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Healthcare Organizations are Acquiring Fewer Physician Practices

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Hospital acquisitions of private practices are slowing down in some parts of the country, Kenneth J. Terry, MA, reports over at Medscape. Given the rush to acquire over the last several years, this is certainly an interesting development, one that could impact your job search.

“In many parts of the country, hospitals are much less interested in acquiring practices than they had been,” Terry reports. “However, they continue to look for ways to more closely align independent physicians with their interests.”

Yes, you read that correctly. The rush to gobble up physician practices by hospitals isn’t as full-forced as it had been even two years ago. Acquiring is now being de-emphasized in favor of aligning.

According to David Zetter, a practice management consultant out of Mechanicsburg, Penn., “It’s down tremendously because hospitals probably have as many practices as they can handle at this point.”

Zetter said he knows of a few practices that tried to sell to their local hospitals and were rebuffed, either out of lack of interest or willingness to purchase the practice at a reasonable price.

A caveat: This trend varies based on which section of the United States you happen to be in.

The practice-acquisition market is still robust on the East Coast and “in parts of the South,” Michigan-based healthcare consultant Michael LaPenna told Terry. Acquisitions in West Michigan, Detroit, Chicago, Minnesota, Seattle, and California have slowed down because “consolidation between hospitals and practices has already occurred.”

“Some health systems grew very rapidly, and there was a feeding frenzy to acquire practices,” Kevin Kennedy of Seattle-based ECG Management Consultants said. “So in the last couple of years, we've seen some of our clients take a break and do a better job of organizing what they have.”

According to Terry, “In markets where private practices are still alive and well, hospitals are trying to align with them in other ways. They may offer management services, subsidies and technical support for EHRs, or medical directorships. But their ultimate game plan is to get the independent doctors involved in their clinically integrated networks, which will eventually take financial risk for care and lose bonus payments if they do not reach their target costs for providing care.”

As physicians who are looking for jobs, how do you feel about this latest shift in the marketplace? How will it impact your career plans and job search?

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