Increasing financial pressure from reimbursement issues, new technology, a changing marketing landscape and the recent pandemic have combined to make it more difficult than ever for physician-owned medical practices to remain independent. In 2018, hospitals or health systems employed 44% of physicians, up from 25% in 2012. If that trend continues, the healthcare landscape will soon look vastly different than it does today.
Even as independent medical practices struggle to survive, their importance to society cannot be overstated. Physician practices associated with hospitals charge $300 more per patient (registration required) on average than independent practices. Hospital systems have the power to set prices where they want as they grow larger and monopolize local markets, while independent practices are more vulnerable to the demands of insurance companies.
A 2019 study found that patient spending for those treated by hospital-owned organizations was 5.8% more than for those treated by physician-owned practices. It can be financially better for patients to receive their care from physicians in independent practices when possible.
In addition to cost-of-care considerations, physician shortages have increased the medically underserved populations in rural and inner-city communities across the nation. Many in underserved areas face both financial and transportation issues that make it difficult to travel far to find a doctor. Losing independent practices in these vital areas will exacerbate the problem, leaving more patients in those communities without adequate medical care.
The value of independent practices cannot be disputed. Their survival is critical to the well-being of patients, the healthcare industry and the U.S. economy. During the height of the pandemic, many practices furloughed employees and/or asked physicians to go without pay to save their practices. Clearly, those tactics cannot work long term. The struggle is ongoing, but as the CEO of a company in the healthcare space, I have seen that physician-owned practices can secure their independence by focusing on attracting new patients that will help their business grow.
Improve online visibility to get seen in search results.
Patients turn to online search in increasing numbers to find medical care. They are used to finding what they need online, and according to a report from Software Advice, 71% of the time, patients begin their search for a new doctor by reading reviews.
Physicians and practices can improve their online visibility in both organic and paid avenues to dominate search results by asking for reviews, optimizing their Google My Business (GMB) listings and setting up inexpensive brand ads. Improving their online visibility helps physicians get seen by the right patients at the right time, and it helps patients make informed decisions when they need to find a healthcare provider.
Attract high-value patients with predictive analytics and targeted ads.
Predictive analytics and AI technology can help providers identify high-value patients that will bring higher profit margins to the practice. (Full disclosure, my company and others offer these services to independent medical practices.) For several years, hospital groups have been using data banks of consumer information to predict the need for care, but it has been cost-prohibitive for independent practices to access the same technology. That is no longer the case. This information is now available to small businesses like physician-owned practices.
Practices can identify consumers at risk for specific medical conditions and with the right insurance and financial profile to improve the patient mix and increase profits. They can then send ads targeted to these identified individuals so they see the doctor’s information at critical moments when they are searching for medical care. Tapping into this predictive technology can help independent practices make the best use of their marketing dollars to grow their practice quickly.
Focus on patient satisfaction.
Patient satisfaction can drive business for independent practices in several ways:
1. Patients satisfied with their care will come back for more.
2. Happy patients leave great feedback when asked to leave a review, giving physicians a higher star rating.
3. Practices that gather feedback can make small improvements to care that make a big impact.
Independent practices can make it easy for patients to leave feedback by automatically sending survey requests via text or email. Surveys capture patient satisfaction and allow medical practices to make continual improvements in the care they provide. Focusing on patient satisfaction improves quality outcomes and is an important part of collecting great reviews that will attract new patients.
Partner with or hire experts who know how to get results.
Physicians and staff at independent medical practices cannot be expected to be marketing experts in addition to everything else they do. Instead, practices should find organizations to partner with or people to hire with the skills and expertise they lack when it comes to managing their online reputation, attracting the right patients and setting up paid online advertising.
Medical practices can safeguard their independence by taking steps to improve profit margins and use current technology to put an effective growth strategy in place, easing their administrative burden in the process. Doing so will allow them to not only survive but also thrive as a critical component to the success of the ever-growing healthcare industry.
This is the second article in my two-part series that covers how physician-owned practices can remain independent. While part two covered the implementation of effective strategies to attract new patients and help practices grow and thrive, part one discussed the importance of fortifying existing patient income.