A RISKY TRANSITION
ic model is getting harder for private prac-
tices,” says David Blair, M.D., president and
chief medical o;cer at Grand Rapids, Mich.-
based Advantage Health. ;e multi-specialty
group practice of 200 physicians is owned by
St. Mary’s Health Care, a local hospital, which
is itself owned by Trinity Health, a national
hospital system. “;e private practice is un-
sustainable and has caused physicians to
seek employment. Primary care can get paid
more in the employed model than a private
model. Even specialists are seeing their refer-
rals dry up. In ;ve to 10 years, there will be
little left of private practices.”
Information technology ranks high as a
;nancial pressure driving physicians into
the arms of hospitals. “Physician need ac-
cess to I. T. but they can’t do it on their own,”
says Je; Wasserman, vice president, Culbert
Healthcare Solutions, a Woburn, Mass.-
based consultancy which advises on EHR
selection and clinical integration projects.
“Practices realize they will be paid for per-
formance. ;ey will also be asked to assume
more risk. You can’t do either without state-
of-the-art information systems.”
clear picture of what they’re buying, ;nan-
cially and clinically, often due to limitations
in data analytics. And once the deal is done,
hospitals are facing even more substantial
challenges in getting physicians up on their
EHRs and activating physician billing.
Hospital Owner? Yes!
Kell says. When they buy practices, they do
not always understand what they’re getting—particularly in the complex arena of
cash ;ow. ;at’s because the data needed to
adequately undertake the due diligence is
often buried in the physician practice management system, and often not understood
by the physicians themselves.
She cites the example of a podiatrist who
does foot debridement for Medicare. “His
billing system shows X amount of reim-
bursement, but it can’t distinguish between
procedures done in the o;ce from those
done in a nursing home. ;e payment gap is
big. ;e hospital buying the practice has not
drilled down far enough to know where the
procedures are done, but they’ll use the data
to estimate his income. Later, they ;nd that
most of his procedures were done outside
the o;ce and they don’t generate the rev-
enue they expected. No one in the hospital
knows to ask the question.”
After the deal goes through, hospitals
Ideals and reality
In an ideal world, a group practice acquisition would look something like this: Both the
hospital and physician practice would be on
a common information system, or at least
two systems that could easily share data.
Care could more be seamlessly coordinated
across the inpatient and ambulatory settings,
and the larger and more diverse the group
practice, the easier to keep patients within
the con;nes of the hospital—and outside the
reach of competitors. Cash-strapped physicians would bene;t from having the technological resources o;ered by the hospital.
And economies of scale would ;gure in as
well, with common operations sta; shared
across physician practices, as opposed to
each hiring its own support sta;.
But in the real world, the huge spate of
practice acquisitions isn’t playing out so
nicely. ;e move by hospitals is laden with
risks, not the least of which is I. T. Hospitals
acquiring practices are not always getting a
Rapid growth is the
hallmark of Grand Rapids,
Mich.-based Advantage
Health, which ballooned
from 165 to 200 physicians
in the last two years and
is looking to add 25 more
in 2013, says David Blair,
M.D. president and chief
medical of;cer. Owned
by its parent hospital, St.
Mary’s Health Care, it’s
a large multi-specialty
group, with a strong core
of primary care, he adds.
According to Blair, physicians are eager to join
the practice, which has
obtained recognition as a
patient-centered medical
home from its state Blue
Cross, its biggest payer.
Reasons: Independent
primary care physicians
;nd it dif;cult to obtain
the certi;cation—which
requires a variety of I. T.
tools. Other specialists,
such as cardiologists, have
been hit hard by changes
in CMS reimbursement
policies and cannot
sustain an independent
practice.
Advantage Health is
completing the rollout of
its NextGen system this
year. It works in conjunction with a customized
disease registry platform
the practice has had in
place for years and uses
to keep tabs on lab values
and patients with chronic
conditions. Physicians
must use the EHR, but
Blair says the mandate is
little deterrent to most. “All
doctors are thinking about
the EHR. New residents
expect it. Established physician practices are glad to
have a team of people to
train them on the system.
That was hard to do on
their own.”
Advantage is well situ-
ated for the accountable
care era, Blair says. In
addition to several risk-
sharing arrangements with
its payers, the practice
sets aside $10 million in
performance incentive
payments, paid as quality
metrics are upheld.
“The fee-for-service
system encourages fragmentation,” Blair says. “It
does not support value.
Patients see the ;aws ;rst-hand.” Asked about the
demise of the long-standing private practice model,
Blair says that “the health
care system doesn’t exist
just to give physicians a
chance to be in any environment they want. Health
care will be refocused as a
public good.”
