Consolidation in Healthcare: A Guide for Independent OBGYNs

Author: Alex Barrett

Greater consolidation of independent practices means the healthcare landscape is shifting.This movement, characterized by the merging of individual medical practices with larger healthcare systems, brings a mix of opportunities and challenges for healthcare providers. Independent OBGYN practices have reached a crossroads. 

As the chief executive officer at Meroka, a future-focused healthcare startup, I want to unpack the terms of consolidation and its implications for independent OBGYNs. In this blog post, I will explore current trends, potential benefits, and risks of consolidation while showcasing how Meroka’s innovative solutions offer vital support to independent practitioners navigating this complicated period in healthcare history.

Trends in Consolidation

Given ever-changing regulatory frameworks, new innovations, and rising costs, it seems the healthcare landscape is always shifting. In recent years, consolidation has emerged as one of the strongest factors forcing change.

Today, more than three-fourths of all doctors in the United States are employed by corporations. Often, these corporations are private equity firms. 

Independent OBGYN practices nationwide are not immune. They are experiencing a surge in acquisitions by larger healthcare entities and the formation of expansive medical networks. This trend is fueled by a mix of regulatory changes, technological advancements, and shifts in reimbursement models, along with the rising operational complexity of running an independent practice.

Why Doctors Might Choose to Consolidate

While many doctors rightly have concerns about consolidation, there also are benefits for independent OBGYN practices. 

One major advantage is access to resources and infrastructure that might otherwise be out of reach. By partnering with larger healthcare organizations, OBGYNs can access advanced technologies, comprehensive electronic health record (EHR) systems, and administrative support services, all of which can enhance the quality of patient care and improve practice efficiency.

Consolidation also encourages collaboration and care coordination among healthcare providers, which can lead to better patient outcomes. By integrating with larger medical networks, OBGYNs can connect with a wider range of medical specialties, from pediatricians to pulmonologists who can help them provide more comprehensive and holistic patient care to women, especially new mothers. 

Additionally, joining larger entities can provide financial stability, helping independent practices more effectively manage the paperwork headaches and economic anxiety that come with owning a practice. 

Worth the Risks of OB-GYN Practice Consolidation? 

We understand each of those benefits is appealing. But OB-GYNs should be aware of the risks associated with handing over ownership of their practice, especially for the women they care for. 

First, we have seen evidence that consolidation especially under the umbrella of private equity has led to a rising number of procedures in other specialties like cardiology and ophthalmology. There is a reason that private-equity-backed health firms supported a Florida law that now allows c-sections to be done in outpatient clinics — it is a huge market (and markup) for them. Consolidation also can reduce access to care in the community, and most profoundly for already-disadvantaged populations living in underserved areas. At a time when the women’s health industry is struggling to tackle high rates of Black maternal deaths, this problem is a significant one.

Another major concern is the possible loss of autonomy and clinical independence. In a consolidated healthcare setting, OBGYNs might adhere to standardized protocols and navigate corporate bureaucracy, which could hinder their ability to offer personalized care.

There is also a risk of cultural misalignment between independent practices and larger acquiring entities, leading to difficulties in merging practice philosophies and workflows. Finally, increased competition and market saturation in certain areas can threaten the sustainability of independent OBGYN practices, making strategic planning and adaptation to evolving market dynamics essential.

Meroka: Giving OBGYNs the Power to Keep Care in the Community

In the midst of the healthcare consolidation wave, Meroka stands out as a game-changing partner for independent OBGYN practices. Our innovative employee stock ownership plan (ESOP) model gives practitioners the tools, and revenue, to tackle the sector's challenges with confidence and resilience. 

Meroka opens doors to a wide network of resources and strategic partnerships, empowering independent OBGYNs to stand strong in a rapidly consolidating healthcare market. Whether it is mastering revenue cycle management or crafting effective patient acquisition strategies, Meroka provides the essential tools and support that OBGYN practices need to preserve their independence, keep care in the community, and flourish in today's healthcare environment.