Is A Group Practice Without Walls Right For You?

Kevin McDonald, DPM

Economic and regulatory forces are leading to the consolidation of medical practices across the country. Hospital systems are acquiring primary care practices, multispecialty clinics are clamoring for their share of the pie and single specialty medical mega-groups are coming together to grab market share across geographic areas. It is now rare for young doctors completing their training to open up an independent office.

   These developments may lead contemplative private practice podiatrists to wonder: “What do I do now?” Podiatrists have typically practiced successfully in solo and small group settings. This arrangement does not appear to be the wave of the future and the thought of working for a large corporation might not be that attractive to individuals used to independence at the workplace. Thus, the idea of maintaining a degree of independence while coming together with many like-minded colleagues in order to survive and thrive has an appeal to many podiatrists.

   Podiatrists historically have sought key advantages when working together. These advantages include:

• decreased expenses through economies of scale;
• increased revenue through an enhanced range of services;
• increased office hours;
• the development of “best practices”; and
• shared responsibilities and the pooling of financial and professional resources.

   Advocates of the so-called “super group” model in which more than 20 podiatrists work together under a single tax identification number tout additional advantages. These advantages include:

• decreased expenses through negotiated “group discounts”;
• increased revenues through the development of ancillary income sources, shared marketing efforts, increased visibility and the ability to negotiate improved managed care contracts with private insurers; and
• an enhanced ability to collect the required data needed for third-party payers such as “accountable care organizations” in order to prove cost-effectiveness, compete for business and stay in the “mainstream” of the medical marketplace.

What Are The Benefits Of The Business Model For The Group Practice Without Walls?

The model described below derived from perhaps the first podiatric super group ever formed by Neal Frankel, DPM, and his colleagues in Chicago. John Leardi, JD, and Hal Ornstein, DPM, expanded this model in New Jersey as a “group practice without walls.”1

   Podiatrists in solo and small group practices would face a daunting task in rapidly forming a fully integrated business with 20 or more colleagues. Each podiatric practice tends to vary widely in the scope of services, modes of operation and overall culture. There would be a high likelihood of failure with the attempt of many individual businesses to merge into a completely integrated single business over a short time frame.

   A group of podiatrists (including myself) in North Carolina studied the various options for forming a super group. We came to the conclusion that the group practice without walls model had the best chance of success for us for the following reasons.

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