Rise of the Entrepreneurial Physician (They’re Coming Back!)

In a continuation of the seesaw we’ve seen before, hospitals are slowing their acquisition of clinical practices. What’s behind the slowdown in what was a red-hot arena just one year ago?

First, hospitals are rediscovering how difficult it can be to make a profit as the owners of clinical practices. Doctors, nurses, EHR systems…they all can get very expensive.

But that’s just the hospital side of the equation; the trend is also reversing because doctors, now less freaked out by Obamacare, are chafing at the control their hospital bosses have over them.

Having experienced hospital ownership for the last year or two, physicians understand that innovation is generally not the hospital systems’ dominant trait. The doctors want to deliver the best care possible, and make the most profit possible. Relying on the current hospital system structure to meet their goals doesn’t seem logical to them.

So what’s the practical upshot from doctors striking out on their own again? One result is the best hospitals will figure out they need to create a win-win for themselves and the physicians. They will have to work with the physicians to offer payers a proposition that can’t be ignored. Look for services to be increasingly bundled allowing payers to get some economy and predictability in the fees they incur.

In our view of this healthcare world, the doctors are the on-the-go businessmen who need a place to practice his craft. In this scene, the hospital is Kinko’s giving the businessman all the business tools and support he/she needs in a convenient location.

Does this mean that the hospital’s role will diminish in the future and that physicians will exert more influence? Yes. The traditional hospital structure where these facilities act as the center of the healthcare universe is going away. It has to; it’s just too inefficient. In its place, we’ll see more entrepreneurial docs and better, more affordable care. Bring on the future!

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