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Wednesday, 14 March 2012 16:39

Better together? Hospitals continue luring physicians groups with promise of efficiencies

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HOLLAND — The recent addition of a small surgical practice that boosts the physician lineup at Lakeshore Health Partners follows a major trend within health care.

A litany of forces has increasingly led physicians to opt to become employed by a large medical group practice or health system, enabling them to leave behind the growing administrative burdens of running a private practice in an age of health care reform.

“It’s getting harder for individuals and small groups to survive,” said Dr. Sanjeev Mathur, an internist and head of Lakeshore Health Partners, the medical group formed three years ago by Holland Hospital. “It’s getting harder and harder to practice.”

Federal health reforms, changes in how care providers are paid, ever-tightening reimbursement payments from health plans and mandates to implement costly electronic medical record systems are among the factors driving doctors to become health system employees and steer away from private practice.

Those forces have pushed Lakeshore Health Partners’ ranks from seven physicians when the medical group began in 2009 to 45 physicians today, plus 17 mid-level care providers that consist of physician assistants and nurse practitioners who are taking on a greater responsibility of primary patient care.

In each instance, physicians approached Lakeshore Health Partners, Mathur said.

The latest additions to the medical group were Lakeshore Surgical Associates, a three-surgeon group that became part of Lakeshore Health Partners on Jan. 1, and two physicians brought aboard for the new Lakeshore Health Partners-Women’s Health office in Zeeland.

Mathur, one of the seven doctors who went to Holland Hospital three years ago, expects the medical group to make additional acquisitions in 2012.

“We see more growth as time comes on and more pressure grows on private groups,” he said.

Lakeshore Health Partners is among a number of medical groups formed in recent years in West Michigan, including the Spectrum Health Medical Group, which has made a number of acquisitions since 2009, and the Advantage Health/Saint Mary’s Medical Group, a successor practice to the former Advantage Health Physician Network and owned jointly by Saint Mary’s Health Care and member physicians.

In Berrien County, Lakeland HealthCare two years ago acquired the market’s largest medical group, whose physicians became employees of the St. Joseph-based health system.

The consolidation trend aims to generate improvements in the quality and cost of care and operating efficiencies, Mathur and others say, by leading to the better coordination of care as patients are referred or transferred through the system.

Rather than working as separate businesses, an employment model links hospitals and physicians together with shared clinical and business interests.

Through that better alignment, the trend is alleviating some of the natural tensions that can often arise between hospitals and independent physicians, some of whom have long fiercely protected their autonomy.

“The basic dynamic is changing drastically because they can no longer do that and thrive,” Mathur said.

Roger SpoelmanRoger Spoelman, CEO of Mercy Health Partners, perhaps explained that dynamic best at a recent health care outlook hosted by the Alliance for Health and Grand Valley State University.

Spoelman recalled a conversation from a couple of years ago when a Muskegon cardiologist came to his office and told him “hell has frozen over.” The cardiologist, after years of independent practice, now wanted to become an employee of Mercy Health Partners.

They struck a deal and Mercy Health Partners merged the cardiology group into its Lakeshore Health Network medical group.

“It’s sort of a consenting act between two unnatural partners,” said Spoelman, who expects further consolidation ahead, especially as reimbursement payments to doctors and hospitals are increasingly bundled together and pegged to quality outcomes for their patients.

“We are all motivated, for the first time in history, to do something significant, to do something radical,” he said.

For doctors who want to keep their independence and not become hospital employees, medical groups tend to offer a lesser degree of affiliation that falls short of acquisition.

The same forces driving those affiliations led to the formation in late in 2010 of the

Physicians Organization of Michigan by the University of Michigan Health System and the Grand Rapids-based Physicians Organization of West Michigan, an umbrella group of several hundred independent doctors in the region.

Across Michigan, one in five licensed physicians was a salaried employee of a hospital in 2010, versus 17 percent in 2009, according to annual physician survey conducted by the Michigan Department of Community Health. Results of the 2011 survey are due out soon.

Nationally, nearly three-quarters of the 424 health care organizations, representing more than 64,000 care providers responding to an annual survey by SullivanCotter and Associates Inc., said they increased physician staffing levels during 2011. About the same number of respondents indicated they planned to hire more physicians and mid-level care providers in 2012.

The data is “consistent with the labor market shift in physician employment that has been occurring over the past few years,” said Kim Mobley, the practice leader for physician compensation at SullivanCotter’s Detroit office. “We expect this trend to continue for some time.”

While the tighter alignment of hospitals and doctors holds promise for greater efficiency, quality and cost, data on whether that is actually occurring is difficult to gauge at this point for Lakeshore Health Partners.

Mark Pawlak, VP of quality and ancillary services at Holland Hospital, said conducting an analysis of Lakeshore Health Partners’ performance from one year to the next hasn’t been doable as the medical group grows.

“Because of the ongoing addition of (Lakeshore Health Partners) members, there has not yet been a period of time when we could do an ‘apples to apples’ snapshot comparison of quality/efficiency improvements,” Pawlak said.

Pawlak notes that data collection and sharing has improved through Lakeshore Health Partners, and the group provides a single point of entry into the system for patients who may require care from multiple physicians.

“These are all positive improvements,” he said.

Medical group administrators say data showing the value of the tighter alignments will come with time.

For now, having united business interests has made it easier for physicians at the Advantage Health Saint/Mary’s Medical Group in Grand Rapids to adopt common electronic medical records and to implement the patient-centered medical home model, President and Chief Medical Officer Dr. David Blair said.

The medical home model — which places a high emphasis on primary care, wellness and disease management — requires a major transformation of a medical practice, Blair said. Advantage Health has implemented the model at 22 of its physician offices.

Minus the administrative support of a larger group, “a practice could not implement, or would find it extremely difficult to implement all by themselves,” Blair said.

The Advantage Health Saint/Mary’s Medical Group has 185 physicians and most recently absorbed Grand River Cardiology last summer. Another 150 independent physicians have affiliated with the group.

Blair and others see more physicians migrating to an employment model. Data show a large number of graduates from medical school opting for employment by a large medical group or hospital, rather than working at an independent practice, he said.

“They don’t want to start their own business. They consider it too much of a risk,” Blair said.

Read 2347 times Last modified on Sunday, 12 August 2012 11:05

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