Three of four physicians expect to purchase, buy into, merge or sell their practice within the next four years, a survey of small practices shows.
Financial uncertainty in the healthcare sector is changing the way independent physicians and other medical professionals run their practices, according to a survey commissioned by TD Bank.
The survey of more than 340 small practices found that 50% of doctors either have or would consider purchasing, buying into, merging or selling their practice, and 73% expected to do so within the next four years.
Nearly half of the respondents (46%) said they're being pushed to make the change because it's becoming too expensive to run a practice.
"We are seeing a growing trend of more healthcare providers buying into practices with a partnership or purchasing an existing practice because they are seeking added financial security and well-established businesses," said Dan Croft, head of Healthcare Practice Solutions at TD Bank, in a media release.
"The survey findings reflect a shift in the industry because of the rising cost of doing business—from technology to insurance."
Key findings include:
- Practices are growing: 43% of respondents are expecting to increase revenue over the next two years. Women (56%) and Millennials (75%) are most optimistic about expected revenue growth.
- More women are becoming practice owners: While respondents on average have been in practice for 16 years, 36% of women report they have owned their practice for less than five years, while 47% of men have been in practice for more than 20 years.
- Practitioners face a range of challenges: Respondents cited timely reimbursements from insurance providers (52%); managing overhead costs such as supplies, rent and taxes (51%); and keeping up with technology (35%) as current issues.
In addition, 56% of medical professionals expect partners or colleagues to take over the business when they retire, and 30% will have to postpone their retirement to later than originally planned.
"It is understandable why many near-retirement age physicians plan to cut back on time in the office, but this is not the best strategy," Croft said. "Decreasing hours or patient load can negatively impact practice or partnership value, thereby affecting retirement plans.
"While most physicians said they are confident they will have enough money to retire, that's not always the reality, and often it is due to the fact that they made changes in their schedule or practice that derailed their plans."
The survey was conducted by MARU VCR&C on Aug. 7-12.