Physicians as Practice Administrators

Subject: Administration and Regulation
Pages: 5
Words: 1209
Reading time:
5 min
Study level: College

Forms of Medical Group Practice

Nowadays, private physician practices are in decline. The major disadvantages of these practices include high risks associated with practice-management responsibility, financial risks, and problems with autonomy balance (Kash & Tan, 2016). Medical groups, in comparison, offer fewer risks and disadvantages. Some forms of group practice include independent practice associations (IPAs), management service organizations (MSOs), and physician-hospital organizations (PHOs). An IPA is “a business entity organized and owned by a network of independent physician practices to reduce overhead or pursue business ventures such as contracts with employers” (American Academy of Family Physicians [AAFP], 2018, para. 1). Typically, IPAs are comprised of many physicians who can offer an extensive list of high-quality services, increasing the physicians’ capacity for successful market leveraging. MSOs are entities owned by joint groups of hospitals and providers, investors, or health-care practitioners alone, who provide managed-care health plans. This model reduces the operational costs and burdens associated with administrative work (Wagner & Wolper, 2006), allowing physicians to focus on services.

The PHO offers a newly licensed physician the most advantages. This form of practice comprises hospitals that hire groups of health providers and their assets. Compared to an MSO, which is extremely difficult to rebuild once it is established, a PHO can offer high flexibility (Wagner & Wolper, 2006). At the same time, similar to MSOs and IPAs, this form of the medical group provides access to the capital needed for innovation and practice improvement.

Physicians’ Role

The most significant modifications in the U.S. health-care system in recent decades are related to changes in the causes of morbidity and mortality. The rate of severe infectious diseases has drastically decreased, while the incidence of chronic conditions has grown. Moreover, some prevalent diseases are now difficult to define without considering the social and psychological components of health. For this reason, the need for long-term care, patient education, and advocacy have increased, entailing changes in the physician’s role and making it more multidimensional.

Medical practice groups allow increased efficacy of service by addressing multiple issues. However, physicians in large groups may continue to face such challenges as excess workload. According to Casalino et al. (2016), this may happen if an organization implements an inefficient work structure that does not help resolve difficulties in primary care practice. Second, physicians can face the risk of conflict of interest between financial profit and optimal care for patients (AAFP, 2018). This factor presents the challenge to practice social accountability. Third, “significant alienation between primary care physicians and contracted limited specialists” is possible (AAFP, 2018, para. 2). The ability to mitigate this challenge largely depends on the form of medical group practice and overall organizational culture.

Competencies and Hurdles in the Practice of Group Leaders

Desirable competencies of physicians as practice managers are related to the broader domain of health care. Three main competencies include strategic planning, communication, and team building. The first implies a profound understanding of the industry and its nuances, ability to identify a wide range of issues, and capability to come to effective solutions (Dubinsky, Feerasta, & Lash, 2015). Team building and conflict management skills help create a positive and collaborative workplace climate (Dubinsky et al., 2015). Without this competency, productivity and job satisfaction in the group can decline significantly. Lastly, effective communication defines the ability to engage both internal and external stakeholders. Thus, the given skill facilitates network development and coordination of professionals within the team.

When a medical practice group grows and becomes more diverse, governing the organization becomes more challenging. Therefore, a leader in such a group should establish a centralized form of management (Wagner & Wolper, 2006). However, in this case, meeting the interests of all team members may present additional difficulties. According to Wagner and Wolper (2006), this problem may be managed through a setting in place adequate structuring, implementing a payment system, and establishing a group culture that has a specific mission and values. The second challenge involves promoting clinical accountability and improving patient care quality. In part, this issue is related to the development of the organizational mission. Nevertheless, a greater number of activities must be considered to “organize a health care delivery system which produces optimal health outcomes for patients” (AAFP, 2018, para. 2). These include the efficient management of funds and finances. Third, strategic planning represents a special challenge as it requires the choice of appropriate management mechanisms in general. To tackle this issue well, understanding organizational goals and major issues in the sphere of health care are essential.

Human Resource Management

Human resource management (HRM) plays an essential role in medical practice. Not only does this function influence perceptions of the organizational climate and facilitate improved employee engagement, but it also assists in retaining talent. Three main functions of HRM that can help attract and retain highly competent employees are recruitment, training, and maintaining favorable work conditions. The recruitment process starts with identifying competency gaps and developing staff requirements. O’Meara and Petzall (2013) observed that this procedure can lead to success only when managers understand what kind of employee they need as well as the problems demanding resolution. Therefore, an analysis of the current situation and job requirements should be carried out. This process can allow medical groups to clearly define tasks and functions to foster positive outcomes in service improvement endeavors.

Second, an efficient reinforcement system can promote desirable behaviors among practitioners. To make this approach work, HR managers should consider organizational goals and patterns of feedback, finding ways to correlate them in practice. Managers must also emphasize individual responsibility and orient employees to achieve positive results through the initiation of a reward and recognition system aimed at demonstrating to employees that their efforts are valued (Albrecht, Bakker, Gruman, Macey, & Saks, 2015). Such an HR function allows both motivating and retaining talent. Lastly, training is important for developing new skills and competencies in practitioners. This approach reduces the need to recruit new staff members from the outside and provides more opportunities for professional growth and self-development to the physicians that the organization has already hired.

Marketing Strategy and Consumer Behavior

The primary aspects of consumer behavior that should be considered during the development of marketing strategies include the decision-making process, buying situations, and external influences. The first refers to the assessment of purchasing needs and the benefits associated with a purchase, which may be both tangible and intangible, such as an improved health condition and the inducement of positive emotions (Hoyer, Macinnis, & Pieters, 2016). This means that if a medical procedure does not produce significant tangible benefits and is associated with negative emotions, people will likely tend to avoid such treatment.

The term buying situations implies the patient’s current circumstances, including financial situation, level of awareness, and more (Hoyer et al., 2016). This suggests that while marketing a service, administrators need to provide information and offer reasonable prices for consumers to increase the chance of purchase. Lastly, cultural and social factors can affect the consumer. For example, when the public has a negative perception of a particular medical practice, individuals will likely reject the practice. This factor can be considered while conducting quality improvement initiatives, which may allow an increase in the organization’s capacity for creating value and lead to greater consumption rates.


Albrecht, S. L., Bakker, A. B., Gruman, J. A., Macey, W. H., & Saks, A. M. (2015). Employee engagement, human resource management practices and competitive advantage. Journal of Organizational Effectiveness: People and Performance, 2(1), 7-35.

American Academy of Family Physicians. (2018). Web.

Casalino, L. P., Chen, M. A., Staub, C. T., Press, M. J., Mendelsohn, J. L., Lynch, J. T., & Miranda, Y. (2016). Large independent primary care medical groups. Annals of Family Medicine, 14(1), 16–25.

Dubinsky, I., Feerasta, N., & Lash, R. (2015). Model for physician leadership development and succession planning. Healthcare Quarterly, 18(1), 38-42.

Hoyer, W., Macinnis, D. J., & Pieters, R. (2016). Consumer behavior (7th ed.). Boston, MA: Cengage Learning.

Kash, B., & Tan, D. (2016). Physician group practice trends: A comprehensive review. Journal of Hospital & Medical Management, 2(1), 1-8.

O’Meara, B., & Petzall, S. (2013). Handbook of strategic recruitment and selection: A systems approach. Bingley, UK: Emerald Group Publishing Limited.

Wagner, S., & Wolper, F. (2006). Governance and organizational dynamics. Englewood, CO: Medical Group Management Association.