Becker's Spine Review, "The survival of private practice: How 128 orthopedists merged to combat hospital employment"

Published February 11, 2014

The Survival of Private Practice: How 128 Orthopedists Merged to Combat Hospital Employment

By: Laura Miller

In early 2014, 128 orthopedic physicians in the Washington, D.C., area officially united to form The Centers for Advanced Orthopaedics and became one of the largest orthopedic specialty groups in the country.

"Historically, there have been attempts to form large groups when managed care started, but physicians were skeptical of each other and a lot of times the larger groups didn't work out," says Louis Levitt, partner and Orthopaedic Medicine & Surgery and secretary/treasurer of The Centers. "But I've been in practice for 30 years and haven't before seen as much change as we've had in the past two years. Now physicians are saying they don't have an alternative but to form the larger groups. We have been meeting for two years on a monthly basis and every time we leave a meeting I am more shocked at how strongly the groups are committed at this point. "

The Centers includes 32 zip codes through Virginia, Maryland, West Virginia, Pennsylvania and Washington, D.C.The physicians decided to unite as one group to maintain independence and provide patient-centered care without becoming a hospital employee.

"My group had a relationship with another group in Maryland and we decided to start coming together for many different reasons to preserve the private practice of medicine," said Nicholas Grosso, MD, of Orthopaedic Associates of Central Maryland and president of The Centers. "We talked with a few other groups in the area and found they were thinking in the same way. Private practice orthopedic surgeons are feeling the pressure of hospitals coming to purchase groups—the percentage of physicians in private practice is dropping—but we don't want to work for the health systems. We wanted to preserve the private practice model of medicine and that's the impetus for doing this."

According to the American Academy of Orthopaedic Surgeons member census, around 44 percent of orthopedic surgeon members are in private practice and only 18 percent identify as solo practitioners. Nine percent are in private practice multispecialty groups and 9 percent reporting being employed by a hospital or medical center, but hospitals have been acquiring specialists at an alarming rate over the past few years.

"Changes in the healthcare environment made it such that the cost of operating a practice was so large and reimbursements were shrinking so small that some groups could not maintain the small group private practice method," says Denny Tritinger, executive director of The Centers. "What we really have developed is a way to preserve the private practice while taking advantage of larger corporate entities."

As a larger group, the physician partners of The Centers for Advanced Orthopaedics can use their size for negotiating leverage in managed care contracts, supply costs, malpractice insurance and other services. The specialists also work together now to standardize clinical pathways and cross-refer patients to improve the overall quality of care.

"The collaboration we are seeing in this group is amazing," says Mr. Tritinger. "I've been in physician practice management for 30 years, and the way we are coming together is very collegial from both a business and clinical perspective."

Why stay in private practice
With consolidation rampant in the healthcare industry, some physicians—especially young physicians coming out of training—are wondering why they should consider private practice. There are several clinical and business advantages to running a private practice, and studies show physicians are more motivated when they aren't under hospital contracts.

"An MGMA study shows us that when physicians become employed, they are less efficient," says Dr. Grosso. "When we stay in private practices, we are the most efficient and we have data to show that."

For example, if a patient calls at 4:30 p.m. and says they're en route to an appointment, the independent physician can say they'll wait for the patient to arrive and have motivation to stay "on the clock" and accommodate that patient. This private practice mentality funnels through the larger conglomeration of The Centers as a whole.

"We get to provide the uniqueness of keeping our old patients and providing a high level of professional care in the private setting with the benefit of a powerful organization," says Dr. Levitt. "I can say to my private practice patients that now they not only get a high level of service at my practice but will have access to the region's largest orthopedic network. That was something I couldn't say before."

Large practice organizations are sprouting up among different specialists across the country and many are developing unique models for care.

"With the shift toward institutionalized medicine and more physicians being purchased by the hospital systems, we decided someone has to preserve medicine as it used to be and let physicians take control back," says Dr. Levitt. "It is gaining such traction and momentum. I think the new landscape is really starting to shape up. We are going to divide the world between institutional medicine and large practice groups; it will be how private practice learns to survive."

Developing the large group model
The physicians began talks about forming a larger entity more than a year ago and spent several meetings discussing their objectives as individual surgeons and groups, as well as their vision for the larger group model. It took more than a year for the key players to develop an operating agreement everyone supported and acquire a legal team that solidified the union.

"We worked with all the groups and created a board of managers that included one member of each group," says Dr. Grosso. "The board would meet regularly. After we signed the operating agreement, the next step forward was to start working as a large group. The first 16 months was spent developing the framework from the business perspective. There have been smaller-scale groups with a similar practice model in other states, but our group was very large and complex."

Even though the individual physicians are now part of a larger group, they are able to maintain autonomy at the practice level and see the same patients they did in the past.

"It was really important for us to maintain the patient experience," says Dr. Grosso. "One of the key messages we've been telling our patients is that even though we are members of The Centers, they can still see the same physicians and staff members they're familiar with. The only thing that will change from the patient's perspective is the logo on the wall."

In the future, Dr. Grosso is looking forward to strategic planning sessions that will map out the different possibilities for the group to grow from a quality and business standpoint. But the group doesn't currently have plans to expand any time soon.

"Our goals are to maintain the private practice model of medicine and deliver the highest quality care we can in an efficient practice model," says Dr. Grosso. "We could be open to growth in the future and growing internally by adding surgeons who come out of training. There aren't any plans for adding other groups; what we want to do right now is maximize our efforts."

While the possibilities are endless, there are also a few challenges for The Centers in the near future. Chiefly, several of the practices are on different electronic medical record systems and at their upcoming board meeting the physicians will discuss how to integrate all systems and consolidate billing systems.

Growing closer as clinicians
For years, many of the orthopedists in the area practiced separately without many opportunities to connect with their colleagues or incentives to learn more from each other. Now, as a larger group, the orthopedic specialists feel more free to send patients back and forth and discuss unique cases with one another.

"We have had instances in the past month or so where one of the physicians didn't feel comfortable treating a patient in his practice so he could send them to one of the other practices in the group with more expertise in a particular area," says Mr. Tritinger. "We are going to develop a tool whereby our physicians can list certain areas of interest they have that are niche specialties so everyone knows who has developed skills within each niche. Then they'll have 130 other physicians referring to them."

For example, there are 23 hand surgeons in The Centers and those specialists are able to collaborate and form subgroups to really focus on specific conditions and procedures. "That can really help people continue to develop instead of being the sole hand surgeon in their practice taking care of every hand case," says Dr. Grosso. "That's huge."

Patients also have access to the therapy services at all practices in The Centers, so if they live closer to one group than another, they can use the closer facilities for physical therapy, imaging and rehabilitation.

Reaction from payers
As independent physicians, many members of The Centers didn't have a strong negotiating position with payers. However, as a larger group the insurance companies are taking notice and consider The Centers an important entity to negotiate with for orthopedic care.

"It's obvious to us that payers view us as an important entity they want to deal with by how they've reacted to us," says Mr. Tritinger. "But we want to go deeper than that. We want to have a voice in the future of musculoskeletal medicine. Our clinical team is working with payers and we want to have a voice in the process for determining the best clinical protocols for patient treatment."

As a large group, The Centers has more leverage to set their standards for clinical care pathways and work with insurance companies on coverage. "We'll provide the clinical perspective they might not have and gather that data for orthopedic care," says Dr. Levitt. "We can set the standards and make sure everyone within our group provides the same level of care. Back pain will be treated the same way wherever patients go—we'll order the same tests at the same time. We want to collaborate with insurers to focus on how we can deliver the best personalized care in an efficient manner."

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