More than half of independent physicians reported they are worried about their practices surviving the COVID-19 pandemic indicating there may be a sharp uptick in future partnerships and consolidation, a new report found.
Consulting firm McKinsey & Co. surveyed physicians nationally in both 2019 and, again, six weeks into the pandemic, to understand physician sentiment. Nearly half of the physicians surveyed in the six weeks after the pandemic was declared said they had less than four weeks cash on hand.
Nearly seven in ten (68%) of those who were looking for partners listed financial support as the primary driver, the report said.
"While autonomy has remained a priority for physicians, respondents indicated that they will consider partnerships or joining a health system as a result of financial uncertainty resulting from the COVID-19 pandemic," authors Kyle Gibler, M.D., Omar Kattan, M.D., Rupal Malani, M.D., and Laura Medford-Davis, M.D., wrote in the report.
For example, more than half (54%) of large independent practice docs and 30% of small independent practice physicians said the pandemic "has shown me the benefits of working for a large practice outweigh the benefits of working in a smaller practice."
Four in 10 physicians who responded said they are now more likely to pursue employment as a result of COVID-19.
Meanwhile, more than a quarter of independents are considering selling their practice or partnering with a larger entity due to COVID-19.
In 2019, 75% of responding physicians said they preferred to join an independent physician group while 41% said they preferred to join a hospital or health system. After COVID-19, nearly 90% of respondents said they preferred to join an independent group while 28% preferred to join a health system.
However, the report said, 26% of physicians who joined a practice or health system reported “buyer’s remorse,” stating that they were interested in returning to self-employment.
"As health systems explore the next chapter of physician acquisition, our research in the healthcare sectors suggests all parties should deepen their understanding of physicians’ needs," the authors wrote. "Clear communication between health systems and physicians on the expectations and benefits of alignment, including the implications for physicians, their teams, and their patients, will be important considerations in building longer-term successful relationships."