Is the Private Practice of Medicine Coming to an End? What Alternatives Exist?
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Transcript of Is the Private Practice of Medicine Coming to an End? What Alternatives Exist?
Is the Private Practice of Medicine Coming to an End?
What Alternatives Exist?
OHA Conference
June 2008
Adrian R. Byrne,
Dynamis Advisors, Inc
David L. Andrick
Wilson Memorial Hospital
The Physician Shortage
Nationally the population is growing at a rate of 1% a year. (approx 3 million people) (Ohio’s rate is flat)
As 79 million baby boomers begin entering retirement age, so are their doctors.
21% of Active Physicians in Ohio are over 60 years. Life expectancy today is 77 years and rising. Changes in the practice of medicine have driven
specialization and increased the number of available procedures.
New younger physicians have different work ethics. Uncertainty about the future of healthcare industry.
Impact of Shortages
Affecting access to care Underserved and rural areas are hurting Supply and demand market forces Quality of service lines Hospitals are thrust into the limelight Alternative approaches to delivering care are
being tested
Impact of Shortage on Costs
Avg. cost to recruit physicians2003 2008
$36,000 $55,000 Cost of needing to refer patients out of the
community Lost revenue opportunities E.D. Coverage Community costs
Economic Impact of Physicians
Estimated average value of a physician to a hospital
$1,496,000 a year
Specifically:• non-invasive cardiologist $2,240,286• general internist $1,987,253• pediatrician of $697,516
Recruitment Strategies
Who is your competition – Everyone! Physician strategy must be a part of the Hospitals
Strategic Plan Retention as a strategy Get creative Retainers or FFS with recruiters Prepare for more women entering workforce Employment or Private practice options Stark Limitations
Recruitment Tools
Loan forgiveness Signing Bonus Income guarantees Join existing practices Recruiting a mature practice issues Medical directorships Stark again…..
Employment
Why Employment, Why Now?
Changes in work ethics Life style expectations More women physicians Provides lower risk for new physicians (and less
commitment) Less attractive reimbursement More complex practice administration Liability concerns Others are offering the option
Employment - Doing it Right
Hospitals have learned a lot from the last attempts to hire physicians
Practice accounting; revenue and cost management is better
Physician retention strategies are formalized There will always be three employment agreements! Create reliable referral networks for specialty service
lines Active marketing as part of the hospitals network Stark again……
Physician Network Integration -Affiliated Practices
Increasing levels of integration >>>
Employed or Hospital Affiliated Practices
Joint Ventures or
Equity Model MSO
IPA or PHO and Medical
Staff Privileges
Physician Hospital Partnering
Partnering with physicians will provide alternatives to employment but can be riskier and ultimately costlier. Can include:
Gain sharing Real Estate ventures Outpatient and ASC joint ownership MSO ownership Group Practice ownership
The Future of Private Practice
Some established employed physicians may set up on their own
Unique services that are immune to general reimbursement issues (cosmetic plastics)
Specialists with unique capabilities and reputation Continuation of large existing group practices with
member shareholders Smaller communities will see physician employment as
the only option to continue
After November 2008?
All bets are off the table……Single payer system?Dual payer system?More of the same?
Planning for the Next 10 years
there are known knowns; there are things we know we know. We also know there are known unknowns; that
is to say we know there are some things we do not know.
But there are also unknown unknowns -- the ones we don't know we don't know.“
Donald Rumsfield 2007
Questions??
Please fill out the program evaluations
Contact Numbers:
David Andrick 937- 498 - 5503Wilson Memorial Hospital, Sydney OH
Adrian Byrne 440 - 247 - 7876Dynamis Advisors, Inc. Cleveland, OH