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Staving Off Threats to Practice Independence


Everywhere you look consolidations, mergers, and acquisitions dot the healthcare landscape. So it's not surprising that the results of a recent survey found that 44% of independent specialists anticipate selling their practices within the next 10 years.

Doctor with Nurse and patient

Everywhere you look consolidations, mergers, and acquisitions dot the healthcare landscape. It’s evident at all levels. Insurance companies are merging. Medical groups are being acquired by hospitals. And hospitals are merging into larger systems; they’re even becoming payers with the creation of their own HMOs.

So it’s not surprising that the results of a recent survey conducted by ProCare Systems found that 44% of independent specialists anticipate selling their practices within the next 10 years.

But they don’t want to sell.

“We know about the primary care world consolidating,” acknowledges Fred Davis, MD, president and co-founder of ProCare. “But in the procedural-based world, the specialty world, there has been a maintaining of the entrepreneurial spirit. Doctors are looking for options.”

Grass Isn’t Greener

Davis says that many physicians who have been absorbed by mergers and now function as part of a hospital staff are looking for opportunities outside of that environment. They’re unhappy with their employed circumstance, having found that situations aren’t always as they appear to be, or were meant to be.

“What happens is [hospitals] will always be generous when they first offer an employment contract,” Davis says. “But after two years, the next time the contract comes up, it’s never for more, and it’s always wanting to pay you less and have you do more.”

Davis explains that ProCare Systems, which recruits and manages a network of pain practices throughout the State of Michigan, is actually finding it easier to recruit in the current environment than it was 10 years ago.

“We’re getting more people who were in the employed arena wanting to come out of the employed arena and go back into an entrepreneurial practice,” he says. “But, they want to have the benefit of being part of something bigger.”

What resonates with physicians, Davis explains, is joining a private practice that is part of a larger network. That affords them the benefits of size in terms of economies of scale, as well as a level of information technology enabling them to comply with today’s regulatory environment, yet maintain a semblance of independence.

Respect over Revenue

Davis believes that physicians are more nomadic today than ever before; a constant movement in and out of different practice environments. The reason, he says, is that they have perceived themselves increasingly as a commodity. Their input isn’t valued. Their service isn’t valued. And they don’t have a voice in their destiny.

“Even in the area of marketing and building your practice, it used to be that a doctor would spend a lot of money building his practice and getting to know all the other doctors in town, working to establish himself in the community,” Davis says. “But now in an employed situation the hospital does the marketing. The doctors are more anonymous in their practice, and physician loyalty, the patient’s loyalty to their physicians, is not what it was before.”

What’s missing, he says, is control. Control in what physicians do in their practice. Control in how they spend their day. In an employed environment, physicians are told they have to see 20 patients in the morning and 20 patients in the afternoon. That doesn’t resonate well, especially with specialists.

“It’s control of their practice,” Davis says. “And I think that may mean more than the actual dollars they’re being paid.”

Be Proactive

Davis says it’s critical that physicians look closely at their potential role within the organization they’re contemplating joining. Are physicians in that organization a commodity, or are they crucial? Are they part of upper management? What input do they have into the governance of the organization as a whole?

“And speak with doctors, preferably in your specialty, who have been part of that organization for some period of time.”

The ProCare survey found that the most important factors in remaining solvent today are specialty of care, steady referrals, and efficient/sustainable cost structures. And the good news is that there are tools that can help physicians remain independent by maximizing these elements.

For example, ProCare’s PRISM Care Management System is a digital toolbox that gathers clinical data from patients and uses it to assess disease risk, inform clinical decision-making, and track outcomes through the course of treatment. Davis says that a large integrated system in Michigan in the fourth year of a pilot project using the care management system has experienced significant results.

Those results show patient satisfaction at 87% to 90%; improvement in quality of life measures at 40% to 60%; and for commercial patients, save the insurance company $5,000 per member per year in global healthcare costs.

“That gives the practice something to start negotiating for; to have a gain sharing payment based on how much is saved,” Davis says. “By demonstrating the effectiveness of your work, you can sit at the table and collaborate with the payer as opposed to being a supplicant to the payer.”

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