I get the impression that SDGs will continue to be squeezed. Perhaps not out of existence, but the financial pressures will be (have been) even more immense. Back 20 years ago, the SDGs got hammered by malpractice and other admin costs that caused the innovative among them to pool their resources to manage malpractice costs and billing operations. Interestingly, it was this financial pressure that caused a handful of SDGs to grow and transform into many of today’s large CMGs as a means of applying economies of scale to their administrative costs (coding, billing, malpractice, etc.). For example, EMP started as a SDG in Canton, OH with 8 or so docs and grew into what is today USACS; I believe that SCP has a similar story.
The problem now for the SDGs that made it this far in the expense jungle now seems to be negative pressure on their revenue streams with bundled reimbursement, bans on balance billing, etc. How is a SDG going to effectively negotiate with insurers and compete with the likes of USACS that can bring millions of patient encounters to the table?
Thus, I foresee the ascendency of the hospital employee model on the horizon. Already, hospital CEOs facing narrow margins are looking at physician billing and scratching their heads. In the past, these CEOs equated physician management to herding cats that was wasn’t worth their time and effort. Now, as hospital margins tighten and CMGs pull embarrassing stunts with balance and out of network billing, the hospital CEOs are warming up to physician employees. Look at large systems like Atrium (Mecklenberg Med Group) , Wake Forest Baptist Health (academic system with ED contracts across the Piedmont, NC), Banner Health (multiple community and academic physicians in AZ), etc. as examples of systems that are increasingly employing their own physician labor pool.
