Weighing The Pros And Cons Of Podiatry Supergroups
- Volume 26 - Issue 12 - December 2013
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As issues with reimbursement and technological changes arise, small podiatry groups may be feeling the pinch, making supergroups the wave of the future. This author explores the business model of supergroup practices, including how physicians can join together to take advantage of economies of scale and enhanced practice marketing.
Supergroups in medicine are not a new concept. Well-known facilities such as the Mayo Clinic and Cleveland Clinic started out as supergroups, ultimately evolving into world-renowned medical centers with multiple geographic locations.
Recent history shows us that the formation of supergroups has been successful in many instances but failed in others. The 1990s had business models in which national medical organizations purchased physicians’ practices and created a national footprint, but physician motivation waned and those ventures failed for numerous reasons. There is a lot we can learn from those failures so history does not repeat itself.
During the early part of this century, orthopedic supergroups started to emerge around the country. In my neck of the woods, the Illinois Bone and Joint Institute put together some of the most prominent orthopedic groups on the north side of the city and northern suburbs of Chicago. Now they are a dominant presence with over 100 physicians specializing in all aspects of orthopedics, rheumatology, podiatry and physical therapy. Similar organizations exist around the country in Charlotte (OrthoCarolina), Indianapolis (OrthoIndy) and Los Angeles (Kerlan-Jobe). These organizations have found success by creating value through multiple aspects of patient care.
In the last several years, many hospital systems have gotten involved with purchasing individual practices or practice groups. The hospitals typically pay a nice purchase price for the practice and then a guaranteed salary to the physicians for a certain number of years. Many physicians find this attractive with the uncertainty of reimbursement in the future, especially with the Affordable Care Act on the near horizon. The stability of a known future income and patient access has made doctors who were previously very resistant to “getting in bed” with hospitals amenable to this alternative.
It has been my impression that few hospitals are currently interested in creating large podiatry practices within their systems. Certainly, organizations such as Kaiser Permanente have meaningfully incorporated podiatry but we are not seeing this across the board. With many of the referring physicians joining hospital systems and services increasingly being provided within those hospital systems, many podiatrists are becoming uneasy about their place in the future of healthcare in their communities. That coupled with the increasing burden of time and costs associated with running a medical practice has led many to wonder if being a part of larger group would be a safer alternative to their current practice situation. A common discussion that happens at local and national podiatric meetings focuses on whether there is a place for supergroups in the profession.
The definition of supergroup is vague. Essentially, it means multiple people and practices coming together and using their combined experience, expertise and resources to create a better organization than one left separate. There are different philosophies on how integrated these practices need to become in order to successfully navigate the benefits of forming this supergroup. There are many examples in our profession of different types of supergroups.