Growth is still anticipated for many, despite challenges
The majority of doctors are now employed by hospitals, health systems, or private equity firms. When asked about the state of independent health care physicians today, over a third rated it as poor or terrible, while 32% said it was acceptable and 27% said it was good, with 6% putting it as excellent.
Some had concerns about the future of the industry, with 29% rating it either extremely or very threatened, and 44% rating it as somewhat threatened.
The survey found a gap between practice owner’s perceptions of the industry and the state of their own practice. Only 7% rated the state of their practice as poor, and no one rate it as terrible. Most (44%) rated their practice as good, 18% as excellent, and 31% acceptable.
In fact, many respondents indicated their practice would grow this year, with 37% anticipating increased revenue, 28% expecting to grow profitability, 27% planning to add new providers, 22% anticipating adding new services, and 6% intending to establish new offices or locations. However, 36% of respondents say they don’t anticipate any growth this year.
Those who didn’t anticipate growth were also more likely to rate the state of the independent practice industry as poor or terrible.
Despite the challenges, a majority of practice owners expect to remain independent over the next 5 to 10 years, according to the survey. A total of 26% find it completely likely, 30% find it very likely, and 25% find it somewhat likely. Only 19% say it was unlikely, with 11% selecting hardly likely and 8% selecting not at all likely.
While they may plan on staying independent, respondents point to colleagues who moved on: 59% know a practice owner that retired, and 54% know a practice owner that had sold their share of the practice to a large health care provider. Nearly half (46%) know a practice owner that closed their practice and 42% know an owner that quit to work for a large health care organization.
There wasn’t as much movement away from corporate medicine, with only 39% knowing an owner that sold their practice to a partner or another independent practice, and just 30% knew a provider that left a large health care organization to open an independent practice.
According to the survey, the primary threats to independent practices, as cited by owners, are low reimbursement rates (68%), declining margins/profits, and staffing shortages (both at 50%). Other concerns include overhead (49%), difficulty with health insurance and rising health care costs (both at 46%), and competition with larger health care organizations (44%). Low reimbursement rates cause significant pain, as shown in the survey. The majority (68%) of practice owners want improved reimbursement rates, which ranked highest for the most important improvement needed in the industry.
Will the practice owners stick it out? The results are mixed. When asked if they’re likely to sell their stake in the practice or retire in the next five years, 35% say they’re at least somewhat likely. But another 17% say it’s very likely and 6% say it’s completely likely. More than a quarter (27%) say it’s hardly likely, and 15% say it’s not at all likely.Retirement is cited by 49% of the survey respondents as the primary reason they would sell their stake in the practice.
A majority of owners (64%) say they would retire completely or in part if they were to sell. Only 27% say they would work with the new owners. Another 20% say they would pursue a career outside of health care, and 17% say they would volunteer.
Even though many practice owners would consider selling in the next five years, the majority do not want to sell to large health care organizations. When asked if they would be more likely to sell to an independent practice or a large health care system, 62% say an independent practice.