We think so.
You’re not alone if you’re a physician experiencing burnout, but you already know that. According to the 2018 Physician Foundation Survey, 78 percent of physicians are feeling burned out, and 55 percent describe their morale as negative, consistent with previous years.
For a long time, physicians have been dealing with multiple challenges—managing patients and the business side of their practice; living on an income that doesn’t match their responsibilities and education; working at full patient capacity and beyond; and staying constantly vigilant in an unpredictable industry. But according to the Physician Foundation Survey, it’s patient relationships that keep physicians motivated even in the face of these challenges.
In other words, despite all these obstacles, many physicians still love what they set out to do—caring for patients.
Is there a way to tackle these challenges and give physicians more time to do what they love? An obvious solution would be to outsource practice management to business experts, which would leave physicians in their favorite role—serving patients and providing outstanding care. Our healthcare advisors want to help physicians achieve this ideal situation.
That’s why we work with physicians on three different paths, including Hospital-Employed Physician Groups, Physician Practice Management Companies (PPMCs) and professionally managed independent medical groups. This last option, a professionally managed independent medical group, allows physicians to maintain ownership of their practice while essentially outsourcing all management and operations activities.
Each of these solutions comes with a different set of pros and cons to carefully consider before entering into a long-term financial agreement. When it comes to outsourcing, physicians need to be careful to choose the option that best reflects their current reality and future goals. Our CSH professionals can guide a medical group through the decision-making process to select the right path and quality companies with whom to partner.
Is a PPMC the right choice?
a PPMC purchases and manages your practice, infusing it with often badly needed capital that increases physician revenue in the short term. In the mid-nineties, this was a highly popular option and it has made a comeback. PPMCs are slowly filling the gap that Hospital-Employed Physician Groups and traditional banks have left open.
But before physicians sign their practice over to a PPMC, they might want to consider these pros and cons.
|A long, committed partnership and a one-time infusion of capital||A 10- to 15-year contract with no opt-out clause|
|Total operations management—from staffing to billing||Loss of ownership, autonomy and control over staffing. Conflict and loyalty issues may arise.|
|Total financial management, letting physicians devote their energy to patients||Financial risk—PPMC management may be inexperienced and put your practice in jeopardy|
|Fills a key administrative role||Physicians can expect a new PPMC owner through the equity markets every 3 to 5 years|
Is a Hospital-Employed Physician Group the right choice?
Like PPMCs, Hospital-Employed Physician Groups can be safe havens for physicians who no longer want to be responsible for the day-to-day management and operations of their practice. Once employed by a hospital, they have income security, steady work hours and less involvement in keeping up with changing government regulations.
Before an independent physician group agrees to become employed by a hospital, they might want to consider these pros and cons:
|Income security||Less potential earning power than independent physicians and no control over the compensation model|
|Little involvement in changing government regulations||Dealing with the hospital’s patient care and workplace policy rules. These aren’t easy to change in a hospital bureaucracy.|
|Total management of operations—from overhead and staffing to billing and collecting.|
|A loss of control over the ability to hire and fire staff to improve care and productivity|
|The hospital brings you patients.||You have less control over the type of patients you see.|
You may not have enough work or patients. Hospitals may buy practices to head off the competition and employ more physicians than they need.
|The hospital has a strong incentive plan to improve care and increase revenue.|
|You may not agree with those incentives.|
|You have job security.||Can you leave and go someplace else or return to private practice? Did you sign a non-compete? What are the terms of your contract?|
Is an independent group that simulates a PPMC the best choice?
A new possibility arising among physician groups is an independent group that simulates a PPMC. We’re referring to a third party employed by the group that would manage finances and operations—from overhead and staffing to billing and collecting. However, the physicians would retain all ownership, autonomy and decision-making power. The third-party, such as an accounting and consulting firm like CSH, would only deliver recommendations, acting as operations manager, financial advisor and partner.
Before an independent physician group agrees to this type of partnership, they might want to consider these pros and cons:
|Low-commitment. A 3- to 5-year contract with an opt-out clause, so physicians can change the arrangement or switch practices if the situation isn’t working.||Physicians lose the income guarantees other contracts provide and are responsible for increasing their revenue based on CSH’s recommendations.|
|With the help of CSH, physicians can build strong relationships with financial institutions for ongoing financing.||They lose the one-time capital infusion provided by a PPMC or the ongoing financial support provided by a hospital.|
|CSH provides total operations management—from overhead and staffing to billing and collecting. They also provide a dedicated staff person to run your practice, but you control decision making.|
|Financial security and complete transparency. The guidance of CPAs with healthcare expertise at a top 100 accounting firm|
|You’re involved in all financial decisions, and responsible for analyzing recommendations and making changes necessary to increase revenue.|
|Consistent management support while you retain the rights to sell or merge in the future||You have complete control over whether your group fails or succeeds.|
How we can help
If your physician group is struggling, and you need a financial advisor to help you weigh your options, CSH healthcare experts can provide the consulting to help you carve out a path back to wealth and wellness. Boosting morale, alleviating burnout and achieving the revenue you need to maintain your lifestyle are all possible with the right financial solution. Contact Bill Clayton or Ryan Peters for a consultation.