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eDocTalk article

Independent practices are becoming less common

October 2017

Legacy is committed to supporting physicians in the practice environment that best meets their preferences and needs; however, the movement towards value-based care presents challenges to independent physicians.

Our system of health care has become more integrated and the requirements to succeed in the world of value-based care can be daunting for smaller practices. The investment required for IT, quality and safety compliance is burdensome. Research also shows that the younger generation of physicians prefers to join larger practices or hospitals, rather than to own (see recent article).

The pace of consolidation seems to have accelerated, too. Recent examples include:

  • Legacy’s recent integration with Westside Internal Medicine, a seven-provider primary care group
  • The recent investment in Bend Memorial Clinic by a large national for-profit (Summit Health)
  • While Optum, a part of United Healthcare, has no presence here in Oregon, the national for-profit is actively buying more clinics. Recent examples include Boston and Denver.

 

Despite market consolidation, independent physicians still have options to help them succeed in today’s health care environment. Whatever model works best for you, Legacy is committed to partnership with our providers. Below is a comparison of different practice models and considerations for each. You can also review these additional resources:

 

  • Physician Partnership to lead healthcare transformation: Picking the right model for your market
  • Medical Economics: Can physicians maintain independence while working as part of a large system? 

     

    Practice model Pro  Con
    Independent • Autonomy
    • Physician led
    • Ownership
    • Financial and administrative burdens
    • Reimbursement pressure
    • Pressure to meet demands of population health and value-based care goals
    Affiliation/partnership • Maintain autonomy and majority ownership
    • Infusion of capital
    • Potential loss of some autonomy
    • Differing organizational goals
    • Care coordination may suffer
    Clinical integration  • Ability to maintain independence
    • Positioned for value-based care
    • Eased burden of contracting
    • Requires infrastructure to support
    • Alignment of targeted quality measures
    Hospital employment

    • Reduced administrative and financial burdens
    • Positioned for value-based care
    • Security in changing healthcare environment
    • Enhanced lifestyle

    • Loss of autonomy
    • Cultural alignment
    For-profit ownership • Access to capital and other resources
    • Management expertise
    • Loss of autonomy
    • Maximizing shareholder value is the overarching goal
    • Cultural alignment

    Definitions

    Independent physician. Solo or small group of practicing physicians who own their medical practice
    Affiliation/partnerships. Closer alignment with a health system, in some cases through a gain-sharing or joint-venture arrangement
    Clinical integration. A specific type of legal arrangement that allows hospitals and physicians to collaborate on improving quality and efficiency, while remaining independent entities
    Hospital employment. Employment of physicians either directly or through a separate physician-led, but hospital-controlled legal entity
    For-profit ownership. Acquisition by a large for-profit entity (i.e., Optum, DaVita) for physician groups looking to expand their footprint while maintaining independence from a hospital system

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