Nearly Half of All New Jersey Physicians are Considering Changing How They Practice Medicine, Says Just-Released Survey by Brach Eichler

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New Jersey Health Care Monitor reveals Practice Integration is the choice for the majority of New Jersey Physicians.

Changing reimbursement rates, increasingly complex regulatory requirements and mounting competition from other states that offer a more physician-friendly business environment are all factors weighing on practitioners here in New Jersey.

The desire to reduce expenses and increase cash flow rank among the most important factors driving physicians in New Jersey to merge or otherwise modify their practice structure this year. According to Brach Eichler’s New Jersey Health Care Monitor survey, nearly 45% of physicians are considering changing how they practice medicine in 2012. The semi-annual survey was completed by more than 400 physicians statewide, including solo practitioners, members of a group practice or employees of a health care facility, in July and August 2012.

Specifically, 52.8% of respondents said they plan to integrate with another health care organization, whether it be another single specialty or multispecialty practice, an individual practice association, hospital system or joint venture. Another 33.9% said they plan to hire other practitioners, 12.8% said they will contract with a health care facility this year, 11.9% plan to leave their practice to either join another practice or work under contract with a hospital, and 14.7% said they plan to retire. Worth noting, 11% said they were leaving New Jersey to practice medicine elsewhere.

“Changing reimbursement rates, increasingly complex regulatory requirements and mounting competition from other states that offer a more physician-friendly business environment are all factors weighing on practitioners here in New Jersey. As a result, physicians are not only looking for ways to grow their practices, but simply to remain competitive,” explained John D. Fanburg, managing member and head of the health care practice at Brach Eichler.

“The move to integrate with another practice or other health care organization has become a very viable option for physicians looking to remain competitive, bolster market share and achieve greater purchasing power in the face of reduced reimbursement rates, and we are seeing more and more in our practice. What IS disappointing, however, is seeing that nearly 25% of practitioners either plan to leave New Jersey or retire, according to our survey. In today’s environment, unfortunately, a physician may feel greater pressure to retire because the business side of practicing medicine has become an overwhelming task,” Fanburg explained.

According to the survey, reducing expenses was the reason cited most often (31.7%) for merging or modifying their practice, while 25.1% cited the need to increase cash flow, 19.1% cited the need to bolster market share, 13.6% stated that they are pressured by competing organizations that are already integrating, and 10.4% cited the need to reduce inefficiencies as the reason for their desire to integrate their practices.

In addition, the New Jersey Health Care Monitor revealed that one-third of practitioners are taking a wait-and-see approach with regard to the Patient Protection and Affordable Care Act of 2010 in terms of how it will impact their practice. Less than 10% see its potential impact as favorable or very favorable, while nearly one-third have an unfavorable or very unfavorable outlook about its impact on their practice.

Worth noting, however, is the fact that a number of respondents said they expected the Act’s mandate to purchase health insurance would lead to increased patient volume, and their practices would be busier as a result. Nearly the same number of respondents also expressed concern that this mandate would negatively impact reimbursement rates and revenue.

“More than anything, these divergent views underscore how much education is needed to help practitioners sift through yet another layer of regulation so that they can make sound decisions about how to maintain and build their practice,” noted Fanburg.

Other findings from the New Jersey Health Care Monitor include:

  •     Nearly one-third of practitioners are currently considering or have already joined an Accountable care Organization (ACO).
  •     Income last year remained nearly the same over the prior year, with 47.8% of physicians confirming this. More than 36% said their income declined last year and approximately 16% said it actually increased.
  •     Nearly 30% of practices do not yet have a corporate compliance plan though they will shortly be required to have one as the Affordable Care Act.
  •     The majority of New Jersey physicians (57.2%) would not recommend to a family member that they pursue a career in medicine.

“In 2013, we expect to see accelerated reductions in reimbursement rates. As a result, more small group practices and solo practitioners will look to affiliate themselves with either hospitals or other group practices in an effort to survive,” said Fanburg. “Sadly, too, we will surely see more physicians leaving New Jersey or the practice of medicine altogether as a result of these regulatory and competitive pressures, which will also impact patient choice and the delivery of care. New Jersey has long prided itself on its internationally-recognized health care practitioners and institutions. It would be terrible to lose some of these phenomenal resources.”

About Brach Eichler LLC

Brach Eichler LLC is a full-service law firm based in Roseland, N.J. With nearly 60 attorneys, the firm is focused in the following practice areas: health care; real estate; litigation; tax, trusts and estates; and business & finance. Brach Eichler attorneys have been recognized by clients and peers alike in Best Lawyers in America, Chambers USA and New Jersey Super Lawyers. Visit

Brach Eichler’s health care practice offers an array of services to clients across the health care field in such areas as physician and hospital contracts; corporate governance and compliance; health care mergers and acquisitions, administrative and judicial litigation; and state and federal regulatory advice. Clients reflect a cross-section of the health care industry, including large physician groups, individual practitioners, hospitals and hospital systems, medical staff organizations, physician specialty societies, health care trade associations, from long-term care facilities, home health agencies, and patients and providers seeking insurance coverage and proper reimbursement. The Chambers USA Guide to America's Leading Lawyers for Business included Brach Eichler as having among the five leading health care law practices in New Jersey.

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Nina Dietrich
Nina Dietrich LLC
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