The changing health care marketplace: current industry trends, new provider organizational structures, and effects on plastic surgeons.

Abstract

Current market forces are driving the health care industry in new directions. The managed care industry is currently undergoing a market shakeout, as manifested by consolidation, increased competition, and lower profits. Medicare is fighting to remain solvent by lowering fees paid to providers, driving patients into managed care plans, and cracking down on billing irregularities. For providers, the combined effect of these trends is lower fees, increased risk-sharing, and increased overhead. Plastic surgeons face new demands in this environment. They must increase their efficiency and form new alliances with other providers. These alliances allow plastic surgeons to maintain a steady stream of patients, to manage risk, to negotiate more lucrative contracts with managed care organizations, and to increase efficiency. To achieve these alliances, plastic surgeons must alter the organizational structure of their practices. Several corporate practice models are becoming more prevalent; these include large group practices, physician practice management companies, and integrated delivery systems. Each structure has advantages for plastic surgeons, but each also requires plastic surgeons to trade varying degrees of financial and professional autonomy for market strength.