Physician investors face financial pressure

Though they're used to working in an industry that seldom feels the pinch of economic downturns, physician investors are being hit by the recession this time around. Observers say that with costs rising, this could be the year in which many group practices and surgical centers face some critical decisions about their future. And they're predicting that given the current financial climate, a large number of practices will decide to sell out to hospitals.

The truth is, many practices have been selling out even without the added pressure of recession. In fact, according to an ongoing study by the Medical Group Management Association, 18.9 percent of 1,231 study respondents were hospital-owned, while in 2008, 35.5 percent of 1,470 respondents were hospital-owned. But observers think the pace could pick up this year.

Those physician investors that don't sell out will have to do even more cost-cutting than they've done in the past, experts say. One typical example is Cape Giradeau (MO) Surgical Clinic, a six-surgeon practice. The practice is having to take a myriad of steps to become more efficient, including turning patients over to collections agencies more quickly, and holding off on plans to hire another general surgeon. (It's making do with physician assistants and other mid-level providers.) Even with these steps, it expects to see profits and revenue fall this year.

To learn more about this trend:
- read this Modern Physician piece

Related Articles:
Congress considers specialty hospital regulation
MGMA: Practice cost rising faster than revenue

Suggested Articles

An ACA public option could lead to lower premiums for commercial plans by sparking more competition, an analysis found.

Centene Corporation posted $95 million in profit for the third quarter of 2019, which skyrocketed from $19 million in the third quarter of 2018.

A KHN investigation found that manufacturers, hospitals, doctors and some patient advocates have put marketing muscle behind 3D mammograms.