Physician Practices
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 210,600 physician practices in the US consist of primary care and specialty practices. Primary care physicians are responsible for monitoring an individual’s overall medical care, performing physical exams, and treating minor illnesses. Primary care practices include general and family practices, internal medicine, pediatrics, and obstetrics/gynecology. Specialty practices focus on a particular area of medical care and may also perform surgeries to treat problems. Specialists include allergists, cardiologists, dermatologists, gastroenterologists, general surgeons, ophthalmologists, orthopedists, psychiatrists, and radiologists.
Lower Reimbursement Rates
Physician practices are highly dependent on reimbursements from private insurance companies, Medicare, and Medicaid.
Adapting to Changing Standards
Practices must ensure their billing software is ready for new billing codes and claim submission requirements, or they face disruptions in their cash flow.
Industry size & Structure
The typical physician practice has a single location, 16 employees, and about $3.2 million in annual revenue.
- There are over 210,600 physician practices in the US with about $504 billion in revenue and over 2.5 million employees.
- There are over 461,000 physicians working in office-based practices.
- Over 860 million patient visits are made annually to physician practices.
- There are two types of physicians - MD (Medical Doctor) and DO (Doctor of Osteopathic Medicine). Both are qualified to perform all types of treatment, including surgery, but DOs emphasize the body's musculoskeletal system, preventive medicine and holistic care.
- Education and training requirements for physicians include 4 years of undergraduate school, 4 years of medical school, and 3 to 8 years of internship and residency. There are 143 accredited medical schools in the US for MD degrees and 41 accredited schools for DO degrees.
- To practice medicine in the US, all physicians must pass either the United States Medical Licensing Exam (USMLE) for MDs or the Comprehensive Osteopathic Medical Licensing Exam (COMLEX) for DOs.
Industry Forecast
Physician Practices Industry Growth
Recent Developments
Nov 1, 2022 - Flu Season Off To A Strong, Early Start
- Influenza is hitting the US unusually early and hard, according to the US Centers for Disease Control and Prevention. Flu season usually lasts from October to May, peaking in December and January. A record number of people were hospitalized in the month of October. “It’s unusual, but we’re coming out of an unusual covid pandemic that has really affected influenza and other respiratory viruses that are circulating,” said Lynnette Brammer, an epidemiologist who heads the CDC’s domestic influenza surveillance team. Activity is high in the south and southeast and is starting to move up the Atlantic coast.
- Physician practices saw a 20.2% increase in charges per claim, an 11% raise in the allowed amount per claim, and a 37.9% increase in new patient visits following a private equity acquisition, according to a study published in JAMA Health Forum. Private equity acquisitions may help practices improve technology and operations, but firms tend to have short-term financial goals, which may lead to adverse access, quality, and spending outcomes, according to the study. The increase in patient visits may reflect changes in management and practice operations or overutilization of profitable services and low-value care, the study suggested. This could lead to higher healthcare spending without corresponding benefits.
- "Value-based" contracts still generate a low percentage of revenue for physician groups, according to the Medical Group Management Association (MGMA). A report on 2021 data from more than 2300 organizations across a variety of specialty and practice types found that value-based contracts accounted for 6.74% of revenue in primary care specialties, 5.54% in surgical specialties, and 14.74% in nonsurgical specialties. The median revenue amount from value-based contracts was $30,922 per FTE physician or nonphysician practitioner, according to MGMA.
- The US Department of Health & Human Services (HHS) has renewed the Public Health Emergency (PHE) declaration for COVID 19 for another 90 days, beginning on October 13 (the date the PHE was previously scheduled to expire) and extending through January 11, 2023. Key regulatory flexibilities and emergency funding sources that are linked to the PHE include but are not limited to 1135 Waivers; Medicare and Medicaid rules regarding Medicare coverage of telehealth, supervision of medical residents, Medicare and Medicaid diagnostic testing, provider-based hospital departments, and the Medicare Shared Savings Program; flexibilities and funding sources established via the Families First Coronavirus Response Act and the CARES Act; and relaxation of certain federal HIPAA privacy and security rules. HHS will provide states with 60 days notice prior to the termination of the PHE.
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