In recent years, private medical practices have been steadily disappearing, replaced by large health systems and corporate-run facilities. For many healthcare professionals and patients, this shift is alarming, raising questions about the future of personalized care and the quality of our healthcare system. As we watch more small clinics close their doors, it's critical to understand why private practice is essential to our healthcare infrastructure—and what will happen if we lose it entirely.
The Personal Touch of Private Practice
One of the most significant advantages of private practice is the individualized care patients receive. Physicians in these settings are often able to spend more time with their patients, fostering a deeper doctor-patient relationship. In private practice, it's not just about treating a specific ailment or body system but about addressing the whole patient—taking into account their overall well-being, lifestyle, and unique health challenges. This holistic approach can lead to more comprehensive care and better outcomes in the long run.
In contrast, many corporate-run healthcare facilities prioritize efficiency over patient-centered care. Doctors in these environments often have to meet strict time limits for patient visits, limiting their ability to develop strong relationships with their patients or explore underlying health issues. The one-on-one attention that defines private practice is increasingly under threat as corporate healthcare systems dominate the landscape.
A Shift That Could Devastate Society
If private practices continue to disappear, the consequences could be profound. The increasing monopolization of healthcare by large health systems could lead to diminished quality of care, as healthcare becomes more transactional and less focused on patient well-being. Physicians are pressured to adhere to corporate policies, often prioritizing billing and revenue cycles over the nuanced, individualized care that many patients need. This shift also has the potential to exacerbate physician burnout, as doctors are forced to work within the confines of a system that prioritizes profits over people.
For patients, the loss of private practices could mean less choice in where and how they receive their care. They might find themselves funneled into health systems where standardized care pathways replace the personalized attention and care they’ve come to expect from their local, independent physician. We cannot overlook the fact that private practices are often the backbone of communities, serving patients who might not have access to the large corporate systems or who prefer the continuity of care they’ve received for years from the same physician.
The Financial Strain on Private Practices
Private practices not only face clinical pressures but also significant financial challenges, especially in the current reimbursement landscape. While reimbursement rates from Medicare have been on a steady decline, commercial payers, which historically paid higher rates, are now offering significantly lower reimbursements in certain regions of the U.S. compared to others. For instance:
In California, commercial payer reimbursement for common procedures is approximately 160% of Medicare rates, while in Florida, it hovers around 120%.
States like New York and Massachusetts see reimbursement closer to 180% of Medicare, but other regions, like parts of the Midwest, are seeing commercial rates dip as low as 110%.
While commercial payers have traditionally compensated more than Medicare, these gaps are shrinking in many regions, putting additional strain on private practices that rely on this higher reimbursement to cover operating costs. This economic reality compounds the difficulties many clinics face as they struggle to maintain financial independence.
Declining Numbers of Private Practices
The number of private practices has been steadily declining over the last decade. According to the American Medical Association, in 2012, 48.5% of physicians worked in private practice. By 2022, that number had dropped to just 26.1%, with more and more physicians joining large healthcare systems or becoming employees of hospitals.
Similarly, about 20,000 independent medical practices are estimated to have closed their doors from 2019 to 2023, a figure that reflects both financial and operational difficulties. As these numbers fall, patients lose access to the unique, personalized care that only private practices can offer.
The Challenges Facing Private Practice
One of the biggest struggles private practices face is the financial challenge of staying independent. These providers tend to focus more on patient care than on billing and revenue collection. This well-intentioned prioritization often comes at a cost—reimbursement rates for services have steadily declined over the last four years, leaving many small clinics financially strained. Medicare reimbursement rates have dropped by approximately 2% annually since 2020, while inflation and operational costs continue to rise.
Another significant challenge is the perception surrounding outsourcing revenue cycle management (RCM). Many private practice physicians have traditionally been wary of outsourcing to overseas companies due to concerns about communication barriers and a lack of control over sensitive patient billing processes. While these concerns are valid, they also point to an opportunity for innovation and improvement in how RCM is handled.
Redefining RCM: How Sloan Medical Supports Private Practice
At Sloan Medical, our mission is to ensure that private practices can stand strong against the growing influence of large health systems. We recognize that, just like physicians who treat the whole patient, RCM management should take into account the entire operation of a medical practice. Our approach to RCM goes beyond mere billing—we assess and optimize every aspect of a clinic’s revenue cycle, ensuring it aligns with the goals of the practice while supporting its long-term viability.
What if, instead of starting an RCM company because they saw the billion-dollar potential, someone started an RCM company to change the future of private practice?
We’re also working to redefine what outsourcing looks like for private practice physicians. By maintaining a high level of communication and offering personalized, U.S.-based support, we alleviate the concerns many doctors have about losing control when they outsource RCM tasks. Our aim is to partner with private practices in a way that allows them to focus on what they do best—providing top-notch, patient-centered care—without the worry of navigating the increasingly complex world of healthcare billing and collections.
A Path Forward: Supporting the Future of Private Practice
As the statistics show, the future of private practice is uncertain, but it is not without hope. With strategic support and innovation in how these practices manage their financial and operational challenges, private clinics can not only survive but thrive.
At Sloan Medical, we’re committed to helping private practices maintain their independence, offering RCM solutions that take the full scope of clinic operations into account. The future of healthcare depends on preserving these small, personalized clinics. Just as doctors treat the entire patient, we help practices optimize their entire operation, ensuring they remain a vital part of the healthcare system.
The preservation of private practice is not just about individual physicians or clinics. It’s about ensuring that healthcare remains human, compassionate, and patient-centered—an ideal that’s worth fighting for. With the right support, private practices can continue to offer the quality of care that has always set them apart from corporate health systems.
If you're a private practice physician or consultant looking for support in navigating the challenges of today’s healthcare landscape, we're here to help. At Sloan Medical, we specialize in revenue cycle management that empowers independent clinics to thrive. Get in touch with us to learn more about how we can support your practice and keep patient care at the forefront.
Contact Us:
Email: alex.nedzelskiy@sloanmed.com
Phone: (913) 228-1918
Website: www.sloanmedical.com
We look forward to partnering with you to strengthen your practice and secure a successful future in healthcare!
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