top of page

How has the Affordable Care Act impacted the private medical practice business?

Updated: May 19

Medical Equipment on the wall in the medical exam room
A photo of healthcare professionals attending a seminar.

The Affordable Care Act (ACA) has brought significant changes to the healthcare landscape, impacting private medical practices in various ways. This blog post explores these changes, the challenges they present, and strategies for small practices to adapt and thrive in 2024.

Shift in Referral Patterns

The ACA has led to a shift in referral patterns as more physicians sell their practices to hospitals. This dynamic forces physicians to refer patients internally, creating challenges for independent practices that rely on these referrals. For example, Dr. Brenda, an orthopedic surgeon, experienced a 30% decline in referrals due to this trend.

Financial Challenges

The ACA has introduced several financial challenges for medical practices, including:

  1. Rising Costs: The Heritage Foundation reports that Obamacare has essentially doubled the cost of individual market insurance relative to what it would have been otherwise, due to its mandates and regulations. These rising costs are a significant concern for physicians under the ACA.

  2. Falling Fees: The ACA has contributed to a decline in professional fees for medical services. Measures such as Medicare payment adjustments, the promotion of cost-saving care models like ACOs and bundled payments, the expansion of Medicaid, increased market competition, and a greater emphasis on preventive care have all played a role. Reports from the Centers for Medicare & Medicaid Services (CMS), the Congressional Budget Office (CBO), and various healthcare policy research organizations have well-documented these changes.

  3. Cash Flow Concerns: The implementation of ICD-10 raised significant concerns about cash flow disruptions due to training and productivity losses, increased claim denials and delays, higher administrative costs, and the acute impact on smaller practices. While the transition aimed to improve healthcare data accuracy and patient care quality, it came with substantial short-term financial and operational challenges for many providers.

  4. New Compliance Issues: The ACA brought about new compliance requirements, such as the mandatory use of electronic medical records (EMRs), increasing administrative burdens and costs for practices.

Patients as Consumers

The ACA has helped patients by improving the accuracy and quality of care, increasing access to healthcare, reducing financial burdens, and enhancing public health data and research. Patients are behaving more like consumers in the era of the ACA, with greater access to medical information, driving more healthcare choices, and being more aware of costs and pricing transparency.

Adapting to the New Landscape

In 2024, physicians continue to adapt to the evolving healthcare landscape shaped by the ACA and other ongoing reforms. Here are some strategies for adaptation:

  1. Embracing Value-Based Care: The ACA has shifted the focus from volume-based to value-based care, encouraging physicians to improve quality and reduce costs. Physicians can participate in Accountable Care Organizations (ACOs), which incentivize them to provide high-quality care while controlling costs.

  2. Adopting Advanced Health IT Systems: Implementing Electronic Health Records (EHRs) and Practice Management Software can enhance efficiency. Small practices should adopt user-friendly, cloud-based EHR systems that facilitate interoperability, maintain accurate patient records, streamline administrative tasks, and improve care coordination.

  3. Joining or Forming Independent Practice Associations (IPAs): By joining or forming IPAs, small practices can negotiate better contracts with insurers, share resources, and collectively invest in technology and training. This collaboration helps in achieving economies of scale and enhances bargaining power.

  4. Participating in Alternative Payment Models (APMs): Small practices can engage in bundled payment programs where they receive a single payment for all services related to a treatment episode. Additionally, participating in Medicare Shared Savings Programs (MSSP) as part of an ACO can offer financial incentives for reducing costs and improving care quality.

  5. Maximizing Financial and Operational Efficiency: Outsourcing billing, coding, and other administrative tasks to specialized firms allows physicians to focus more on patient care while ensuring that administrative processes are handled efficiently.

  6. Engaging in Continuous Education and Training: Staying updated with the latest healthcare policies, technologies, and best practices through Continuing Medical Education (CME) programs and workshops ensures that small practice physicians remain competitive and provide high-quality care.


Adapting to the ACA's landscape in 2024 involves leveraging technology, participating in collaborative networks, engaging in alternative payment models, focusing on preventive care, implementing telehealth, improving care coordination, maximizing operational efficiency, and committing to continuous education. By embracing these strategies, physicians in small private practices can enhance care quality, improve financial sustainability, and better meet the needs of their patients.

Call to Action

For physicians looking to navigate these changes, resources and support are available through professional organizations such as the American Medical Association (AMA), the American Academy of Family Physicians (AAFP), and the Centers for Medicare & Medicaid Services (CMS). Engaging with these organizations can provide valuable insights, tools, and advocacy to help small practices thrive in this new healthcare landscape.remain competitive and provide high-quality care.


bottom of page