2024 Private Healthcare Practice Review and Projections for 2025

Healthcare business magazine Medical Economics’ “2024 Physician Report” provides a comprehensive overview of the medical profession as well as exclusive data on physician salaries, practice financial health, productivity, malpractice rates, and more. As we move into 2025, understanding these current factors is crucial for navigating the evolving healthcare landscape.

Report Findings

Key findings from the 2024 Physician Report include:

• Physician Salaries: The report highlights significant variations in physician compensation across specialties and regions. Specialists in high-demand fields like cardiology and orthopedics continue to garner higher salaries than those in primary care. The data also show regional disparities, with physicians in urban and higher cost areas generally earning higher salaries than their rural counterparts.
• Practice Financial Health: Financial stability remains a challenge for many practices. For a second consecutive year, rising operational costs and fluctuating, often reduced, reimbursement rates are major concerns. The report discusses strategies practices are using to maintain financial health, such as diversifying services and improving billing efficiency.
• Productivity: Physician productivity continues to be analyzed primarily through patient volume as well as hours worked, while balancing administrative tasks. The report reveals that productivity varies significantly by specialty and practice setting, with private practice physicians continuing to face different pressures compared to those in hospital settings.
• Malpractice Rates: Malpractice insurance rates continue to be a significant expense for physicians, with rates varying by specialty and region. The financial impact of malpractice claims is also discussed, highlighting the importance of effective risk management.
• COVID-19 Impact: The pandemic’s ongoing effects are evident, particularly in the adoption of telehealth. The report examines how practices have adapted to telehealth and the long-term financial implications of these changes. Telehealth has become a crucial component of many practices, offering both opportunities and challenges.
• Secondary Income: Many physicians are seeking additional income sources to supplement their primary earnings. Popular additional revenue opportunities include consulting, medical writing, telemedicine, and cash-based services. This trend reflects the financial pressures faced by physicians and the need for diversified income streams.
• Prior Authorization: The administrative burden of prior authorization requirements continues to impact physician productivity and practice efficiency. The report suggests that streamlining these processes through operational changes and/or integrating technology could significantly improve practice operations.

Projections for 2025

As we look ahead to 2025, several trends are expected to shape the medical economics landscape:

• Increased Telehealth Integration: The adoption of telehealth is likely to continue growing, driven by patient demand and technological advancements. Practices will need to invest in telehealth infrastructure and training to remain competitive.
• Value-Based Care Models: The shift toward value-based care is expected to accelerate, with more practices facing pressure to adopt these models to improve patient outcomes and financial performance. This will require a focus on quality metrics and patient satisfaction.
• Regulatory Changes: Ongoing changes in healthcare regulations will impact practice operations. Staying informed and compliant with new regulations will be essential for maintaining financial stability and avoiding penalties.
• Technological Advancements: Innovations in healthcare technology, such as artificial intelligence and electronic health records, will continue to transform practice management. Investing in these technologies can enhance efficiency and patient care.
• Financial Management: Effective financial management will remain critical in this environment. Practices will need to focus on optimizing revenue cycles, managing expenses, establishing a leveraged care model, and developing robust financial strategies to navigate economic uncertainties.

The Role of Specialized CPAs

Given the complexities highlighted in the Medical Economics 2024 Physician Report, having a Certified Public Accountant (CPA) who specializes in serving healthcare clients is crucial and should provide the following guidance:

• Financial Management: The Healthcare Solutions Team at HBK provides tailored financial advice, helping practices optimize revenue cycles, manage expenses, and improve profitability. We understand the unique financial challenges faced by healthcare providers across the provider care continuum.
• Tax Planning and Strategy: Healthcare focused CPAs develop effective tax strategies that take advantage of industry-specific deductions and credits, reducing the tax burden on medical practices.
• Risk Management: With insights into malpractice rates and insurance, healthcare CPAs assist practices in selecting appropriate coverage and managing risk effectively, including any opportunities around captive insurance strategies for private practices.
• Adapting to Industry Changes: A specialized CPA helps practices navigate changes in technology, regulations, and patient care models, adapting financial strategies accordingly.
• Enhanced Productivity: By managing the financial aspects of their clients’ practices, healthcare CPAs allow physicians to focus on patient care, improving overall productivity and patient outcomes.

The Medical Economics 2024 Physician Report underscores the financial and operational challenges faced by medical practices today. Engaging a CPA with expertise in healthcare, like HBK Healthcare Solutions, can provide invaluable assistance in navigating these challenges, ensuring financial stability and supporting the goal and purpose of physician practices, to deliver high-quality care.