Physicians young and old are being enticed by the benefits of group practices, benefiting industry companies
Los Angeles, CA (PRWEB) May 23, 2013
Over the past decade, the traditional model of healthcare delivery has been gradually transforming, which has affected the Medical Group Practice Management industry. “Burdened by medical school debt and seeking regular hours, more young physicians are opting out of private practices and instead joining hospitals or other medical groups,” says IBISWorld industry analyst Anna Son. In addition, “faced with rising operating costs and reimbursement pressure, a number of older physicians are selling their practices and moving into salaried jobs.” In 2013, only about one-third of US physicians will be truly independent (i.e. not affiliated with any group), compared with 57.0% in 2000.
The shift away from small practices is further driven by growing concerns over rising healthcare costs, medical errors and changes in payment systems. “Joining larger practices, such as medical groups, offers a number of advantages,” explains Son, “including increased negotiating power with insurance carriers, greater purchasing power, operating efficiencies and the ability to withstand any demand fluctuations.” Consequently, the Medical Group Practice Management industry is growing as more physicians integrate into larger provider networks. During the five years to 2013, IBISWorld estimates that industry revenue has grown at an annualized rate of 5.8% to $275.5 billion, including 6.9% in 2013 alone.
During the next five years, growth will be driven by healthcare reform provisions and aging demographics. There are a number of provisions that are expected to support coordinated healthcare delivery, thus encouraging physicians and other providers to consolidate. For example, the implementation of electronic health records (EHRs) can be complicated for small healthcare providers without adequate financial and technical resources. As such, smaller providers are encouraged to join larger providers that offer support systems. In addition, providers that demonstrate the meaningful use of EHRs will receive financial incentives under healthcare reform.
At the same time, ongoing shortages of medical personnel may restrain rapid industry growth over the next five years. In light of healthcare reform that will expand health coverage and subsequent demand for healthcare services, the dearth of physicians and nurses can adversely impact the industry by delaying care. Only about 3.9% of medical group practice management companies encompass more than 20 physicians, which indicates the relatively small size of industry companies. As such, the industry is highly fragmented and his low market share concentration. Industry leaders, though small, include Kaiser Permanente Medical Group and Cleveland Clinic. For more information, visit IBISWorld’s Medical Group Practice Management in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises medical groups of physicians of various disciplines, including primary care physicians and specialist doctors. Medical group practices are defined as three or more physicians engaged in the practice of medicine as a legal entity sharing business management, facilities, records and personnel.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
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