Staying Independent—Exploring and Understanding the Options

Some say that being employed by a hospital is inevitable. While this may be true for cardiologists, it does not yet apply to urologists, according to Max Reiboldt, CPA, President of the Coker Group in Alpharetta, Georgia. At the American Urological Association annual practice management meeting, Mr Reiboldt led a session to illustrate options for urologists and offer strategies for making practice transitions. While medical care costs are escalating, reimbursements are being cut and greater access to care is being demanded, owing in part to the aging baby boom population. What we are facing, he noted, is all about changing paradigms.

A 2012 survey of 100,000 physicians predicted a decline in independent practices by 33% in 2013. Reasons for moving to a hospital or group practice included financial stability, infrastructure support, ease of recruiting and retaining staff, and not having to deal with a practice “cash-out.” He further noted that strength in numbers does not mean loss of employment or autonomy, or degradation of income.

Mr Reiboldt described several possible routes for practices: limited integration, as in a managed care network; moderate integration, such as a service line management within a hospital, joint ventures or comanagement with ties to a hospital, other physicians, and businesses; or full integration to minimize the economic risk. These settings include a physician enterprise model or a professional services agreement (PSA), accountable care organization (ACO), clinically integrated network (CIN), and quality care (QC) organization.

A comanagement agreement with hospitals would reward urologists for administrative time (nonclinical aspect) and for metrics achieved in performance and patient satisfaction. In a provider-to-provider alignment, urologists can merge with other urologists in a single-specialty practice or a multispecialty practice. This setup might be done in stages: merger assessment, practice formation, legal formation, and preoperational development.

A PSA can be arranged in one of several configurations: (1) traditional, whereby the hospital contracts with the physician for services (the physician remains in private practice, but the staff is employed by the hospital); (2) global, whereby both the physician and staff contract with the health system, but the practice retains the responsibility for managing everyday functions; (3) practice management arrangement, whereby physicians are employed by the hospital, but practice management remains separate; and (4) the hybrid model, whereby the hospital employs the physician and the practice is jointly owned.

An integrated delivery system would include the physician, the hospital, and ancillary services. The CIN works on the same principle as the ACO, but the focus remains on the private side, whereas the focus of an ACO is on the government side (as in Medicare). In a CIN, physicians are contracted and employed within hospital health systems, which provide a key source of capital. Choosing an ACO/CIN/QC concept could help to reduce or control the per capita costs of care by stopping unnecessary procedures.

Mr Reiboldt observed that practices should have an alignment strategy in mind and be poised to consider the range of alternatives. The Affordable Care Act is going to bring unprecedented changes. Deny them or deal with them accordingly.