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Practice profitability outlook negative

A new index gauges physicians' outlook on their practice profitability

A new index that gauges the financial and operational health of physician practices forecasts a downward trend in profitability for the year ahead.

CareCloud, a provider of cloud-based health technology and services, and QuantiaMD, a social learning and collaboration platform for physicians, introduced the Practice Profitability Index (PPI) during the HealthBeat 2013 Conference in San Francisco on May 21.

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The companies reported that 5,012 physicians contributed their insights to the PPI during April 2013 via interactive online questionnaire and related discussion groups. The resulting index is intended to serve as an annual barometer for the operational wellbeing of U.S. medical groups in the year ahead, CareCloud and QuantiaMD said in a news release announcing the results.

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The key finding of the PPI study was that physician participants were two-thirds more likely to foresee a downward trend in profitability for the year ahead than a positive one (36 percent negative vs. 22 percent positive). Three of the top four issues negatively affecting profitability for all physicians stemmed from healthcare reform, led by declining reimbursements (65 percent), rising costs (57 percent), Affordable Care Act-related requirements (48 percent), and coding and documentation changes, including ICD-10 (44 percent).

Forty-eight percent of physician practices indicated that increased operational and billing pressures will leave them unable to accept any of the influx of 30 million newly insured Americans expected to join the healthcare system, indicating a concerning access to care issue.

Additional key findings from the 2013 PPI include:

  • Administrative demands – Fifty-nine percent of physicians said they spent more than 20 percent of their time doing administrative tasks like coding and documentation and administration.
  • Independent practice -- Of the 2,094 respondents who own their own practice, only 11 percent are “actively” looking to sell, 10 percent said they already have sold due to profit challenges; and nearly 60 percent said they are not looking to sell their practices at all.

  • Physician guidance -- As physicians adjust to the changing landscape, they value the opinions of their peers above all other sources.