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Survey: Doctors consider new business models as future grows more uncertain

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Some doctors are reconsidering their business model as the industry changes.
Some doctors are reconsidering their business model as the industry changes. - (Thinkstock)

Faced with the uncertain future of health care reform, nearly half of the New Jersey doctors responding to a new survey are considering changing the structure of their practice this year, which could include joining forces with another practice or going to work for a hospital system.

The Roseland law firm Brach Eichler conducted the annual survey among nearly 150 physicians statewide, including solo practitioners, members of a group practice or employees of a health care facility, in July.

"The health care environment is a dynamic one in New Jersey, characterized by tremendous competition and an increasingly complex regulatory environment," said John Fanburg, managing member and head of the health care practice at Brach Eichler.

Physicians with a negative outlook cited increasing insurance premiums, declining reimbursements, increased competition and declining autonomy as the most influential factors.

Fanburg said more than 63 percent of respondents said their reimbursement rates decreased from last year.

"A tremendous number of physicians in New Jersey have sold their practices to hospitals or large physician groups," echoing a national trend, Fanburg said. He said hospitals throughout the state are creating accountable-care organizations, mostly with Medicare, which are groups of health care providers and hospitals that come together to deliver higher-quality care, reduce duplication of services and spend health care dollars more efficiently.

Fanburg said hospitals are acquiring physician groups "because as they develop their ACOs, they want to establish their footprint … they need to capture physicians before the other hospitals capture the physicians. So there is competition to get these doctors into these hospitals systems."

Fanburg said these contractual arrangements are generally three- to five-year commitments, and what happens when that time is up "no one really knows at this point. The one thing everybody does acknowledge is the health care marketplace and the landscape is going to be very different — we just don't know how different."

He said physicians are frustrated "that there is a lack of clarity as to where they are going, and that is very unsettling."

Fanburg said in general, reimbursements to doctors are expected to decline in the future. "But I think there is going to be positive economic incentive for physicians to provide quality care and to be efficient. But the whole notion of just being paid for what you do, regardless of the quality and regardless of the efficiency — I think we can all assume those days are coming to a close."

The survey also revealed about one in four physicians has joined an ACO, and of those that have joined, the vast majority — 95.2 percent — said they have not seen any benefits as a result.

"The truth is, we simply do not know yet whether there are any meaningful benefits associated with joining an ACO, or whether we simply have not seen them yet," Fanburg said.

Reporter Beth Fitzgerald is @BethFitzgerald8 on Twitter.

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Beth Fitzgerald

Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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