Study: Physicians’ Practices Facing Financial Challenges
Only one in four physicians reports that their practices are “robust” and thriving, while nearly 40 percent say their practices are “shaky” or struggling to keep their doors open, according to the 2013 Physician Compensation Survey of nearly 1,500 doctors by Physicians Practice.
One in 10 of the physicians responding to the survey said they may close their doors within the next one to five years, and another 27 percent said they are working harder just to maintain income, the study found. Another 33 percent had mixed reviews and reported their practices were not growing significantly.
Within the next five years, nearly 16 percent of doctors plan to retire or sell their practice, and another 14 percent hope to become employed by a larger health system. The survey group included sole practitioners (26.3 percent), groups of up to nine physicians (40.5 percent), groups between 10-20 physicians (10.8 percent) and groups with more than 20 physicians (22.4 percent).
One major part of the problem is increased overhead. For 40 percent of physicians’ practices across the country, more than half of their revenue goes to paying overhead, and nearly 60 percent pay over 40 percent in overhead. A majority say they are spending more on overhead this year than last.
Reimbursement decreases and changes stemming from healthcare reform are also seen by physicians as limiting income.
Four of five of the physicians surveyed currently accept Medicare. Nearly 30 percent of them say uncertainty about reimbursements has affected their willingness to continue accepting Medicare.
Some – 17.6 percent – say they may stop accepting new Medicare patients, 5.5 percent may stop seeing Medicare patients altogether and another 6.6 percent are exploring new direct-pay models that would eliminate third-party payers from the practice.
Only 70 percent currently accept Medicaid. Of those, 10 percent say they may stop seeing new Medicaid patients, and 5 percent may stop seeing Medicaid patients altogether. Another 15 percent are not sure what they plan to do.
What steps have physicians taken to boost revenue in their practices?
A third have increased the number of patients seen per day, and about half have added ancillary services or taken on work outside the practice. A small percentage have even started making fee-based house calls. And one third haven’t done anything to increase revenues, the survey found.
More than half of the physicians responding said they were disappointed in their net income from their practice. About 30 percent said their personal income was lower than last year, 39 percent said it was about the same, 13 percent said it was up by less than 5 percent and 18 percent said it was up more than 5 percent.