Turmoil and change can inspire some honest soul-searching and lead to a transition into new possibilities. And so it is for physician entrepreneurs, who are adapting to today’s medical marketplace with some creative practice arrangements.

Medical Practice Challenges
Doctors today face an onslaught of challenges. Slim profit margins, tumbling reimbursements, soaring malpractice rates and tangled red tape are all taking a toll on the nation’s body of healers. Many are throwing in their stethoscopes and leaving medicine altogether. Others are swapping their white coats for positions as consultants in business, education and other fields. Some are choosing to punch a clock, staying in medicine but content to work on salary for organizations that shoulder all the headaches.

But there are those who are fighting to preserve their entrepreneurial spirit and the right to practice medicine as they prefer. For these docs, alternative practice models are a lifesaver.

In a 2002 Kaiser Family Foundation study, three-quarters of the physicians surveyed believe they had lost a tremendous amount of autonomy in their medical practice. Many physicians feel that “outsiders”—managed care companies, payers, administrators—are pushing them to see more patients and consequently spending less time with each person. However, some physicians are using alternative practice arrangements to put cash back in their billfolds and professional control back on their side.

Cash-Based and Other Models
A number of new practice models involve cash only. Some primary care physicians are simply refusing to deal with payers, requesting that their patients pay cash for care and contact their own insurance company directly for reimbursements.

Other doctors are opting for concierge practices, where patients pay an upfront annual fee in exchange for VIP care and treatment. Patients pay out-of-pocket for the premium service, but use traditional health insurance to cover allowable expenses.

Still other medical practice models involve a creative combination of traditional practice with the sale of very specialized niche services—such as cosmetic procedures—that add a self-pay component.

Then, there are physicians who enter into job-sharing arrangements, so they have more flexibility to raise young families or allow a more gradual transition into the golden years. Lifestyle is key to these practice arrangements.

Ear to the Ground
Hospitals and medical organizations would do well to keep a pulse on how their medical community is reacting and responding to the challenges in the marketplace. Administrators must understand that one strategy does not fit all, as there are a plethora of personalities in any medical community. There are those doctors who can more easily push ahead and restructure, and those who work in quiet despair, facing liability insurance they cannot afford and a business they cannot sustain.

Administrators may be able to suggest effective resources or creative business strategies and partnerships that can help. And as economic pressures mount, hospitals should know that physicians might no longer be as participatory in hospital business. It doesn’t mean they’re disloyal: More likely, they’re grappling with the changing dynamics in their marketplace.

Consultant Allison McCarthy brings highly regarded expertise in physician recruitment, along with an East Coast perspective, to CHG. With more than 14 years of healthcare management experience, Allison offers invaluable insights on physician relations, tertiary outreach and network development, and physician recruitment. For additional information, please call 1-888-334-2500 or contact us via the Web.

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