Drop in Private Practice to Lead to Marketing Changes

As recently as 2002, nearly 70% of U.S medical practices were owned by doctors.  But now, over half of medical practices are owned by hospitals and the trend toward big medicine is expected to continue. The statistics come from the Medical Group Management Association data and suggest that big changes are in store for how health care is marketed and delivered.

The rising cost of health care means people are looking for ways to deliver services more efficiently. In many cases, it is more cost effective for larger health care systems to negotiate rates for medical supplies and to computerize patient records. But industry experts worry that the growth of large health systems will lead to an increase in rates that insurance companies pay for various procedures. Others are concerned that the personal and traditional relationship between patient and doctor will be changed as few physicians opt for private practice.

Writing for the New York Times, Gardiner Harris noted earlier this year that physicians coming out of medical school are signing on for hospital positions because they can reduce the uncertain income stream associated with private practice and reduce their on-call hours. Last year, new physicians were actually able to negotiate higher first-year salaries at hospital-owned practices instead of private practices. These higher salaries applied to both primary care and specialty positions. In addition, doctors who have made the shift to hospital-owned practices believe “the challenges of running their own businesses are simply too great” and they appreciate the opportunity to focus on practicing medicine.

As the health care delivery systems consolidate, functions like marketing and advertising will change, too. The control of ad budgets will fall into fewer hands and specialties may be marketed as only one service offered within a larger organization.

[Sources: Mathews, Anna Wilde. When the Doctor Has a Boss. Wall Street Journal. 8 Nov. 2010. Web. 15 Nov. 2010; Harris, Gardiner. More Doctors Giving Up Private Practices. New York Times. 25 Mar. 2001. Web. 15 Nov. 2010; Medical Group Management Association. Mgma​.com. 3 Jun. 2010. Web. 11 Nov. 2010]
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.