The Medical Practice Inflection Point: Go Private or Get Acquired?

By Molly Maloof  |  October 2, 2015

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The American Academy of Private Physicians and Kareo recently decided to collaborate to create the Private Practice Models Perspectives 2015 Survey which polled approximately 100,000 physicians surveyed and yielded 862 respondents of which 206 Private Physicians, 477 were Conventional or Fee-for-service Providers, and 179 were other. This survey is important for a variety of reasons.

We are at an inflection point in medicine where doctors are increasingly overwhelmed with the administrative overhead of running a private practice. And, the reality is that practice models are changing. There are two big trends happening.

First, some are deciding to be acquired by large hospital groups (and even private equity investors):
"Between 2005 and 2008, the percentage of medical practices owned by hospitals soared from 25.6% to 49.5% according to the Medical Group Management Association’s 2008 Physician Compensation and Production Survey. In 2010, for the first time, the number of new physicians who joined hospital-owned practices exceeded the number of first-year practitioners who became employees of medical groups owned and operated by physicians."3

Second, other physicians are deciding to keep their practices small and are looking to the following models of health care delivery:4
  • Direct primary care -- Providers usually do not take insurance but rather rely solely on the monthly/annual fee from patients.
  • Concierge models -- Providers take insurance and they charge a monthly fee or annual fee that gives them direct access to the physician. A good example of this is One Medical Group.
  • Hybrid models -- the provider has a traditional insurance billing practice but with a subset of patients under the concierge model. This works for doctors who don't want to exclude patients but want to keep their practice solvent given declining reimbursements.

One doctor writes,
"When I started in solo practice [in 1987,] it was very different then. Patients were satisfied and doctors were very happy...Reimbursements were reasonable and things went along very nicely. But that evolved over the years, in terms of lesser reimbursements, more and more overhead, less time, more stress. I was looking around and seeing at this point, every single one of my colleagues in solo practice, or at least most of them, either had sold their practices to a hospital, or joined a big group or had given up."5

Our survey was performed so we could better understand the opinions of doctors who are working in a very dynamic and rapidly chancing health care environment. We discovered that although there were only 24% of doctors had a concierge, direct pay, or another membership-based practice, 46% were either somewhat likely or highly likely to transition to one of these models in the next 3 years.
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The number 1 motivation for transitioning to private medicine was to spend more time with patients.


Physicians in private practice reported spending more time with patients, having lower daily visit volumes, and having smaller panel sizes. If we do not take a step back and look at the big picture here, we will find a huge chasm between the patient care offered in private medicine versus hospital run primary care medicine. We are expecting a continued physicians shortage and this is especially true for primary care medicine. Andrew Weil wrote in this article, Bringing Medicine Back to Its Roots:
"Physicians simply don’t have the time to be what patients want them to be: openminded, knowledgeable teachers and caregivers who can hear and understand their needs. Physician unhappiness is not only the result of the limitations managed care has placed on their earning capacity. It is also a response to loss of autonomy, loss of fulfilling relationships with patients, and, for some, a sense that they are not truly helping people lead healthier lives. Significant numbers of physicians are now quitting medical practice, and applications to medical schools are dropping precipitously."

A solution to this would be to increase the number of doctors educated in this country, which would require the government to increase funding to Graduate Medical Education.  No one wants to spend 15 minutes with their doctor and no doctor truly wants to be practicing revolving door medicine.  Screen Shot 2015-09-30 at 3.44.34 PM

We also found that one of the main challenges for doctors in private practice was finding new patients. For these doctors, it's imperative to develop coherent marketing campaigns so that their happy patients can evangelize their services to other potential patients.

A good way to do this is to try Kareo DoctorBase's patient engagement software, which allows physicians to send out post-visit surveys that allow their patients to review the experience they had in the practice. These reviews can be syndicated to Google, Yelp, and other physician ratings sites.


Our survey found that most practices are spending more than $800.00 a month on marketing.


If you are curious how to maximize your online presence, sign up for a 10 minute consultation.  It is a truly crazy time to be a doctor. We hope this article helps elucidate some of the challenges facing physicians and how their practice patterns are adapting to the changing times.

Free 10 minute consultation.

Works Cited:

Practice Model Perspectives Survey 2015

Why private-equity firms are buying up primary-care practices

Buying Craze: Hospital Groups Acquiring Physicians’ Private Practices

Concierge Medicine vs. Direct Primary Care

Meet the Hybrid Concierge Medical Practice Model

Bringing Medicine Back to Its Roots

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