The Ins And Outs Of Forming A Multispecialty Practice

By Leon R. Brill, DPM, FACFAS, CWS

The winds of change have blown through the medical community with a vengeance in the last 25 years. Managed care has turned medicine upside down. Dramatically lower fees and higher overhead expenses have made us work doubly hard just to maintain some level of consistency in our practice. Just as we have seen in the hospital community, economic necessity has made some strange bedfellows.
Hospitals and outpatient centers, who previously may have been formidable competitors, have now become partners. Some specialty groups, such as anesthesiologists, vascular surgeons and primary care practitioners, have merged to reduce overhead expenses and capture increased patient population.
Podiatric medicine is no exception. I have seen several groups of podiatrists, who previously were aggressive competitors, suddenly merge into large single specialty groups to decrease their costs and increase their geographic area to capture a larger patient population. We have all managed to survive.
An emerging but less common trend in podiatric medicine is the development of multispecialty practices. Why is this trend becoming more popular? In no small way, diabetic care and wound care have played a major role. Diabetic foot medicine and wound care have done more to bring podiatric medicine into the mainstream medical community than any other venue we have ever seen since our profession began. We have become a “natural fit.”
With the increase in multidisciplinary conferences, such as the American Diabetes Association’s Foot Council meetings and the Wound Healing Society meetings, we, as a group of specialists, have had ever increasing exposure to other specialties. They see we have value to bring to the table. Certainly, wound care is not the only “fit” for us. It may be the most natural fit, however. Podiatric sports medicine, orthopedic medicine and geriatric medicine are also viable areas in which to explore multispecialty care.

Seeing The Need And Finding The Fit
My colleague and I saw the need for multispecialty care in the treatment of our diabetic and wound care patients. Patients were continually being shuffled around and each physician approached the patient according to his or her specialty line. Care and information were frequently fragmented (see “When Communication Breakdowns Can Affect Care” on page 59).
By centralizing the practice with nurse managers, we are able to provide more cohesive and timely medical care. Since we are not always in the clinic at the same time, our nurse managers are able to coordinate care and provide the continuum of care that is needed.
When you have decided to practice in a multispecialty setting, it is important to assess each other’s strengths and weaknesses. Where do you fit in from the medical standpoint? For instance, in the interest of the group at the Wound Care Center, our vascular surgeon, although he is trained in foot amputations, will refer them to me. I, in turn, will refer many of my office-based debridement patients to our wound care/hyperbaric oxygen (HBO) therapy physician. We try to respect each other’s “turf” and most of the time it works well.
In a hospital setting, since none of us have a financial relationship with each other or the hospital, there are no issues of Stark Law violations. Each of us is an independent contractor.
In addition to an institutional multispecialty center, we have recently formed a private practice multispecialty group. The initial reasons were the same. We wanted a central place where our patients could receive comprehensive care with continuity. Our financial and referral relationships are much different because of potential Stark Law issues. Referring to an entity that you own or have a major financial interest in may raise red flags with government agencies. Choosing a partnership was easy. My partner and I have worked at the Wound Care Clinic together for the last eight years. We both share common practice philosophies of how we want to take care of our patients.
Indeed, patient care first has to be the most important aspect of your practice. We easily agreed on what services we wanted to provide. Again as with the hospital-based wound care center, we both brought complementary talents to the table. I tend to be an aggressive surgical debrider and offloader, while my partner is very thorough in medical management and wound care management skills. We also share a common vision of what we want to provide at our center in terms of ancillary services, such as radiology, physical therapy and patient education. We both share an interest and do a fair share of clinical research, and we have been able to incorporate this into our practice style.

Tackling Reimbursement Issues And Practice Expenses
With different specialties, there are different reimbursement issues. Surgical specialities are procedure-driven and tend to have a higher reimbursement rate and lower volume, while medical management has lower reimbursement rates and higher volume. My partner and I, with respect to wound care, fall in the middle. I tend to do more surgical procedures and less management, while he tends to do less surgery and more management. In addition, he has a separate hyperbaric medicine component and I have a separate elective podiatric medicine component. We elected to maintain our own private practices and form a joint corporation to conduct research and handle practice expenses.
We hire and maintain our own staff and maintain separate identities. We handle common utilities, such as our phone system and billing maintenance, through our corporation. Each doctor pays his share of rent to the corporation, which owns the lease. Since we own our own building, we formed a separate real estate partnership. The corporation has also hired physicians under contract labor for research or outside patient care at other facilities. This enables us to refer to each other without worrying about conflict of interest. Patients referred through our wound center are evenly divided unless there is a clear reason not to do so, such as wounds that are not on the lower extremity or clearly podiatric-related referrals. This relationship gives us the best of both worlds. It allows us to maintain autonomy yet function as a multispecialty practice.
Depending on the model you choose, you will generally see a reduction in overhead expenses. You will see this mostly in fixed expenses, such as rent, utilities and maintenance. With our model, since we were fortunate enough to have built our own building, our real estate entity has three tenants: My practice, my partner’s practice and the Limb Salvage Centre. Despite corporate taxes and larger space, this has still resulted in cost savings.
For instance, although our corporation is too new to see the full cost savings, we estimate that we will save 20 percent on our phone system. We were able to obtain a larger phone system to handle a larger staff, but maintain total autonomy with respect to our practices. We estimate our rent and utilities will be reduced by 20 percent. We were able to increase the size of our respective office space by 40 percent while still reducing our costs.
Our two practices are quite different and although we do utilize a lot of the same equipment and supplies, there is enough difference in practice style that a sharing of supplies is not equitable. For instance, I order considerably more X-rays than my partner and he uses more compression dressings than I do, since he sees more venous stasis ulcers.
As we have progressed, we have adapted and revised as to what is “yours, mine and ours.” Each of us has his own office manager and the two managers meet biweekly to discuss and revise these issues, and make sure that accounts payable reflect accurately for each doctor. There is no doubt that there will continue to be squabbling about expenses. Keeping an open line of communication and “picking your battles” with your partner are of vital importance.
Since we picked the independent practice multispecialty model, one of our greatest fears was merging of our staffs into one administrative area. We have different management styles and employment packages. This is clearly one disadvantage of our model. Although there have been some “grasses greener” overtures, our staffs have overall managed to form close bonds. With respect to the “common” entity, the Limb Salvage Centre, maintaining the clinic, ordering supplies, and making appointments and phone callbacks are delegated equally among both staffs.

Final Words Of Wisdom
There are several ways to form a multispecialty practice. It depends on the needs of each individual practitioner. The main reason we chose our model was we both had and continue to have successful independent practices, and both of us do not want to lose our autonomy or identity. For newer physicians who are not as concerned about economies of scale and maintaining an independent identity, then establishing one corporate entity may be the best choice.
The bottom line is the mutispecialty practice model results in increased patient referrals (directly and indirectly), reduced expenses and, most importantly, better quality of patient care.

Dr. Brill practices at the Limb Salvage Centre at the BrillStone Building and is President of the BrillStone Corporation in Dallas. He is also a Consultant in wound care and reconstructive foot and ankle surgery at the Wound Care Clinic at Presbyterian Hospital in Dallas.

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