Articles:
Hospitals acquiring doctors' practices in Austin and beyond
Ophthalmologist Michelle Berger examines Arthur McDonald during a general wellness check up last
month. Berger remains independent as other doctors begin merging practices with
hospitals. ‘The barriers to becoming an independent practice are really high
now,’ she says
Hospitals across the country are buying or affiliating with physician
practices, a trend that has picked up steam in Austinin the past 12 to 18
months.
Hospital officials and affiliated doctors say the consolidations are a
way to share savings and be more cost-efficient, while giving patients better
coordinated care. But patients might also pay more for some services, and the
independent practitioner, who tends to provide less expensive care, is
struggling to stay that way.
“The barriers to becoming an independent practice are really high
now,” said Dr. Michelle Berger, an Austin ophthalmologist and president of the
Travis County Medical Society. “I’ve been in solo practice since 1985, and I’ve
gotten very lean and mean. I used to have four employees; now I have
one.”
This fundamental shift in health care delivery — said to be moving
more slowly in Texasthan in some regions, such
as the upper Midwest— is especially attractive
to new doctors. They won’t face startup costs because the hospital takes care of
administrative tasks — including billing, hiring staff and negotiating insurance
contracts — allowing doctors to focus on their patients. Hospitals boost their
referral networks and gain negotiating clout with insurers, which some say could
drive up costs for employers and their covered
workers.
Some doctors, however, are resisting the trend, saying they are
concerned about losing autonomy and about serving two masters: cost-conscious
hospitals and their patients. Dr. Leila Williams, chief medical officer for the
public CommUnityCare clinics, said her former practice was acquired by
CedarPark
RegionalMedical Centerand, while she liked her colleagues,
it wasn’t the right fit.
“It was a very collegial work environment, but the difference is, you
don’t have a say in who you hire or how you run your practice,” she said. “I am
used to being independent and autonomous.”
Charles Bailey, senior vice president and general counsel with the
Texas Hospital Association, said he expects the trend to continue as health care
inches away from fee-for-service to payments based on quality. He hasn’t heard
complaints of higher prices from patients, but he said that is “a very
legitimate issue.”
“The concern always is, when the financial incentives change, will
there be pressure to do or not do certain services?” Bailey
added.
Patients in other states have complained about paying more for
imaging, heart tests and routine visits, according to published reports.
Medicare reduced payments to cardiologists for heart tests several years ago,
while raising reimbursements to hospitals, prompting cardiologists to be among
the first to join hospitals.
A report in March 2012 by the Medicare Advisory Commission said that
billing doctors’ office visits as outpatient hospital visits would increase
Medicare spending by $2 billion a year in 2020, substantially increasing the
patient’s share as well.
Officials with the Austin area’s two largest hospital systems, the
Seton Healthcare Family and St. David’s HealthCare, said they don’t see costs
going up for most patients. Nor do they plan to bill higher hospital facility
fees for certain physician services, they said.
Patients often unaware
Seton is affiliating with doctors to fill gaps in services, not boost
revenues, said Greg Hartman, president and CEO of two Seton hospitals. “Most of
them are not moneymakers,” he said of the affiliated
practices.
Seton employs 322 physicians and 216 residents through nonprofit
affiliations, spokeswoman Adrienne Lallo said. They include “physicians who
could not afford to establish practices here on their own,” she said. “If
somebody has to go out of town because we don’t have enough or the right kind of
(doctor), that’s an important thing for us to
provide.”
St. David’s has acquired 102 physician practices for similar reasons,
said John Rebok, division vice president of physician services. “What we bring
to the table is a focus on quality reporting and patient satisfaction,” he
said.
St. David’s is looking into other kinds of affiliations to improve
health care delivery, such as “entering into cooperative agreements with
doctors, rather than buying practices,” Rebok said.“One (way) would allow
physicians to remain in private practice and participate on a common set of
quality initiatives.”
The fees hospital doctors are paid depend on insurance contracts,
Lallo and Rebok said. “For the majority of services offered in our employed
practices, there has been no change,” Lallo said.
Unless they ask or are told, patients might not know their doctors’
practice is hospital-owned.
An affiliated practice “can be good for patients, if it’s done right,”
said Dr. Joe Annis, an Austin anesthesiologist and board member of St.
David’s HealthCare and the American Medical Association, the nation’s largest
physicians’ organization. “The priority and focus should be on what is best for
the patient. … If costs are precedent, then you have to start
worrying.”
Annis said he is hopeful and believes the doctor-patient relationship
can be preserved, regardless of affiliation.
Same pay, fewer headaches
In the 1990s, hospitals bought physician practices when HMOs were on
the rise. The trend didn’t last. This time, multiple factors are at work,
including uncertainty surrounding the federal health care law; payment changes
that favor hospitals; rising costs, including new requirements for electronic
records; economies of scale that benefit bigger organizations; and physicians
seeking a better balance between work and home life.
Some doctors are joining larger doctor groups or teaming up with major
insurers, in addition to affiliating with hospitals for similar
pay.
“This generation of physicians coming out of training has very, very
high levels of debt,” said Dr. Norman Chenven, CEO and founder of Austin
Regional Clinic, one of the largest physician practice groups in the Austinarea. “They are not
in a position to go to the bank and borrow another quarter of a million dollars
to start a new practice. Also, a lot of new doctors are less entrepreneurial —
and less willing to not have a life.”
Dr. Ed Chafizadeh, an Austin cardiologist in a group of about 40
affiliated with St. David’s HealthCare, said cuts in Medicare payments were a
factor. His compensation is now similar to what it had
been.
He’s happy and believes patients are well-served by combined efforts
to communicate better about their care, he said.
“It was a positive thing for us to get out of the business of HR
(human resources), health insurance, IT (information technology) and billing,”
he said. “A lot of people say, ‘I can’t believe you’ve gone to work for a
hospital,’ … (but) St. David’s has been very
hands-off.”
Dr. Koushik Shaw, a urologist, joined Austin Diagnostic Clinic, a
large physician group, after his residency in 2004. He appreciated the access to
other doctors for referrals, electronic medical records and other administrative
help. But he craved independence and struck out with a partner in
2010.
“What happens when you are in large group is you have to put the needs
of the group ahead of yourself,” Shaw said.“The harder you work, you can
increase your income somewhat, but you will have… a master looking over your
practice.”
Shaw said he took out a loan and had no income for the first six
months. Now, he and his partner have about a dozen employees and have treated
about 6,000 patients, he said. Shaw added that he works harder and spends 10 to
25 percent of his time running the business.
“We are continuing to grow despite the fear mongering” about the
future, Shaw said. “My satisfaction in the way I practice is incredible. (But)
the way I practice is going to be a relic.”
The consulting firm Accenture said last year that the percentage of
independent doctors fell from 57 percent in 2000 to 39 percent in 2012. Donna
Kinney, director of research and data analysis at the Texas Medical Association,
questioned that data, which she said exaggerates the trend. She cited a TMA
survey last year that said just 4 percent of Texasphysicians and residents are hospital
employed.
The Southwest has indeed moved more slowly, Chenven said. Texashas an independent
streak, he said, as well as state laws that make it harder to sue for
malpractice and that forbid hospitals from employing physicians. Texas hospitals, however,
are permitted to affiliate with doctors and generally do so through nonprofit
corporations.
Berger, the solo practitioner, said no one yet knows how the trend
will end up. “If it doesn’t work out, how do we unwind this?” she asked. “I’m
just afraid we are burning bridges and making changes we won’t be able to go
back on.”
Ophthalmologist Michelle Berger examines Arthur McDonald during a general wellness check up last
month. Berger remains independent as other doctors begin merging practices with
hospitals. ‘The barriers to becoming an independent practice are really high
now,’ she says
Hospitals across the country are buying or affiliating with physician
practices, a trend that has picked up steam in Austinin the past 12 to 18
months.
Hospital officials and affiliated doctors say the consolidations are a
way to share savings and be more cost-efficient, while giving patients better
coordinated care. But patients might also pay more for some services, and the
independent practitioner, who tends to provide less expensive care, is
struggling to stay that way.
“The barriers to becoming an independent practice are really high
now,” said Dr. Michelle Berger, an Austin ophthalmologist and president of the
Travis County Medical Society. “I’ve been in solo practice since 1985, and I’ve
gotten very lean and mean. I used to have four employees; now I have
one.”
This fundamental shift in health care delivery — said to be moving
more slowly in Texasthan in some regions, such
as the upper Midwest— is especially attractive
to new doctors. They won’t face startup costs because the hospital takes care of
administrative tasks — including billing, hiring staff and negotiating insurance
contracts — allowing doctors to focus on their patients. Hospitals boost their
referral networks and gain negotiating clout with insurers, which some say could
drive up costs for employers and their covered
workers.
Some doctors, however, are resisting the trend, saying they are
concerned about losing autonomy and about serving two masters: cost-conscious
hospitals and their patients. Dr. Leila Williams, chief medical officer for the
public CommUnityCare clinics, said her former practice was acquired by
CedarPark
RegionalMedical Centerand, while she liked her colleagues,
it wasn’t the right fit.
“It was a very collegial work environment, but the difference is, you
don’t have a say in who you hire or how you run your practice,” she said. “I am
used to being independent and autonomous.”
Charles Bailey, senior vice president and general counsel with the
Texas Hospital Association, said he expects the trend to continue as health care
inches away from fee-for-service to payments based on quality. He hasn’t heard
complaints of higher prices from patients, but he said that is “a very
legitimate issue.”
“The concern always is, when the financial incentives change, will
there be pressure to do or not do certain services?” Bailey
added.
Patients in other states have complained about paying more for
imaging, heart tests and routine visits, according to published reports.
Medicare reduced payments to cardiologists for heart tests several years ago,
while raising reimbursements to hospitals, prompting cardiologists to be among
the first to join hospitals.
A report in March 2012 by the Medicare Advisory Commission said that
billing doctors’ office visits as outpatient hospital visits would increase
Medicare spending by $2 billion a year in 2020, substantially increasing the
patient’s share as well.
Officials with the Austin area’s two largest hospital systems, the
Seton Healthcare Family and St. David’s HealthCare, said they don’t see costs
going up for most patients. Nor do they plan to bill higher hospital facility
fees for certain physician services, they said.
Patients often unaware
Seton is affiliating with doctors to fill gaps in services, not boost
revenues, said Greg Hartman, president and CEO of two Seton hospitals. “Most of
them are not moneymakers,” he said of the affiliated
practices.
Seton employs 322 physicians and 216 residents through nonprofit
affiliations, spokeswoman Adrienne Lallo said. They include “physicians who
could not afford to establish practices here on their own,” she said. “If
somebody has to go out of town because we don’t have enough or the right kind of
(doctor), that’s an important thing for us to
provide.”
St. David’s has acquired 102 physician practices for similar reasons,
said John Rebok, division vice president of physician services. “What we bring
to the table is a focus on quality reporting and patient satisfaction,” he
said.
St. David’s is looking into other kinds of affiliations to improve
health care delivery, such as “entering into cooperative agreements with
doctors, rather than buying practices,” Rebok said.“One (way) would allow
physicians to remain in private practice and participate on a common set of
quality initiatives.”
The fees hospital doctors are paid depend on insurance contracts,
Lallo and Rebok said. “For the majority of services offered in our employed
practices, there has been no change,” Lallo said.
Unless they ask or are told, patients might not know their doctors’
practice is hospital-owned.
An affiliated practice “can be good for patients, if it’s done right,”
said Dr. Joe Annis, an Austin anesthesiologist and board member of St.
David’s HealthCare and the American Medical Association, the nation’s largest
physicians’ organization. “The priority and focus should be on what is best for
the patient. … If costs are precedent, then you have to start
worrying.”
Annis said he is hopeful and believes the doctor-patient relationship
can be preserved, regardless of affiliation.
Same pay, fewer headaches
In the 1990s, hospitals bought physician practices when HMOs were on
the rise. The trend didn’t last. This time, multiple factors are at work,
including uncertainty surrounding the federal health care law; payment changes
that favor hospitals; rising costs, including new requirements for electronic
records; economies of scale that benefit bigger organizations; and physicians
seeking a better balance between work and home life.
Some doctors are joining larger doctor groups or teaming up with major
insurers, in addition to affiliating with hospitals for similar
pay.
“This generation of physicians coming out of training has very, very
high levels of debt,” said Dr. Norman Chenven, CEO and founder of Austin
Regional Clinic, one of the largest physician practice groups in the Austinarea. “They are not
in a position to go to the bank and borrow another quarter of a million dollars
to start a new practice. Also, a lot of new doctors are less entrepreneurial —
and less willing to not have a life.”
Dr. Ed Chafizadeh, an Austin cardiologist in a group of about 40
affiliated with St. David’s HealthCare, said cuts in Medicare payments were a
factor. His compensation is now similar to what it had
been.
He’s happy and believes patients are well-served by combined efforts
to communicate better about their care, he said.
“It was a positive thing for us to get out of the business of HR
(human resources), health insurance, IT (information technology) and billing,”
he said. “A lot of people say, ‘I can’t believe you’ve gone to work for a
hospital,’ … (but) St. David’s has been very
hands-off.”
Dr. Koushik Shaw, a urologist, joined Austin Diagnostic Clinic, a
large physician group, after his residency in 2004. He appreciated the access to
other doctors for referrals, electronic medical records and other administrative
help. But he craved independence and struck out with a partner in
2010.
“What happens when you are in large group is you have to put the needs
of the group ahead of yourself,” Shaw said.“The harder you work, you can
increase your income somewhat, but you will have… a master looking over your
practice.”
Shaw said he took out a loan and had no income for the first six
months. Now, he and his partner have about a dozen employees and have treated
about 6,000 patients, he said. Shaw added that he works harder and spends 10 to
25 percent of his time running the business.
“We are continuing to grow despite the fear mongering” about the
future, Shaw said. “My satisfaction in the way I practice is incredible. (But)
the way I practice is going to be a relic.”
The consulting firm Accenture said last year that the percentage of
independent doctors fell from 57 percent in 2000 to 39 percent in 2012. Donna
Kinney, director of research and data analysis at the Texas Medical Association,
questioned that data, which she said exaggerates the trend. She cited a TMA
survey last year that said just 4 percent of Texasphysicians and residents are hospital
employed.
The Southwest has indeed moved more slowly, Chenven said. Texashas an independent
streak, he said, as well as state laws that make it harder to sue for
malpractice and that forbid hospitals from employing physicians. Texas hospitals, however,
are permitted to affiliate with doctors and generally do so through nonprofit
corporations.
Berger, the solo practitioner, said no one yet knows how the trend
will end up. “If it doesn’t work out, how do we unwind this?” she asked. “I’m
just afraid we are burning bridges and making changes we won’t be able to go
back on.”