Medical groups are a common and evolving structure for healthcare delivery in the United States, representing a significant shift from the traditional solo physician practice. These groups are essentially business organizations formed by multiple healthcare professionals who share resources and coordinate patient care. Understanding the structure and function of these groups is important for patients navigating the modern healthcare system.
Defining the Medical Group
A medical group is a formal collaboration of two or more licensed healthcare professionals, primarily physicians, who work together under a shared entity to provide medical services. These groups are distinguished from a single physician’s private practice by their shared financial and operational responsibilities. The professionals within the group pool their resources, including staff, medical equipment, and facilities, which generally makes overhead expenses lower than those of a solo practice.
This structure allows the collective to distribute income among its members according to a prearranged plan, often tied to a salary or a drawing account. The core characteristic is the coordinated practice of medicine where members share medical records and administrative staff. This model offers physicians a middle ground, providing more autonomy than hospital employment while reducing the personal business risk of running a practice alone.
Common Organizational Models
Medical groups are not monolithic, and their structures vary widely based on the specialties involved and their relationship with larger health systems. The simplest differentiation is between single-specialty and multi-specialty groups. A single-specialty group consists of two or more physicians providing one specific type of care, such as all cardiologists or orthopedic surgeons. Multi-specialty groups offer a variety of medical services under one organization, often including primary care and several subspecialties. This integration aims to streamline patient care across different disciplines.
Beyond these internal arrangements, a group’s relationship with external entities defines other major models. Some groups are part of an Integrated Delivery System (IDS), where the medical group is owned and managed by a hospital or larger health system. An alternative model is the Independent Practice Association (IPA), a separate legal entity formed by independent physicians who maintain their own offices but contract together. The IPA’s primary function is to contract with health plans on behalf of its member physicians for better negotiating power and to share administrative burdens.
Internal Administrative Functions
Medical groups consolidate many of the business functions that would overwhelm a solo practitioner, thereby improving efficiency and allowing physicians to focus on clinical care. One important function is centralized Revenue Cycle Management (RCM), which handles all aspects of billing, coding, and claims processing for the entire group. This centralization ensures a consistent flow of payments from patients and insurers.
The groups also invest in shared technology infrastructure, most notably a unified Electronic Health Record (EHR) system. A shared EHR allows all providers within the group to access a patient’s complete medical history, lab results, and notes, which is fundamental for coordinated care. Furthermore, a central administration manages quality control by developing performance metrics and protocols. This includes negotiating lower prices for medical supplies and equipment across the entire organization due to the group’s greater purchasing volume.
Impact on Patient Experience and Insurance Networks
The structure of a medical group directly affects a patient’s journey through the healthcare system, particularly regarding access and cost. For patients, being treated within a multi-specialty medical group can significantly streamline the referral process. If a primary care physician in the group determines a patient needs a specialist, the referral often remains within the same organization, simplifying scheduling and ensuring continuity of care through the shared EHR system.
Medical groups also play a substantial role in negotiating with insurance companies, such as Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). These groups contract directly with payers to become “in-network” providers, which influences the patient’s out-of-pocket costs. Patients must verify that both the medical group and the specific physician they plan to see are included in their insurance plan’s network to avoid unexpected out-of-network charges.
The administrative consolidation within the group also translates into improved patient-facing technology and communication. Shared patient portals facilitate scheduling, secure messaging with providers, and access to medical records and test results. By centralizing services, many groups offer the convenience of having labs, imaging, and various specialist offices geographically concentrated in one location or campus.