Despite the trend, selling your practice to a hospital isn't a surefire way to increase profits. To the contrary, physicians who give up control to hospitals may see their incomes drop, especially if their practice was well-run to begin with, according to an article in Medscape Today.

There are several possible reasons to back up the recent finding from the Medical Group Management Association that hospital-owned practices are 25 percent less productive than those that are privately owned:

• Centralized billing. Within independent practices, a symbiotic relationship between the front-desk and billing staff drive both sides to do an effective job. When centralized billing staff take over, removing that connection, the accountability and communication needed to help both groups succeed may diminish.
• Lack of physician control. When physicians lose control over their billing, they tend to loosen oversight over their practices, according to consultants. The authors also note that billing and collections are more optimal when physicians do their own billing and coding. A third-party coder, who didn't actually provide the services, suffer an obvious disadvantage in documenting and coding encounters correctly.
• Lack of performance incentives. When physicians feel more like employees, they can also feel less responsibility for the practice's financial performance. But it is possible for hospitals to recapture some of the employee and physician engagement that may be lost when a practice is no longer independent. Practices that have seen revenue dip after being acquired may want to ask hospitals to set up incentive systems to promote financial performance. It also could be worthwhile to bring billing staff back to the office, where they'll feel more involved and motivated than at a remote location.

To learn more:
- read the article from Medscape Today (registration required)

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