “It takes two to tango, and the fact is, you have a lot of physicians in their mid-career who are willingly gravitating to larger practices.”

This article was originally published in Physician Practice Perspectives. Subscribers can read the full article in the March 2017 issue.

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