To Preserve Quality Healthcare, We Need to Form Large Specialist Groups

Dr David RosenBy David Rosen, MD, President of Midwest Anesthesia Partners

Of all the challenges that have emerged from Obamacare, the most daunting is uncertainty. 5.4 million newly insured patients have joined the U.S. healthcare system, we face nationwide shortages of physicians, and frankly, hospitals and doctors don’t know what insurers will pay in the near future. New regulations, including the mandate for electronic records, are driving up operational costs without improving the quality or efficiency of healthcare.

More than ever before, specialists need economies of scale to survive, but becoming hospital employees or selling out to private equity groups are unpalatable solutions. Instead, we need to form large, self-governed specialist groups to thrive in the Obamacare era and preserve quality healthcare.

From the Private Practice to Big Healthcare

Until recently, anesthesiologists like myself could start private practices right out of school, contract with multiple hospitals, maintain low overhead and make a good living. Medical specialists have always valued independence and entrepreneurship, but this is becoming a pipedream under Obamacare.

Malpractice insurance, electronic records, staff and operational responsibilities have become too burdensome for lone specialist and small group practices. Even hospitals are merging into gargantuan networks just to contain these costs. So, most doctors have responded in one of two ways:

Some become employees at hospitals. Especially for doctors fresh out of school, hospitals guarantee job security and the ability to pay off medical school loans. However, hospital bureaucracy can make specialists less efficient, and being salaried removes the entrepreneurial incentives of private practice. 

Other doctors and small practices are selling out to private equity groups who promise to pay cash up front and fight for equitable rates from insurance companies. The low overhead of specialties like anesthesiology is especially attractive to investors. However, physicians have to sacrifice independence to institutions that are committed investors and profit, not the Hippocratic Oath.

Specialists are being sucked into ‘big healthcare’. This threatens to fix costs, compromise quality and limit America’s ability to attract the best and brightest to medicine. It demands that physicians come up with better alternatives.    

The Case for Specialist Groups

To achieve economies of scale, preserve independence and protect against uncertainty, I believe specialists need to form their own group practices. This option is far better than working for hospitals or selling out to private equity groups. It is the best way to preserve quality healthcare in spite of uncertainty and the rise of big healthcare.

At my specialist group, Midwest Anesthesia Partners, roughly 100 physicians pool staff, technology and brains to maintain control over our practices. We work as individual entrepreneurs in a group structure with a shared purpose. Through group bargaining power, we achieve better rates on malpractice insurance and we negotiate equitable payment from insurers. Our group also gathers data on patient outcomes in order to prove that we provide above average care. Size and data allow us to negotiate toe-to-toe with large hospitals systems and healthcare networks.      

We didn’t band together to make more money. We formed this partnership so we could continue to make the best decisions for our patients. Physicians should not be led by businessmen, bankers and insurers. Their incentives clash with our commitment to providing quality care – sometimes at the expense of profit.

As physicians, we have common values and purpose. When we pool ideas, we find high levels of consensus, and we find opportunities to innovate in our specialty. Large group practices are the best option we currently have.

Appreciate the Situation

In a speech about Obamacare, Nancy Pelosi famously told the Legislative Conference for the National Association of Counties in March 2010 that “…we have to pass the bill so that you can find out what is in it away from the fog of the controversy.”

Away from the fog of controversy, we’ve discovered that the Affordable Care Act is filled with uncertainty. But that doesn’t mean we should reduce medicine to punching a time card or earning a return for investors. We have to accept uncertainty and appreciate the opportunities it offers. In large specialist groups, we’ll find the resources, collaboration and autonomy we need to stand for our patients.

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