Ear, Nose And Throat, P. A.: A Case Study

North Carolina Eye, Ear, Nose & Throat, P.A. (NCEENT) is a private physician-owned medical practice based in Durham, North Carolina. NCEENT is in the process of evaluating a possible merger or affiliation with a larger health system. NCEENT’s primary goal in merging with a larger health system is to increase patient volume through patient referrals from that system. However, the practice will likely benefit from increased revenue per patient visit due to better insurance contracts within the hospital system. Also, being part of a larger system will make it easier to participate in value-based payment models, since the system can provide the full continuum of care for patients and the sheer size and negotiating power of these systems, ensures they have a seat at the table with insurers to build these models out. Finally, other benefits are the creation of economies of scale, clinical integration, and connectivity.
One of the reasons the physician owners of NCEENT joined a private practice in the first place, is the level of autonomy created by this type of structure. The physicians are involved in the decision-making process of the
Furthermore, a recognition that organizational needs vary widely from one company to another and from one market to another has created some non-traditional affiliation strategies that could be beneficial for NCEENT (Healthcare Financial Management Association, 2014). Also, affiliation strategies are becoming more popular as alternatives to a full merger, especially in circumstances where a particular physician practice is not constrained financially or strategically (Spees,