The number of independent physician practices in the United States is shrinking rapidly, and this trend is projected to continue. Over the next five to 10 years, private practice in its traditional form – where a single practitioner or a small number of practitioners work independently to provide patient care – will continue to evolve, and existing private practices will need to decide whether to remain independent.
Technology: A roadblock to independence?
One reason why the idea of private practice is waning is technology. As electronic health records (EHRs) become the norm, practices must deploy and update this technology to survive. Truly transformative technology requires an investment, and practices must have a plan in place for deployment and maintenance because upgrades are regularly required.
EHRs are not the only form of technology a practice will need in order to face the changing healthcare landscape. Business processes, such as billing, claims submission and denials management, are also becoming automated, and practices must be able to leverage technology to streamline the revenue cycle, enhance cash flow and remain competitive.
To internally manage both EHR and practice management technology, a practice needs to have computer programmers on staff, as well as people charged with keeping up with changing regulations and ensuring the practice remains compliant. Many private practices simply cannot afford to navigate this effort on their own.
Finding a path forward
To help overcome these challenges, many practices are seeking partnerships with larger entities, such as hospitals or group practices. The amount of autonomy that a private practice can keep within these different models varies depending on the nature of the partnership.
For those practices wishing to maintain some level of independence, it may be beneficial to seek a partner that takes responsibility for the business operations of the practice without impacting the clinical side. This is how Capital Women’s Care functions. We are a multi-site obstetrics/gynecology group located throughout Virginia, Maryland and Washington, D.C. Fourteen years ago, we had 27 providers working in several practices throughout the area. Today, we have more than 140. Through our corporate office, we leverage technology to manage each practice’s billing, EHR technology and human resources, providing the practice with a stable business infrastructure upon which to grow.
When partnering with us, a practice agrees to share our name and adopt our business infrastructure; however, the practice remains clinically independent. The corporate office is not involved in setting clinical policy, implementing universal care protocols, defining treatment methods or in any way governing how physicians practice medicine. In this way, physicians can remain clinically autonomous and still be part of a bigger organization, protecting the individual practice from a large technology spend and the roller coaster of requirements and regulations that exists today.
Because of size, a large group practice like Capital Women’s Care has success in negotiating fair-priced contracts and gaining more attention from healthcare technology companies. A small private practice would probably not receive competitive rates or may not even be eligible to partner with a large integrated technology firm. Such firms tend to focus on larger organizations that cater to multiple physicians.
A large group practice also has more time to develop strong business processes. Since a physician is focused on providing care to patients, he or she may not have the bandwidth to engage in these activities. For example, we dedicated a lot of time to identifying an EHR and revenue cycle management partner (NextGen Healthcare) that matched our organizational goals for growth and efficiency. We worked to define processes and procedures for billing that addressed various scenarios. Furthermore, we defined how accounts receivable would be managed, set a cutoff time for write-offs, detailed a denials management policy and outlined cash collection procedures. By putting in this work upfront, all our practices benefit from a smoother revenue cycle process, demonstrated by our days in accounts receivable, which hovers around 20 days.
Fundamentally, our business model allows practices to focus on providing patient care while the corporate office takes care of the rest. We deploy technology, offer training, make any upgrades and keep track of changing regulations. Not only does this reduce the burden on the practice, but integrated technology, coupled with outsourced revenue cycle management, fosters better communication among practitioners, allowing for seamless data exchange and enhancing the efficiency of revenue cycle processes.
At first, a private practice might be skeptical about eschewing responsibility for business processes, feeling that it is hard to effectively manage the revenue cycle without actually touching the money. However, a practice can turn over the business functions to another entity and still keep tabs on performance. For example, we receive regular reports from NextGen Healthcare that describe revenue cycle activities in detail. We share those reports with all our practices so they can see firsthand how billing and collections are working. This allows practices to monitor business processes without having to do the work themselves. Our partner has the staff and resources to efficiently support and enhance the revenue cycle, maintaining a standard that is beyond what the typical private practice could accomplish on its own.
Make a careful choice
Private practices are going to have to make some tough choices in the near future. Taking time and reviewing options are important steps toward entering into partnerships that meet your long-term business goals. Working with a large group practice may be a valid choice, given that this model offers the ability to maintain clinical autonomy while improving revenue cycle efficiency and leveraging technology.
About the Author
Debbie Redd is president and CEO at Capital Women’s Care. For more on NextGen Healthcare: