Small practice or ACO, focus remains on patient care

It’s not your imagination. If you feel like there are fewer solo physician practices these days, you’re right. Physicians in practices of nine or less dropped from 40.1% to 35.3% from June 2013 to December 2015, according to researchers who studied the Medicare Physician Compare public use datasets from that time period.

At the same time, physicians in practices of 10 or more increased from 29.6% to 35.1%. This migration from small to mid-sized practices was more common among primary care doctors than specialists.

Here are 5 conditions experts cite as contributing to the decline of small practices:

  • Younger doctors prefer larger practices. Newer docs are 2.5 times less likely to work in a solo practice. Many of them are in search of more predictable incomes and the work-life balance that larger group practices can offer.
  • Older doctors are retiring. Physicians in smaller practices are moving out of the workforce as they retire and these solo practitioners are not being replaced at the same rate.
  • Power in numbers. Larger practices and hospitals are shoring up their position in the market and are finding strength in numbers, especially when negotiating with insurers.
  • Fewer resources. Care coordination takes a high level of organization and personnel that small practices can struggle with, especially when it comes to making investments in diagnostic equipment and healthcare technology.
  • MACRA requirements. Administrative burdens like the Quality Payment Program (QPP) and the regulations and data analytics it brings can be difficult for small practices to manage.

Should I join an ACOAs the healthcare landscape evolves from a fee-for-service model to value-based care, it is no wonder that the market is becoming more consolidated. While many physicians enjoy being small business owners, others want to focus less on administrative tasks such as reporting and bill collection, and more on patients. So they leave private practice to work at hospitals, or to merge with other medical practices which can have higher patient volumes as well as the resources for the administrative, financial, and technical requirements needed to manage new reimbursement models.

Some physicians are joining Accountable Care Organizations (ACOs). These groups of doctors and hospitals share responsibility for the cost and the outcomes for their patients. The goal is to give coordinated, high-quality care to their Medicare patients more efficiently. ACOs are encouraged and rewarded for quality metrics and for decreasing cost of care. Many physicians see ACOs as a good business strategy when it comes to government incentives because it can mean more revenue generation and potential cost savings.

However, small practices should not be counted out. They are well-positioned to succeed with value-based care due to their longstanding relationships with patients. In a world where a premium is put on quality of care, small practices are still very relevant. And practices with fewer than 10 physicians still represent about one-third of practices, according to the Survey of America’s Physicians: Practice Patterns and Perspectives.

One thing is certain. The healthcare landscape is changing, and will continue to evolve. It’s important that physicians find the model that works best for them and their patients.

Care360® has experience with both small practices and with ACOs. To learn more about selecting an electronic health record (EHR) for your small practice or ACO, read our white paper, or call us at 1.888.835.3409.

Sources:   Health Affairs, Commonwealth Fund, AAFP, Medicare


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