This note is not about the push to use lab and imaging more appropriately. It is about a decision facing many physicians in the U.S, that will have profound effects on the remainder of their career. The decision comes down to answering one of two questions:
“Who do I partner with?”, or
“Who should I partner with next?”
I don’t use the term “partner” in the legal sense, although a Joint Venture, or other arrangement that is legally a partnership, might offer a possibility of addressing the question at hand. The real issue is finding something bigger than a small practice, and certainly bigger than a solo physician, meaning a group, an employer, etcetera - to move into the future with.
Dealing with the second question first will assist in understanding the possibilities of the first. For some physicians, the situation has already progressed to finding the next partner as they move away from their first failed attempt at “partnering”. The scenario is most commonly something like this: the local hospital went on a hiring spree a few years ago, acquired lots of physicians’ practices; paid large purchases prices to those physicians that owned physical assets and very generous 2 to 3 year salaried contracts. And now the contracts are ending. In the next round of contracting physicians are faced with drastically reduced guaranteed salaries (if any guarantee at all), productivity-based compensation (RVUs are most common, but raw patient numbers, or even dollars generated are being proposed also), quality metrics (if bonuses are to be possible), and expectations of participating in “performance improvement councils”.
Faced with these changes, it is not difficult to understand why many physicians feel victims to a “bait and switch” con game. On top of the pure financial hit they will suffer if “productivity” targets are not made (almost always requiring an increase in patients per day), many see the “councils” as the very management “stuff” they thought they had left behind when they became employees. And many considering leaving the employment arrangement discover that the non-compete clause in their contract could be serious obstacle to switching to any new arrangement locally.
The physicians that are struggling with, “Who should I partner with next?”, are not just those previously in private practice, but include many academic physicians faced with practice plan changes that are very similar to their community colleagues’ experiences (for a recent example, See: Charleston Post and Courier). It seems that most medical school practice plans share with the large hospital system the reality of declining revenues associated with any movement toward Pay-4-Value (fewer services in the traditional source of “brick-and-mortar” based services), annual deficits of $80,000 to $180,000 per physician (they were over-paid to effect the acquisition), and in many cases lagging quality metrics. Status quo is not an option for the hospital system nor the academic center, especially as they realize that these financial relationships could be legally challenged. .
And as we return to the private practice physicians looking at their options for the first time, don’t ignore that they are talking to their colleagues that are dissatisfied with their current employment arrangement. These doctors also are being confronted with the reality that they simply can no longer do it alone, with the penalties on the horizon mandated by the Medicare Access and CHIP Reauthorization Act of 2015 unlikely to be reversed (a 5% reduction in Medicare payments for not participating in any Alternative Payment Model, and MACRA was overwhelmingly passed with by-partisan support in congress). Quality achievement and reporting in a small practice is very difficult and expensive, taking time and money away from what otherwise would be a benefit of private practice. And commercial payer contracting is increasingly complex without membership in an ACO. But if some independence is to be maintained, a multi-group model ACO might be a viable alternative. But two (or more) groups will need a Clinically Integrated Network (CIN) to get information in and out of the ACO. And that means probably switching EMR (Electronic Medical Record) or paying higher interface-costs to the CIN.
Faced with an unfamiliar situation, and the need to decide, the terror being experienced by many physicians is not altogether different than Indiana Jones in the final scenes of “The Last Crusade”. Your private practice or your employment situation is dying (like Indiana’s father). There has to be a cure (partnering with some larger entity, like water from the Grail). And the only readily available counsel is, “Choose Wisely”. Some will throw up their hands, live out life in bitter resentment, or drink from the wrong cup and die – figuratively of course.
Some will take a path more like Indiana Jones – think it through, learn from others’ mistakes, look at the options available in the local market, and where necessary engage in the construction of new options. Any choice will involve a transition to something new and different. I offer the following as guidance appropriate to most environments – every market has a unique set of questions but these will provide a starting place.
1. How much time do you have to secure a new option? What is your current situation? Is your practice experiencing a new terminal diagnosis, or is it already in hospice?
2. How much time is left in your career? 1-3 years may have a different answer than 10-30 years.
3. Are you willing to relocate? Staying where you are (same metro area) could involve two moves in the coming 1-2 years to comply with a non-compete clause, or paying a hefty price.
4. What is most important to you in your happiness as a physician? Money? Clinical-decision-making independence? Other? Your answer may generate 5 more questions.
5. What are you willing to give up? See #4 above
6. Be sure to get a lawyer to review existing or offered contracts and pay them to explain it to you until you fully understand. THIS IS NOT AN OPTIONAL STEP!
7. You will need an understanding of the local marketplace:
a. How many options for employment, or for affiliation without employment, are there? For you, in your specialty?
b. How many other physicians are similarly positioned / making a change currently? Could you come together - in theory - to respond as a group (again, needs legal counsel)?
8. Are there Management Service Organizations (MSOs) locally that can help you transition? Are there local reviews for their services? Do you have the financial strength to pay for, or borrow to pay for, their transition services?
9. Is there someone you trust as advisor to help in considering all options, or inside one of the options available to guide you through the process?
10. What are you willing to do in the management arena to contribute to a new a new option for you and others? Participate in construction? Help pay for someone else to do it? Both?
I speak with many physicians and systems undergoing the turmoil described here. I hope this helps, and at least provides a starting place.
Choose Wisely !