From increased practice consolidation to evolving marketing strategies and stiffer competition with big players, five spine surgeons discuss the biggest threats to physician-owned orthopedic practices.
Ask Spine Surgeons is a weekly series of questions posed to spine surgeons around the country about clinical, business and policy issues affecting spine care. We invite all spine surgeon and specialist responses.
Next week's question: What keeps you up at night as a spine surgeon in 2021?
Please send responses to Alan Condon at acondon@beckershealthcare.com by 5 p.m. CDT Wednesday, May 26.
Note: The following responses were lightly edited for style and clarity.
Question: What do you see as the biggest threat to physician ownership?
Andrew Cordover, MD. Andrews Sports Medicine & Orthopaedic Center (Birmingham, Ala.): I believe that in next few years, the consolidation trend will continue. It will be likely that there will be fewer small to mid-sized practices that are not owned by a hospital, private equity or some other entity. Consolidation of these groups will probably become more mainstream. However, there are some merits to the model. The new, value-based payment models for both federal and private payers require sophisticated management and data analysis that most practices do not have available. Additionally, collective negotiating and maintenance of quality metrics may be easier to demonstrate.
Consolidation can provide opportunities for vertical integration through surgery centers or other ancillary services as capital and additional practice resources will be more readily available through these groups. Another benefit would be the economies of scale that may be realized operationally or through group purchasing of supplies, employee benefit packages and various insurance policies. Also, volume will be driven by larger contracts.
Richard Kube, MD. Prairie Spine (Peoria, Ill.): Very bluntly, the consortium of big insurance, big hospital and big government poses the greatest threat. Independent physician ownership is a challenge for those entities due to the very nature of their independence. Small, independent businesses are nimble and can evolve quickly to adapt to market demands. They are also better equipped to customize and individualize service. These attributes are competitive advantages held over the large bureaucracies. Any system that is in direct competition with the independently owned systems are inherently threats.
Melanie Kinchen, MD. 360 Back & Spine Center (Grapevine, Texas) and MpowerHealth Clinically Integrated Network (Addison, Texas): The biggest threats to physician ownership are the increasing and ever-changing marketing strategies necessary to compete with large groups and hospital networks. Larger groups and hospital networks obviously have more capital to effectively market using all avenues of social media. More importantly, they are able to control the flow of patients through corporate contracts. These contracts funnel patients into certain networks or hospital systems. While individuals or practices may have privileges at these hospitals, they are not considered the preferred provider — not because of quality or ability, but because of the exclusion from that relationship. Smaller or individual practices also can't leverage with insurance companies the same way larger groups can, so their reimbursement is often significantly less. These factors lead to less patient volume, less reimbursement and less revenue to reinvest in technology upgrades and marketing.
Brian Gantwerker, MD. Craniospinal Center of Los Angeles: There may be some difficulties ahead for physician ownership. The main competitors for this are hospital conglomerates. Although doctors and hospitals align on many things, only doctors are fully vested in patient care and patient outcomes. I think physician ownership should be the most straight, narrow and efficient. There are invariably bad apples, most recently some unfortunate examples of physicians acting fiscally and ethically poorly and exhibiting gross turpitude. Overall, though, I think doctors are uniquely suited to manage the services they provide. We are already accountable, so aren't we the ones best to deliver it and manage how it's delivered? If we as physicians can exhibit ethical backbone, and do what's right and best for the patients, it will ultimately result in financial success for our practices and happiness for our patients.
Ali H. Mesiwala, MD. DISC Sports & Spine Center (Newport Beach, Calif.): The biggest threat to physician ownership is not external, but internal. Over the last four decades, the actions of a few have had devastating consequences for the majority of spine surgeons, as regulations and oversight have become more pervasive and restrictive in order to protect patients, reduce costs and address perceived or real conflicts of interest. Many spine surgeons have been reticent to work together to achieve progress, and are often too competitive in trying to control contracts and geographies, generate additional income through medical devices and ancillary revenue streams and restrict access to care and technologies, leading to unforeseen consequences and costs. The Sunshine Act and Stark Law regulations are the direct result of these actions, and further regulations will only create more challenges unless we work together and with our patients to create a better environment in which to practice.