As financial standing improves, physicians worry about sustaining it

Today, most physicians feel financially stable. However, they are all too aware of just how fragile that security is.

Fielded by The Harris Poll, athenahealth’s fifth annual Physician Sentiment Survey polled over 1,000 primary care and specialist physicians. The survey revealed an optimistic outlook on physicians' financial footing, but lingering anxieties about how long that stability will last. Physicians in independent practices were especially anxious about mounting financial pressures.

About two-thirds of physicians taking part in this year's survey believe their practice is currently on solid financial footing, moving with a recent trend toward more financial stability among physician practices. This confidence stems from patient retention and loyalty, according to the survey.

The strong contributors to financial stability were patient loyalty and retention (59%), growth in patient volume (50%) and payer diversity (47%). These patient-driven growth factors outpaced more traditional revenue cycle management metrics, like timely claims submission (29%), minimal billing errors (25%) and clean claims performance (16%).

Physicians are increasingly looking to patient-driven growth over revenue cycle optimization alone for financial resilience, researchers stated. As such, physicians are more concerned about financial contributors, like demand sustainability, reimbursement risk and patient stickiness, they explained.

Patient growth is especially important to physicians practicing in enterprise organizations, large group practices and mid-group practices, the survey showed.

Just as financial footing is stable today, it may not be tomorrow. Physicians cited a mix of concerns and anxieties about their practice's long-term financial position.

Over half of survey respondents (52%) are very or somewhat concerned about their organization's financial health. What's more, three-quarters of respondents, including 71% of those who say their practice is on solid financial footing, worry at least once a year about their practice's financial feasibility.

Reimbursement and staffing issues topped the list of financial concerns in this year's survey. About 56% of physicians cited lower reimbursement from Medicare and Medicaid, while 38% cited reimbursement from private payers as a source of financial concern.

Moving to workforce anxieties, 47% of physicians said they worry about the cost of staff retention and acquisition, while 46% pointed to labor shortages and the ability to find and retain qualified staff.

Researchers noted that more physicians practicing in enterprise healthcare organizations and large practices were the most concerned about lower reimbursement rates, particularly from Medicare and Medicaid.

Yet, nearly all physicians representing small practices (88%) in the survey expressed concerns about staying independent amid financial concerns. Selling or merging with a larger organization can give smaller practices greater negotiating power to obtain more favorable reimbursement rates from payers. However, even these larger organizations are struggling to manage razor-thin rates.

Physicians from smaller practices are more concerned about the role of claim denials in financial stability, according to the survey.

Approximately 66% of physicians in small group practices reported concerns about claims denials. That percentage declined among physicians practicing in larger practices, with those in enterprise organizations being the least worried about claim denials.

Anxiety around claim denials was also linked to greater concerns in other cost and compliance areas, such as regulatory requirements, technology upgrade costs, medical equipment and supply costs, malpractice insurance, maintaining sufficient appointment volume, the survey found.

"Denials aren’t just a back-office problem. They’re a proxy for financial fragility," Nele Jessel, M.D., chief medical officer at athenahealth, said in a blog post.

Claim denial rates are tied to liquidity, compliance risk and long-term viability, researchers added in the survey report. Therefore, addressing denials could have a disproportionate impact on physicians' sentiment toward financial stability compared to other factors, such as rate negotiations.

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.