CareCloud, a provider of cloud-based software and services for medical groups, has announced the results of its annual Practice Profitability Index (PPI), one of the largest national efforts to study the operational health and profitability outlooks of U.S. medical practices. Leading the findings in the 2015 study is a mild upswing in projections for profitability among the more than 5,000 physicians surveyed.
The PPI was conceived as part of a partnership between CareCloud and QuantiaMD, an award-winning web and mobile community for physicians, to serve as a barometer of the current state of physician practices and provide insight into physician outlooks for the year ahead.
Overall Findings
While physicians expecting a downward profitability trend in the coming year still outnumber those with positive perspectives—31% versus 24%—the positive group grew year over year. What’s more, downward projections no longer dominate; the flat forecast group was the largest in this year’s PPI (35%).
Despite the shift, challenges to physician practice profitability have not subsided. The index shows that physicians continue to grapple with declining reimbursement, rising costs, and regulatory changes. However, they’re actively investing in new ways to shore up practice operations and boost profitability, with technology playing a key role.
Recent Trends Impacting Physician Practice Profitability
Key trends impacting physician practice profitability include:
1. Declining reimbursement remains the top threat to physician profitability.
Declining reimbursement and rising costs were the top two challenges again this year, but the transition to ICD-10 replaced the Affordable Care Act at number three.
2. ICD-10 Seen as Major Challenge to Profitability
While declining reimbursement (62%) and rising costs (55%) remain the top threats to practice profitability, regulatory shifts are close behind. Physicians completed the survey in July and August 2015, with the October 1, 2015 ICD-10 deadline looming on the horizon so, unsurprisingly, ICD-10 took the number three spot (52%) in place of the Affordable Care Act.
3. Fewer Physician Owners Looking to Sell Their Practice, Despite Financial & Admin Pressures Mounting
Physicians’ ownership plans reflect the mild uptick in profitability sentiments. 59% of physician owners said they were not looking to sell or merge. Last year, when asked about selling, a lower share said they were not looking to do so (53%). However, the pressure has become too much for a substantial share: almost one-quarter are looking to sell/merge or considering it, citing excessive administrative work as the top reason. Administrative tasks continue to burden physicians across the board: more than 60% spend a day a week or more on them.
4. Billing, Staffing, and Technology Are Key Targets for Improvement
Less than half of respondents rated their current staff, technology, and processes as “effective” or “very effective” at securing quick and proper payment for patient care. Fittingly, when asked about targets for driving operational improvement in their practices, billing and collections processes, staffing, and technology topped physicians’ lists.
5. EHR “Rip and Replace” Trend Continues
The PPI revealed that the “rip and replace” trend around core IT systems is still going strong. Almost 20% of physicians plan to replace their practice management (PM) and/or electronic health records (EHR) systems in the coming year. Why? Current systems don’t integrate with other technologies (39%), are hard/slow to use (37%), and/or are not cost-effective (33%).
6. Lack of EHR Integration, Usability Driving Dissatisfaction and Profits
Physicians replacing their PM and/or EHR systems are doing so primarily because their current systems do not integrate with other technologies (39%), are hard to use/slow them down (37%), and/or are not cost-effective (33%). While lack of integration was a new option in this year’s survey, usability and costeffectiveness were key drivers in 2014 as well. Physicians appear to be growing increasingly frustrated with hard to use solutions, as that figure jumped six points from 31% in 2014 to 37% in 2015.
For more information, access the full 2015 PPI report here
