Medical Group Management Model

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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.[1] 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[citation needed]. Eventually, the physicians end up buying the practice back[citation needed]. 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[citation needed]. 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[citation needed]. 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.


  1. ^ Harris, Gardiner. More Doctors Giving Up Private Practices, New York Times, 25 March 2010.

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