Alternatives to Selling Medical Practice
Large number of medical groups frustrated and pressured by new Medicare cuts have sold or contemplate selling their practices to hospitals and health systems. There are viable alternatives to selling a medical practice in trying economic times.
There is no single solution to accomplish the goal of maintaining your medical practice and not to go bankrupt or to sell the practice.
OPTION ONE – Hiring Consultants?
There are plenty of medical practice consultants out there who offer advice to physicians about operating various segments of a medical practice. Now, would hiring a consultant really help a medical practice to be sustainable and more profitable and give enough incentives to physicians not to sell their practice? Perhaps. Depending on the consultant, it is very much possible that a medical practice can improve its operations and bottom-line with consultant advice. However, there needs to be a “competent business leader”* in-house to effectively incorporate the consultant’s advice.
Hire a consultant without a competent in-house business leader and the chances are high that you would be wasting your money, time and effort.
*Who is or can be the “competent business leader” is a subject for another article.
OPTION TWO – Outsourcing Administrator/
There are a growing number of firms offering physician groups to outsource their top administrative personnel, such as Practice Administrator/
OPTION THREE – Complete Outsourcing of Administrative function?
This option should be seriously considered by physician groups prior to selling their practice to a hospital/health system, because it does provide very similar result while physicians maintain the control and ownership of their practice. Under the complete outsourcing the contracting company takes over all of the administrative functions of the practice and may hire some, most or all of the group’s employees and place them under its payroll. The major difference between this option and hospital owned and operated practice is that under this option the physicians continue 100% control of their practice and pay a fee to a management company to run the administrative functions for them.
This option can be ideal for physicians who desire to focus on practicing medicine and leave the nitty-gritty operations of a business to those well qualified to handle such matters.