From primary care physician employment to private practice: easing the transition

In most cases, the practice acquisition and employment strategy of the 1990s has backfired, with acquired physician practices losing in the range of $50,000 to $100,000 or more per physician annually. There are two alternatives for addressing the operating deficits incurred from practice ownership and physician employment: (1) restructuring through the implementation of network-wide and practice-specific initiatives to improve financial performance; or (2) wholesale (i.e., all practices) or selective practice divestiture, depending on the individual practice financial performance and "fit" with the physician network strategic priorities. Unraveling a decade's worth of physician-health system relationships that are grounded by the notion of acquisition and employment is going to be a complex process for both parties. But given the magnitude of financial losses on acquired practices and the inability of health care providers to sustain future losses, there simply are not options beyond restructuring or divesting these relationships.