Medical Billing ServicesRevenue Cycle Management (RCM)

Why are Medical Practices Being Sold Out to Competitors?

The Medical practice turf comprising of private practices, independent or groups has been on a gradual decline over the last 30 years. These developments throw light on the fact that physicians are moving away from private practices selling their practices to hospitals, medical centers, and multi-specialty hospital chains. In recent times, there has been a surge in practices even being sold out to private-equity firms.

Many private medical practices physicians have seen increasing challenges over the last 20 years in areas of regulations and compliances that make it difficult to focus on patients. Some crucial point of concerns that is worth sharing is:

  • As per the 2016 Survey of American physicians by The Physicians Foundation, physicians spend 21 percent of their practice time in non-clinical paperwork which translates to 168,000 physician FTEs not attending or treating their patients.
  • 80 percent of physicians are overworked to full capacity giving little or no scope to take in newer patients.
  • The medical domain happens to be inordinately regulated with exhaustive compliance rules and regulations.
  • Payment models are moving from fee-for-service to value-based structures.
  • Only 14 percent of physicians are in a position to provide for the highest quality of care.
  • Practices in the dermatology, primary care, pain management, dental, anesthetics are increasingly being sold to private corporations and equity firms. Per Bain & Co.’s 2015 Global Healthcare Private Equity Report, $29.6 billion was invested in healthcare in 2014 by private equity firms/investors.
  • The market is increasing every year where competitors are offering deals to medical practices.

Added to the above, is the way the Insurance industry functions, and the complexities that come with claim denials have caused many practices to rethink or re-strategize altogether. The United States has 1,500 different third-party payers, such as insurance companies and HMOs, with roughly 200 serving a given region.

Dealing with 2-3 payers, working with the eligibility and verification and payer payments itself is a time-consuming task which often leads to delays or denials of claims and impacts revenues.

And the most crucial component that has had a massive impact on medical practice is social media marketing. Medical practices have been slow to take to social media platforms and embrace technology and thus communicate with their customers/patients has been wanting. Small medical practices, may find it difficult to market their expertise and services, which could be costly and time-consuming. Whereas the larger medical practices have streamlined their processes, adopted & adapted to technology and integrated technology platforms to handle most of their operations.

Today the medical practice is not just about practicing medicine but is seen as a business that can generate ROIs. And for any business to be competitive, it needs to have a market presence. For a marketing infrastructure- a website, a newsletter, and social media presence – are the three most basic components. Moreover, nearly 20 percent of patients these days are already using social media for medical research. They need answers before they even see their doctor.

Whether a medical practice is generalized or specialized, it needs to reach out to patients to inform them of their presence, showcase their strengths, and differentiate themselves from the competition.

The future is for those who want to keep up with the demands of the market without compromising on healthcare standards and widening the patient’s care base. They say when the times are tough, the tough get going! Here there are various factors to take into account- the changing patient demographics, new technology being introduced into the medical practice not just in terms of medical instruments but in the operational side where the federal and state keep demanding reports to be submitted via these online systems and also audits to be done on a regular basis, new rules and regulations at the turn of nearly every month, etc.

This can have a heavy toll on any practice if not equipped both financially or with the required infrastructure that demands heavy investment. The different number of forms, different reporting requirements, and bureaucracies and reporting audits are adding to the high administrative costs, which account for nearly 25percent of health care expenditures. So it’s either get absorbed or stand out and fight the battle!

In order for a medical practice to survive an environment of steady and consistent socio-economic drivers need to be in place. And it’s not just the competition, but one also needs to ask oneself about one’s commitment to our fellow human beings- are we being able to provide them the best within our means or would they get better treatment at another place which has better facilities and advanced knowledge to treat them?

With a mix of both – operational demands and rules & regulations & compliance in healthcare and the need to market one’s practice using social media platforms it is no wonder then that many medical practices are being sold out to competitors.


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Catering to more than 40 specialties, Medical Billers and Coders (MBC) is proficient in handling services that range from revenue cycle management to ICD-10 testing solutions. The main goal of our organization is to assist physicians looking for billers and coders, at the same time help billing specialists looking for jobs, reach the right place.

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