Here are five options spine surgeons are exploring for partnerships with hospitals that don't include employment. 1. Enter into a co-management agreement with hospitals. Surgeon groups may also want to enter into deeper partnerships with hospitals than call coverage or payment agreements by contracting professional service agreements or co-management arrangements. These arrangements will allow surgeons to become more involved with the hospital while remaining independent and strengthening their revenue stream.
"I think you'll see more surgeons doing professional service agreements," says Michael Webb, MD, a neurosurgeon with NeuroTexas Institute in Austin. "In these types of arrangements, hospitals start a clinic and a physician or physician group contracts to provide services for the clinic. The two most common reimbursement arrangements are based on RVU or a percentage of collections."
Surgeons may also have an opportunity to roll call coverage into a medical directorship position or form a management company that will provide expertise in running the orthopedic or spine service line at a hospital.
"These are some of the more complicated relationships available with hospitals, and I think they are a good option for people who are relatively new to the practice, or even those who are established who want to prop up their fee-for-service income but still have the freedom to control their own practice," says Dr. Webb. "For co-management arrangements, the management company is compensated for reaching goals like patient satisfaction or lowering hospital implant cost, which can prop up income without being directly employed."
2. Partner with insurance companies to keep rates competitive. Insurance companies are now looking to make the healthcare market more competitive in terms of pricing, and in some communities large physician groups are able to partner with them to keep costs low. "In states where there are favorable payors and workers compensation, partnering with payors instead of hospitals will help surgeons avoid employment," says William Stevens, MD, founder of the Center for Spinal Disorders and OSNA member in Phoenix. "Take advantage of the fact that payors are leery of hospitals being in the position to call all the shots."
For example, in Utah costs are high because hospitals have employed nearly all surgeons in the state. Since hospitals employ all the surgeons, they can demand a higher rate from payors than otherwise possible.
"When insurers look at their costs in places like Utah, they aren't happy with hospitals and large systems controlling everything in the market," says Dr. Stevens. "You can partner with insurance companies on contracts for reimbursement and providing care if they are concerned about hospitals having too much control. You can also work with them on an accountable care organization or bundled payments where the payment goes through the physician first."
Large orthopedic groups around the country are now exploring this option with payors, and it could become more common among spine surgeons as well. "With a large group of surgeons, such as OSNA, you are in a position to take advantage of these partnerships," says Dr. Stevens. "We are in the early phases of exploring these kinds of partnerships, but insurers are excited because they think we can do a good job of keeping the price down."
3. Merge with other spine care providers. Smaller practices having a difficult time staying afloat can expand the number of specialists, enhancing the case volume and potential revenue flow at the practice, by recruiting new physicians or merging with other groups in the area. Bringing additional physicians onboard will increase revenue and consolidate overhead costs.
"A major source of trying to be efficient and increase revenue is by creating larger practices," says Terrence Crowder, MD, a spine surgeon with Sonoran Spine Center in Mesa, Ariz. "Instead of being in a solo practice, people are getting together and using the same billing system for five people instead of just one. You can consolidate resources and cut overhead because you are sharing costs and overhead prices."
Spine practices looking to add an ambulatory surgery center don't necessarily need 10 or 15 spine surgeons committing their cases; Dr. Siddique and his partners have done so with only four spine and pain physicians.
"You don't need more than 10 surgeons to be profitable, but the practice must be run well," says Khawar Siddique, MD, a spine surgeon with Beverly Hills (Calif.) Spine Surgery. "Find a like-minded group of spine, pain and orthopedic surgeons who want to go into business together."
4. Work with ancillary providers for a mutually beneficial relationship. Patients with spine issues and back pain often have a variety of specialists working on their care. Consider whether it is possible to include pain blocks, physical therapy and other procedures besides just spine surgery as part of a concierge practice. If those services aren't offered at the practice, you may want to seek another provider or facility that also caters to concierge patients to ensure continuity of the level of care.
"To provide a full care menu to concierge patients, offer either a full range of services in-house that would be included, or arrange or contract with other providers — such as hospitals, ASCs or physical therapists — provided they offer similar levels of care for the patients," says Wayne J. Miller, Esq., a healthcare transaction and regulatory attorney and founding partner of Compliance Law Group in Los Angeles.
Mr. Miller cautions that arrangements that involve referrals in-house or to outside providers must meet regulatory constraints. From a legal standpoint, there are federal fraud and abuse/anti-kickback as well as self-referral or "Stark law" issues that could come into play if there is a financial relationship between the referring surgeon and the referral recipient. Even if the surgeon is opting out of Medicare, the federal law may apply because the other providers receiving the referrals may continue to be Medicare providers. State laws will likely have similar requirement to the national laws on this matter and may apply to all patient referrals regardless of source of payment.
"Referral arrangements must not be tainted by unlawful financial inducements between the doctor and other providers, such as a hospital or surgery center," says Mr. Miller. "These arrangements should solely focus on how each party can contribute to the full care of the patient and what particular services are offered by each provider."
5. Become involved in community events. Since it is important for a spine center to have patients and make a profit, external marketing is necessary. One method is to gain exposure for the practicing physicians.
"Consider what organizations or societies in your community physicians should be involved with. Organizations like the chamber of commerce or non-profits," says Stephen Hochschuler, MD, founder of Texas Back Institute in Plano. "Look into areas of children education, sports and disadvantaged individuals. You have to keep your eye on everything."
Physicians that become involved with community groups may not only meet potential patients but also other physicians who could drive patient volume through referrals. Relationships are integral for acquiring patient referrals and driving patient volume whether those relationships are community or medical based.
"I think you'll see more surgeons doing professional service agreements," says Michael Webb, MD, a neurosurgeon with NeuroTexas Institute in Austin. "In these types of arrangements, hospitals start a clinic and a physician or physician group contracts to provide services for the clinic. The two most common reimbursement arrangements are based on RVU or a percentage of collections."
Surgeons may also have an opportunity to roll call coverage into a medical directorship position or form a management company that will provide expertise in running the orthopedic or spine service line at a hospital.
"These are some of the more complicated relationships available with hospitals, and I think they are a good option for people who are relatively new to the practice, or even those who are established who want to prop up their fee-for-service income but still have the freedom to control their own practice," says Dr. Webb. "For co-management arrangements, the management company is compensated for reaching goals like patient satisfaction or lowering hospital implant cost, which can prop up income without being directly employed."
2. Partner with insurance companies to keep rates competitive. Insurance companies are now looking to make the healthcare market more competitive in terms of pricing, and in some communities large physician groups are able to partner with them to keep costs low. "In states where there are favorable payors and workers compensation, partnering with payors instead of hospitals will help surgeons avoid employment," says William Stevens, MD, founder of the Center for Spinal Disorders and OSNA member in Phoenix. "Take advantage of the fact that payors are leery of hospitals being in the position to call all the shots."
For example, in Utah costs are high because hospitals have employed nearly all surgeons in the state. Since hospitals employ all the surgeons, they can demand a higher rate from payors than otherwise possible.
"When insurers look at their costs in places like Utah, they aren't happy with hospitals and large systems controlling everything in the market," says Dr. Stevens. "You can partner with insurance companies on contracts for reimbursement and providing care if they are concerned about hospitals having too much control. You can also work with them on an accountable care organization or bundled payments where the payment goes through the physician first."
Large orthopedic groups around the country are now exploring this option with payors, and it could become more common among spine surgeons as well. "With a large group of surgeons, such as OSNA, you are in a position to take advantage of these partnerships," says Dr. Stevens. "We are in the early phases of exploring these kinds of partnerships, but insurers are excited because they think we can do a good job of keeping the price down."
3. Merge with other spine care providers. Smaller practices having a difficult time staying afloat can expand the number of specialists, enhancing the case volume and potential revenue flow at the practice, by recruiting new physicians or merging with other groups in the area. Bringing additional physicians onboard will increase revenue and consolidate overhead costs.
"A major source of trying to be efficient and increase revenue is by creating larger practices," says Terrence Crowder, MD, a spine surgeon with Sonoran Spine Center in Mesa, Ariz. "Instead of being in a solo practice, people are getting together and using the same billing system for five people instead of just one. You can consolidate resources and cut overhead because you are sharing costs and overhead prices."
Spine practices looking to add an ambulatory surgery center don't necessarily need 10 or 15 spine surgeons committing their cases; Dr. Siddique and his partners have done so with only four spine and pain physicians.
"You don't need more than 10 surgeons to be profitable, but the practice must be run well," says Khawar Siddique, MD, a spine surgeon with Beverly Hills (Calif.) Spine Surgery. "Find a like-minded group of spine, pain and orthopedic surgeons who want to go into business together."
4. Work with ancillary providers for a mutually beneficial relationship. Patients with spine issues and back pain often have a variety of specialists working on their care. Consider whether it is possible to include pain blocks, physical therapy and other procedures besides just spine surgery as part of a concierge practice. If those services aren't offered at the practice, you may want to seek another provider or facility that also caters to concierge patients to ensure continuity of the level of care.
"To provide a full care menu to concierge patients, offer either a full range of services in-house that would be included, or arrange or contract with other providers — such as hospitals, ASCs or physical therapists — provided they offer similar levels of care for the patients," says Wayne J. Miller, Esq., a healthcare transaction and regulatory attorney and founding partner of Compliance Law Group in Los Angeles.
Mr. Miller cautions that arrangements that involve referrals in-house or to outside providers must meet regulatory constraints. From a legal standpoint, there are federal fraud and abuse/anti-kickback as well as self-referral or "Stark law" issues that could come into play if there is a financial relationship between the referring surgeon and the referral recipient. Even if the surgeon is opting out of Medicare, the federal law may apply because the other providers receiving the referrals may continue to be Medicare providers. State laws will likely have similar requirement to the national laws on this matter and may apply to all patient referrals regardless of source of payment.
"Referral arrangements must not be tainted by unlawful financial inducements between the doctor and other providers, such as a hospital or surgery center," says Mr. Miller. "These arrangements should solely focus on how each party can contribute to the full care of the patient and what particular services are offered by each provider."
5. Become involved in community events. Since it is important for a spine center to have patients and make a profit, external marketing is necessary. One method is to gain exposure for the practicing physicians.
"Consider what organizations or societies in your community physicians should be involved with. Organizations like the chamber of commerce or non-profits," says Stephen Hochschuler, MD, founder of Texas Back Institute in Plano. "Look into areas of children education, sports and disadvantaged individuals. You have to keep your eye on everything."
Physicians that become involved with community groups may not only meet potential patients but also other physicians who could drive patient volume through referrals. Relationships are integral for acquiring patient referrals and driving patient volume whether those relationships are community or medical based.