Medical Professionals Consulting Firm Creative Practice Solutions Encourages Private Practices to Push Back Against Trend of Hospital Takeovers

NEW YORK, Dec. 18, 2013 /PRNewswire/ -- Among the consequences of the Affordable Care Act is that hospital acquisitions of private practices, already a noteworthy trend in the industry, has gone into overdrive. In the last 10-plus years, the proportion of specialist physicians seeing patients in hospitals who are also employed by those same hospitals has risen from 5 to 25 percent. Business consulting firm Creative Practice Solutions ( has zeroed in on this phenomenon, making a strong case for doctors in private practices to maintain their independence.

Today's shifts in the healthcare industry have more to do with business realities than with the actual delivery of care; that's why physicians in private practices lack the tools and knowledge necessary to have more control over events. Matt Dallmann, president of Creative Practice Solutions, points out that a "business skill set" is not something that's covered in medical schools, but perhaps it should be.

"While there's nothing wrong with accepting a buyout and takeover from a large hospital network, the fact is that private practices still offer advantages that hospitals cannot match," explained Dallmann. "The rewards of maintaining independence include autonomy and potentially greater profit margins. For those practices that have been in operation for many years, they have often built strong ties within the community. A hospital takeover disrupts those relationships."

For hospitals, the motivation to acquire private practices is obvious. By creating a monopoly of local doctors and specialists, they can increase the cost of care with impunity. Commercial insurance carriers reimburse hospitals at a higher rate and have little power to negotiate costs down. Plus, by keeping specialists and outpatient services under the same umbrella, hospitals can fortify their revenue streams, providing the only supply point for a commodity always in demand. While this arrangement shores up the bottom line of hospital networks, patients face significantly higher prices for even routine visits.

Private practices and hospitals charge vastly different rates for the same procedures. For example, an MRI at a private practice may cost anywhere from about $400 to $750, whereas at a hospital the same scan costs $1,600 to $2,200. Similarly, a simple office visit, assuming Medicaid reimbursement, costs $124 at a hospital but only $70 in a private practice. In every meaningful sense other than cost, these visits and associated procedures are identical.

From a healthcare reform perspective, the drive to create larger hospital networks stems from a belief that such networks result in more efficient, integrated care. With physicians, labs and other facilities all under the same roof, patients do enjoy a certain level of convenience. In addition, there's less opportunity for wasteful duplication of services. On the other hand, nothing prevents a private practice from managing an in-house lab or imaging equipment for relevant tests; traditionally, this has been a common arrangement. Only in the last 15 or so years has the absorption of outpatient services into hospital networks become so pervasive.

Creative Practice Solutions recognizes two strategies for private practices to resist the acquisition efforts of hospitals. First, doctors can spearhead their own independent businesses, but this requires an investment of time and money. Doctors will need to freshen up their business skills, too. Assembling a group of like-minded private practices is one way to gain strength in numbers. An alternative to the DIY approach is to hire a consultant. Niche consultant firms like Creative Practice Solutions have decades of combined experience navigating the troubled waters of the healthcare industry.

About Creative Practice Solutions

Creative Practice Solutions is a business consulting company geared towards Medical Professionals.  With over 26 years' experience in Healthcare administration, they have improved the functioning, efficiency and collections of both private practice and outpatient hospital departments throughout New York City.  Their sister company, VGA Billing Services, Inc., collected over $14 Million for their clients in 2012.

Creative Practice Solutions
153 West 27th Street, Suite 1101
New York, NY 10001

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SOURCE Creative Practice Solutions


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