3 major issues private practices will have to reckon with

Private practices are up against a variety of challenges that will continue to put pressure on them today and in the future. 

Brighton Ncube, senior vice president of physician practices and ambulatory care at Kingman (Ariz.) Regional Medical Center, connected with Becker's to discuss the challenges private practices face.

Note: This response has been lightly edited for length and clarity.

Question: What's on the horizon for private practice?

Brighton Ncube: There are a lot of challenges facing private practice. I will highlight some of the challenges that are sure to affect private practice in the future.


Poor payer mix is a big issue for most private practices, coupled with inability to meet salary demands to keep or recruit physicians. Cost of providing care is ever increasing while reimbursements are lagging. Physicians lose money on Medicaid patients but still take care of this population because of their sense of commitment and responsibility to serve the community. Over the past three to five years, physician payments have been reduced and inflation has caused physician costs/expenses to increase. Graduating physicians carry a lot of student loan debt and they want to be compensated fairly to be able to cope, which will be a challenge to most private practices. The cost of medical equipment has doubled and, in some cases, tripled after COVID-19, resulting in higher operational costs and many private practices not meeting budget.

Recruitment and retention

Over 140,000 physicians quit or retired over the last three years, many due to the COVID-19 pandemic. Universities are not producing enough physicians to meet current and future demand. The lack of providers will have a huge negative impact if not addressed quickly. The government must be intentional in ensuring that we have enough providers that would serve the American public in the future. Private practices have a huge contribution in U.S. healthcare and supporting them will go a long way in keeping America healthy. The motivation of becoming a physician is declining and should continue unless there are incentives and positive messages being broadcasted about this noble profession.

Operational challenges

Small, independent practices are disappearing at an astounding rate. Bigger practices, 25 physicians or greater, are expected to continue to grow. Employed physician groups grew 49% in 2016, but many organizations are considering not continuing with employment but rather, have these groups create an LLC or separate entity with a governance and operating structure that clearly aligns productivity/revenues with subsidized funding. Practices that survive would be those where physicians are hungry to work hard, essentially "eat what they kill." Some healthcare leaders (physicians and healthcare executives) believe that private practices may not be thriving or still in existence over the next five to 10 years unless there are major changes in legislation, especially as pertains to reimbursements. Concierge practices may only thrive where the market can afford those services. What we know operationally is that revenues will decrease, and expenses will increase.

It is important to note that physician practices are generally not going to be very profitable in the future. Executives would need to design models that would be cost effective and ensure some level of profitability or break-even. Hospitals cannot continue to subsidize physician practices at a loss and not drive clinical value. There will be a great need to change delivery system models. We cannot continue to offer services using the same old practice models used in prior years. Private practices will need to change skill mix, focus on optimizing roles/functions requiring license task versus non-license-required tasks, including eliminating waste by implementing lean methodologies or process improvement tools. The other challenge that private practices will face would be how to navigate the world of artificial intelligence and Dr. Google. Technology is taking healthcare by storm, and private practices will need to gear up for the disruption that will be caused by different forms of technologies, especially artificial intelligence.

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