Medical Group Management Model
In 2010, large number of physician owned medical groups pressured by new Medicare cuts have sold or contemplate selling their practices to hospitals and health systems. Some industry experts predict that in near future most of medical practices will be owned or affiliated by a hospital or large networks. However, there are viable in trying economic times.
There are very practical, effective and profitable alternatives to selling a medical practice to a hospital. At the outset, if the past has taught us any thing about selling medical practices to hospitals/health systems is that in long run it does not work for physicians and sometimes for the buyer. Eventually, the physicians end up buying the practice back. Although, selling a medical practice to a larger organization may provide immediate relief to the physician group from pressing challenges of operating a medical practice; it does not provide physicians or the group with freedom and flexibility of owning and controlling their practice. At best the relationship between a hospital and employed physicians and independent practitioners is like the difference between living in a rental house and a house you own. Most people would like to live in a house they own and similarly most physicians happen to desire owning their medical practice. The question is how to implement this goal.
A somewhat new medical group management model presently gaining popularity provides in-part or complete outsourcing of administrative tasks including positions such CEO, Executive Director, Administrator, CFO, and COO to a management firm. Under this system of outsourcing the physicians continue to maintain total control of their practices at the same time disengages from managing the day-to-day operations. This model guarantees the physicians to focus on practicing medicine and business professionals to manage the business. Basically the same thing would take place if a practice is sold to a hospital with the exception of the physicians being employees of the hospital.