Changing Practice of Medicine
The medical healthcare system has suffered many changes recently. These changes carry both economical and non-economical changes, however, the financial impact is seen in all directions. Reading the 12th chapter “The Changing Practice of Medicine” in the book Health Policy Issues: An Economic Perspective by Paul J. Feldstein, many aspects of changes in the healthcare system have been discussed. Much attention is paid to the structural changes in medical care. Paul J. Feldstein points out the fact that being the solo practices medical specialists has transformed into larger medical groups. More changes have occurred which had an economic impact. Thus, the physicians became specialists due to the development of innovative technologies. The article under consideration dwells upon the main changes which have occurred in the medical healthcare system and how these changes impacted the economical situation in the sphere.
Dwelling upon the changes which happened in the medical sphere Feldstein (2007) states that the particular medical groups serve the different needs of the patients. Thus, there were two large groups, single groups, and multispecialty groups. However, the single physicians have remained, but their place in the sphere has become too limited. Single specialists do not have an opportunity to compete with larger groups due to the number of services offered by solo physicians. Larger medical groups have an opportunity to offer managed care with the professional services offered by different specialists. This allows for the larger medical groups to be more economically effective.
Feldstein (2007) states that the growth of the managed care practice had the following impact on physicians. First of all, the change forced “physicians to deeply discount their fees in return for a greater volume of the plan’s enrolls” (Feldstein, 2007, p. 154). Second, the enrollee access to specialists was reduced. It means that the managed care provoked the increase of the demand for the services offered by the primary physicians rather than those provided by the specialists. Patmas (2010) also conducted research and managed to prove that primary physicians remain economically effective for hospitals. Considering the economical changes in medical health care, it should be stated that the larger medical groups offered the services in complex, they had an opportunity to accept a greater percentage of the HMO premium. The possibility to use the innovative technologies is higher in the larger medical care groups, however, the research conducted by Landon, Normand, Frank, and McNeil (2005) shows that even though the electronic medical records may be available only for the larger groups, their quality and the ability to be applied remains undeveloped.
As a result, the market power of the larger medical groups has increased. However, Feldstein (2007) points out the problems which existed in financial risk management. The larger medical groups were unable to manage financial risks believing in their priority and as a result, many such managed care collapsed. However, such financial problems cannot reject the fact that the larger medical groups are much more advantageous. The advantage of economies of scale prevails. There is no need to explain that the larger groups have larger expenses of the unit in comparison with the small medical care groups.
Larger medical care groups have domination in the information economies of scale. The professionals who work in the larger groups have an opportunity to share be recognized better than those who provide solo practice or participate in the small medical groups. Therefore, the entrance of new competitors in the medical market is complicated.
Vance and Goodspeed (2002) point to the financial advantage of hospitals. These organizations may be considered as the most successful larger medical groups as they manage to use the priorities of the organizations due to structured and successful managed care practices. Considering the financial priorities and economical changes much depends on the insurance and the number of employees who are to be paid salary. Sponsorship plays a great role in the hospitals’ prosperity and economical advantage.
Therefore, it may be concluded that the changes in health care have to led to the creation of different groups, such as solo physicians, small medical care groups, large medical care groups, and hospitals. Each of these groups has both advantages and disadvantages in the economical relation. Therefore, the priorities and economical advantages are explained by managed care which is possible on the highest level only in hospitals as even in the larger medical groups the use of electronic registers remains undeveloped. The solo physicians appear to be ineffective due to high competition from the side of the large groups who have more opportunities. The main reasons for the economical effectiveness of the larger medical organizations are explained by the lower cost of the units necessary for work and the larger patients’ database which refers to the managed services offered as a package. Turning to the larger medical groups patients have an opportunity to get the piece of advice from the primary care physicians and get the prescription to the specialist who can be reached within the same organization.
Reference List
Feldstein, P. J. (2007) Health policy issues: an economic perspective. New York: Health Administration Press.
Landon, B. E., Normand, S. T., Frank, R., & McNeil, B. J. (2005).Characteristics of medical practices in three developed managed care markets. HSR: Health Services Research, 40(3), 675-695.
Patmas, M. A. (2010). Hospital-Employed Physician Networks: Are Primary Care Physicians Undervalued? PEJ, 12-14.
Vance, R. L., & Goodspeed, R.B. (2002). Back to the future for many hospital-physician relationships: Where do we go from here? Journal of Ambulatory Care Management, 8(32), 59-63.