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
Mar 1, 2023 - Proposal Would Tighten Telehealth Prescription Rules
- New rules proposed by the Biden administration would require patients to have an in-person medical evaluation before being prescribed controlled substance medications by their doctors. Federal regulators had relaxed pre-pandemic rules mandating that doctors evaluate patients in person before prescribing any controlled substances. The new rule proposals from the Drug Enforcement Agency would require an in-person appointment before any Schedule II medications, a classification reserved for the strongest drugs, may be prescribed. Prescriptions for other potentially addictive drugs – to help with pain or sleep, for example – could be prescribed via telehealth but a patient would need an in-person evaluation before obtaining a refill. Patients would still be able to get medications like antibiotics or birth control prescribed to them via telehealth.
- The Biden administration plans to end in May the national and public health emergencies (PHEs) tied to the coronavirus pandemic. The advance notice is designed to give states, health care providers, and hospitals enough time to adjust to the changes. The PHEs were first implemented on January 27, 2020. Medicare Advantage plans have been required to bill enrollees affected by the emergency and receiving care at out-of-network facilities the same as if they were at in-network facilities. This will end once the public health emergency expires. The PHEs also enabled the government to provide many Americans with COVID-19 tests, treatments, and vaccines at no charge and offered enhanced social safety net benefits.
- The US Department of Health & Human Services (HHS) has renewed the Public Health Emergency (PHE) declaration for COVID 19 for another 90 days. The current declaration begins on January 11 (the date the PHE was previously scheduled to expire) and extends through April 11. 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.
- Emergency physicians and consumer advocates in multiple states want stiffer enforcement of decades-old statutes that prohibit the ownership of medical practices by corporations not owned by licensed doctors, according to the Louisiana Illuminator. Thirty-three states and the District of Columbia prohibit the so-called corporate practice of medicine. Critics say that companies have sidestepped bans on owning medical practices by buying or establishing local staffing groups that are nominally owned by doctors, but the physicians’ have no direct control. Those campaigning for stiffer enforcement of the laws say that physician-staffing firms owned by private equity investors are the most egregious offenders. Private equity-backed staffing companies manage a quarter of the nation’s emergency rooms, according to Dr. Leon Adelman, co-founder and CEO of Ivy Clinicians, a job site for emergency physicians. The two largest are Envision Healthcare, owned by investment giant KKR & Co., and TeamHealth, owned by Blackstone. 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.
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