Advantages & Disadvantages of a Group Practice

Advantages & Disadvantages of a Group Practice
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Group practices are groups of healthcare professionals who own and manage a business together. While entering into a group practice removes much of the physician's autonomy, the choice tends to put professionals in a better financial position than if they started a business by themselves. Group practices carry various other benefits.

Multiple Specialties

When entering into private practice, physicians have the option to work with other physicians instead of working alone. Sometimes, physicians of different specialties work together so that patients can receive care for multiple ailments at a single location. But most group practices have physicians with a single area of specialization. A practice with a diverse array of specialists attracts more patients seeking a one-stop place for their medical concerns.

Learning From Each Other

Group practices have an easier time negotiating with insurance providers than individual physicians. Also, physicians can receive feedback from other physicians when deciding how to negotiate with insurance providers. In a group practice where physicians have similar specializations, the physicians might compete with each other, especially if there's a limited number of patients available.

Spreading Costs

Physicians often use highly expensive equipment to perform diagnostic screenings and perform patient treatment. By working in a group practice, physicians can split the cost of purchasing equipment and then share the equipment. Group practices distribute both the administrative costs and the risks associated with owning and running a practice. Since all of the physicians put some money into the practice, they lose less if the business fails. There's also less administrative overhead per practitioner.

Diverse Perspectives

Physicians can have different kinds of people skills and financial skills. In a group practice, one physician might be better at managing the clinic's money, while another physician might excel at marketing the clinic. In group practices, physicians can share ideas and develop professionally. Those physicians that unknowingly engage in unsound practices can be straightened out by fellow physicians. Young physicians can not only learn from experienced physicians, but also develop a list of clients more rapidly.


Group practices can have conflict when one physician wants to make changes to the business and the other physicians disagree. Physicians can get into conflict over referrals, for example. The physicians must develop conflict resolution skills so that the disagreements do not slow down the business. The larger the group practice, the more that decision-making becomes more driven by policy and bureaucratic rules, possibly slowing down the business.

Lower Compensation

New physicians do not have as much flexibility when determining their compensation within more bureaucratic group practices, since the other physicians will already have rules established regarding how much each professional is compensated. However, group practices also compensate physicians based on productivity and patient numbers.