Michael Kellams, DO, an anesthesiologist based in Indiana, discusses healthcare consolidation and how physicians are navigating the market today.
Dr. Kellams is speaking on a panel about the future of orthopedics and physician practices at the Becker’s 15th Annual Spine, Orthopedic and Pain Management-Driven ASC Conference + The Future of Spine on June 22 to 24, 2017 in Chicago. Click here to learn more and register.
Q: How are spine, orthopedic and pain physicians navigating the challenges associated with consolidation in healthcare?
Dr. Michael Kellams: In my area, we have seen what has happened the first wave of consolidations of physicians’ practices into hospital systems over the last 10 years. The result has been mixed. Many physician groups succumbed to the pressure to strengthen their negotiating power and streamline patient care and referral networks. The downside was that administrators assumed the decision making and largely disregarded what physicians knew was best for patient care. In our large Midwest city, the top spine groups avoided that first wave.
The chasm has grown between the large hospital systems and the surgeon practices over patient care issues. The hospitals seem to have lost sight of who their primary customers are and who fills the ORs and hospital beds and thus the hospital's coffers. Recently, the two largest, and competing, spine practices instead joined forces and built their own fully independent physician-owned and physician-run spine hospital, The Indiana Spine Hospital. They know that they can provide better patient outcomes, better patient satisfaction, lower costs and better overall surgeon experience for inpatient spine surgeries. We are excited to see how this affects competition for patients and improves cost and care overall in the Indianapolis area.
Q: In what situations is it smarter for independent physicians to merge or sell? When should they stay independent?
MK: Independent physicians should weigh the overall risks and benefits when considering merger or sale of their practice. A small group that cannot compete and end up losing revenue due to all the costs associated with the ACA and whatever the new administration may replace it with often have no choice. Well established larger practices that have the reputation of excellence and cost containment can earn a seat at the table and out-negotiate the behemoth hospital systems. This is what we are witnessing here in our city and the patients will benefit.
Q: How can physicians improve efficiencies after consolidating with a larger practice/hospital?
MK: The only way to have an effect on efficiency of care is to have representation in the board room. Sometimes we see a group get representation on the board, and then the hospital brings them over to the other side and they change hats and lose perspective. It is important for physicians to have representation uninfluenced by a hospital paycheck. Physicians must never lose sight of why they do what they do and must use their voices when warranted. "If you aren't seated at the table, you are on the menu."