Transcript David Dickerson, M.D. - American Academy of Orthopaedic Surgeons

What is the Future of Orthopedics:
Hospital Employed vs Private
Practice
Kevin D. Plancher, M.D., M.S.
Associate Clinical Professor
Albert Einstein College of Medicine
AAOS Fall Meeting
October 10, 2012
Philadelphia, Pa
© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC
Disclosures
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Updated Sept 2012
The following relationships exist:
Item 1 Royalties from a company or supplier:
No Conflict Reported
Item 2 Speakers bureau/paid presentations for a company or supplier:
Linvatec
Item 3A Paid employee for a company or supplier:
No Conflict Reported
Item 3B Paid consultant for a company or supplier:
No Conflict Reported
Item 3C Unpaid consultant for a company or supplier:
Merck
Item 4 Stock or stock options in a company or supplier:
No Conflict Reported
Item 5 Research support from a company or supplier as a PI:
No Conflict Reported
Item 6 Other financial or material support from a company or supplier:
No Conflict Reported
Item 7 Royalties, financial or material support from publishers:
Saunders/Mosby-Elsevier; Thieme
Item 8 Medical/Orthopaedic publications editorial/governing board:
American Journal of Orthopedics,Techniques in Sports Medicine
Item 9 Board member/committee appointments for a society:
AAOS; American Orthopaedic Society for Sports Medicine; American Shoulder and Elbow
Surgeons; Arthroscopy Association of North America; International Society of Arthroscopy, Knee
Surgery, and Orthopaedic Sports Medicine
Personal Disclosure
Career Highlights

Medical School


Georgetown
Residency

Harvard Combined Program


Fellowships

Hand-Indiana Hand Center


Richard Hawkins/Richard Steadman
Full Time Faculty


Jim Strickland
Shoulder /Knee Sports Medicine


Henry Mankin/Clement Sledge/John Hall
1994-1999- Montefiore Medical Center/Albert Einstein College of Medicine
Private Practice

1999-2012 Academic Model



4 Partners
2 ACGME Sport Medicine Fellows
6 Station Cadaver Lab- Located 1 Floor Above Clinical Office
• Not For Profit- 501 C 3
© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC
Private Practice vs Hospital Employed
Topics Covered



Common Ground
Malpractice
Staying Solo


Hospital Employed






Emotional Disadvantages For You
Financial Pro/Cons
Advantages From the Hospital
Perspective
Switching Practices
Hospital Traps


Emotional Advantages
Negotating Contracts/ Did You Know?
Coding
Starting A Private Practice

In-Network/Out of Network
© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC
Private Practice Vs Hospital Employment
First Job-The Facebook Era

Ask The Correct Question!!!!

Which Job will Give Me the Right Mentor




The First Time For Doing an Operation


Great Senior Partners
Con Private Practice


Make quotas for Set Salary
Pro Private Practice


Good Chairman
Con Hospital


Watches You Grow
Pro Hospital


Something New Everyday
The Correct Program


Knowledge is Good
Experience is Limited
Judgement is Still Young
Pressure to Compete and Be Accepted
Ask The Correct Question!!!!
© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC
Private Practice Vs Hospital Employment
15 Years Into Practice

Ask The Correct Question!!!!

Which Job will Continue to Let Me Grow




The Kids Are in School



Seems Easy- Just Show Up and Go Home
What Do I do with All My Patients
• Will They Follow My Practice
Pro Private Practice


They Aren’t Around As Much
Con Hospital


• They Don’t Want to Take Any Call
Pro Hospital


They Don’t Have the Same Work Ethic
The Older Partners


Is Medicine Safe For Me
I Don’t Like to Take Risks
The Younger Partners


Knowledge is Good
Experience is Good
Judgement is Good
No Change- I Know the Drill
Con Private Practice


Pressure to Compete
Working Longer Hours and Less Pay
© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC
Private Practice Vs Hospital Employment
10 Years From Retirement

Ask The Correct Question!!!!
 Which Job will to Let Me Retire
 Knowledge is Excellent
 Experience is Excellent
 Judgement is Excellent
 The Kids Are Out of School
 I Want to Travel More / I Put in My Dues
 Downsizing the House/ Less Costs
 The Younger Partners
 They Don’t Have Experience
 Liability with All Their Complications
 The Older Partners
 I am it!!/ I Want My Buy Out!
 Pro Hospital
 Seems Like Easy Money
• Do Clinic and Just Show Up
Great Vacation Time
Con Hospital
 None/ I am Done in a Few Years/ Why Not?
Pro Private Practice
 I am the Boss Finally
Con Private Practice
 Costs are way up
 My Take home is So Much Less




© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC
Private Practice vs Hospital Employment
What is Common –Success is Easy

Availablity

Yes –Always!
• Non-Displaced Radial Head
Fracture
- Never Send to the Office
- Grandma’s Pubic Ramus

Affability

Difficult These Days
• Administrators
• Nurse Managers
• Colleagues


Playing in the Sandbox
Ability

Cutting Edge Knowledge
• Community Guy
- Popular-Knowles Pins
• You Know Better-A Problem
© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC
Orthopedic Surgeon Practice Setting:
9,400 Returned Practice Surveys
• Type of Practice
2004 2008 % Change
• Priv. Practice-Solo 25.8% 20.9% ↓ 19%
• Priv. Practice-Group 50.6% 44.3% ↓ 8.3%
Total Private Practice Groups & Solo = 65.2%
• Priv. Pract.-Multi sp. 7.3%
• Academic Practice 8.4%
• Hospital Employed 3.8%
8.3%
8.5%
6.7%
↑ 12.3%
↑ 1.2%
↑ 76%
AAOS NOW, December , 2009
Recent Trends in Practice Setting
Source AAOS Survey 2011
Practice Setting
2004
2006
2008
2010
%
Change
Solo-Private
25.8%
24%
20.9%
18.5%
28.2%
Group-Private
50.6%
48%
46.4%
45.3%
10.5%
Multi Specialty
7.0%
7.0%
8.3%
9.0%
28.6%
Academic
1%
2%
6.7%
3.6%
>200%
Hospital
Employment
2%
2%
6.7%
8.1%
>300%
AAOS ,Health Systems Committee:, 2011
Private Practice vs Hospital Employed
Where to Start/ All Jobs-Patients

Hospital Based-Patients
Con-Minimal Relationships
 Pro-Minimal Relationships


Expectations Low
• PA/ Resident
• Middle of the Night

Private Practice-Patients
Pro- Strong Relationships
 Con- High Expectations


Always Available
• Call Schedule Doesn’t matter
• Can’t Drink at a restaurant
© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC
Private Practice vs Hospital Employed
Malpractice

Pro-Hospital Based



Don’t have to worry about it
Paid for but……
Con-Hospital Based


If you leave…? Tail
Do Have to worry about Type


Pro-Private Practice


Select the Type You Want
Decision About Lawyers


Occurrence vs Claims Made
Your Decision
Con-Private Practice

Cost is high

Games-New York State
• Berkshire Hathaway
Private Practice vs Hospital Employed
Advantages of Staying Solo

You are Your Own Boss..
PRICELESS!

Spend all Those Years to
Become an MD

Hospital Based
• Automomy Lost

Hire and Fire

Whomever You Want


Without Asking Anybody!!
Come and Go As You Like!!
© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC
Private Practice vs Hospital Employed
Disadvantages of Staying Solo
 You
Can Come and Go
As You Like………

As Long As You Have
Back-UP!!!!!!!

That’s the Catch!
© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC
Private Practice vs Hospital Employed
Advantages of Hospital Employed

Employee or Business issues



No Concerns
No Overhead Expenses
Stable Income

For the Time Being –Steady Paycheck



Based Upon the Local Private Practitioners
Incomes
MGMA National Data.
Automatic Referral Patterns


Forced by CEO
Artificially Busy

Large Patient Base
• Not Yours


Ability to Encourage Hospital to Develop
a Subspecialty Orthopedic Department
ACO

Automatically Included
© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC
Private Practice vs Hospital Employed
Advantages of Hospital Employed

Employee benefits
401K
 Pension
 Holidays
 Time Off


Reimbursement

Contracts with Payors


No Worries
Malpractice

No Costs To You

Indirectly Effects Paycheck
Private Practice vs Hospital Employed
Disadvantages Hospital
Employed

Employee benefits

No Say


Large Patient Base

Payor Mix



No Ability to Share
Non-Compete

Enforceable


Medicaid
Limited Salary Potential
Ancillary Revenue


When or If They Change
50 Mile Radius
Control of Employees

None

Your Reputation
AAOS NOW, 5/2012
Private Practice vs Hospital Employed
Potential Disadvantages Hospital
Employed

Decision Making



Termination



Bureaucracy
Meeting Time-Lengthy
Without Cause
Forced Retirement Age
Contract Length

Short


3-5Years on Average
Call Schedule

Indentured Servant

Never Graduating
• Rigid CallSchedule
Kaiser

Orthopedics

Administration Does Not Understand How
Orthopedics Differs From Other Specialties
AAOS NOW, 5/2012
Private Practice vs Hospital Employed
Advantages to the Hospital for
Orthopedist Employment

Revenue Generator-HUGE

Ancillary Service Revenue
Generator-Huge
Estimated Between $2.3 to 2.4
Million/MD
 In “Rural Exception Hospital” System

• Even Larger than Huge

Control the Orthopedic
Marketplace

Within the Community

Complete Loss of Autonomy
Private Practice vs Hospital Employed
Advantages to the Hospital for
Orthopedist Employment
 Virtually,
NO DOWNSIDE
to Hospital Administration

Generating 4 to 6 Times Your Salary

But Tremendous Negotiating Ability
• Productivity bonuses
• Add Ancillary Staff
Help You Generate More Income
PA-C, NP’s, Administrative etc.
• Vacation time
PA-C’s Run Clinics for You

Salary Adjustment

Demand Productivity Based Not RVU
Private Practice vs Hospital Employed
Willingness to switch?

Ironically,


“Among Those Currently
Employed, 58% said they
would consider making the
move to private practice”
Yet,

58% in Private Practice Said
They Would Consider
Moving to Being Employed
Full-time!
Shapiro, AAOS Now, 11/2008
Schizophrenia
Private Practice
↑ Stress
Employed Physician
Private Practice vs Hospital Employed
Reasons for Leaving Private Practice


Decrease In Reimbursements
Difficulty in Practice Management

Ancillaries


Difficulty in Marketing


Match competition From Hospitals
Increase In Malpractice Insurance
Premiums

120K at 10 Years Claim Made



Physical Therapy, MRI etc.
Private Practionner NYC
Unwillingness to Provide
Uncompensated Care
 Indentured Slavery
Lifestyle Issues

Work/Home Balance
Private Practice vs Hospital Employed
Being Flexible
Why Be Flexible
 He Thinks He Has a
Problem
 Often We as Physicians
Think We Have a
Problem With Our Job
 Think Twice
 Does He Have a
Problem –NO
 Do You Have a
Problem??????

Private Practice vs Hospital Employed
Hospital Traps-Contracts

Beware of Non Competes

Carve Out Practices to Stay in
Town When Terminated


Avoid Claw Back Clauses

Salary That Is Returned



50 mile radius
When Productivity RVU Goals Are
Not Maintained
Remember The Hospital Does The
Collections
• No Incentive to collect or appeal
Need A Health Care Attorney

Language is Too Complicated

Production Formullas
Private Practice vs Hospital Employed
Hospital Negotiations-Contracts

Revenue-Know Your Worth

Know How Much You Earn
The HMO /Hospital


Surgery

Obtain 2 OR Rooms


Use As leverage:
• Higher Salary
• More Clinic Staff
Once or Twice/ week
Ancillary Help

1 or 2 PA’s In Clinic


Improve Your Efficiency
• “Quality of Life”
• Obtain an Administrative
Assistant
PA-C’s -1st call
Private Practice vs Hospital Employed
Hospital Traps-Olympic Time

Demand a Long Term Contract


10 Year Minimum
Termination Without Cause

Remove From Contract



Learn How to Say No!!!!!!!





To Administrators
To Lawyers
To Nurses Politely
To Patients
Earn Respect


You Sacrificed All Your Years of
Training
Wall Street Boys Start at Age 23


If Making Too Much Money
Must be Paid on a Productivity
Basis
You Start in your Mid 30’s
Stop Worrying!!!!!!!
Private Practice vs Hospital Employed
Hospital Contracts:
Define Outside Activities

Exclude From Hospital Ownership
 IME’s
 Depositions
 Medical Record Reviews
 Paid Quality Assurance Roles


Insurers
Any Paid Agreements
Implant companies,
 Clinical advisor fees
 Consultant Fees
 Speaking Fees
 Royalties

Private Practice vs Hospital Employed
Private Practice Traps

Formula Must Favor Productivity


No Equal Split
No 25% or 50% Split


Termination Without Cause

As You Age / Not Liked



The Higher of Which Always Favors
The Lower Producer.
The Group Wants to Get Rid of You
Require 100% Partner Agreement
Length to Partnership
Buy in For Ancillary Services

Easy in- Easy out

Minimal Buy In and Minimal Buy Out to
an Exiting Partner
• Avoid Owing Alot of Money to an Older
Partner On Retirement
Private Practice vs Hospital Employed
Contracts
Private Practice or Groups

New Laws-Practice Without
Walls Band Together

Join Other Soloists or Small
Groups



Form a Larger Group
Use the Umbrella Merger Concept
Attractive

Local Hospital System

ACO’s
• Will Be In Need of Orthopedic Coverage

Avoid

Fragmented System

May Entice the Hospital
• Hire Their Own Department
Private Practice vs Hospital Employed
Coding

Private Practice

Its Essential-Coding






Learn it in your Residency or
Fellowship
It’s a Game
Its Business
No Emotion
Consider Pro bono Work
Hospital Based





Keep Track of Your Billings
Lost Control of Appeals
Ways to Get Rid of a Doctor
Encourage Monthly Reports
Go to National Courses

Learn How to Code
Private Practice vs Hospital
Employment
Treading Lightly

The Other Side of the Classroom

Treat Others Well


Operating Room Environmental Service
Receptionists
• Boston vs. Indiana vs New York
• Take a Deep Breath

Two Ears, One Mouth

Even When You Are Right
• Senior Partners

Team Player


Even when Equipment is Outdated
Taking A Stand

Be Ready for No
• Be Ready to stand strong and walk out
• Wall Street Style

Athletic Trainers

Be Aware They Run the Show
Private Practice vs Hospital
Employment
Advice-Never Tread Lightly

Patient Advocate

Its You Against the World



Sit Down in an Exam Room
Dictate in the Room Never the
Hallway


It Will Secure Your Practice For Life
They hear you !!!!!
Physicians are Fickle


Send Referral Letters
Hospital Based


Forced to Refer to You
Private Practice

Referrals to Good Guys
• Not necessarily Best Trained

Focus on Patient to Patient
Any Conclusions?
(Too Early-Hold On)
Caught Your Attention?
• Have I Convinced
You to Think
Twice About
Hospital
Employment?
• Lets Look at
Private Practice
Establishing a Sound Business
Classic Medical Model
Where to Start-Private Practice

Know Your Neighborhood

Worry
Is There a Market For Your
Services?
 Who Will Be Your Patients?
 Who Are the Payors?

• Specific Insurances
In-Network
• Medicare
• Medicaid

Is My Overhead to High
Establishing a Sound Business Medical
Model
Resources
Question: How Do I Know What I Need to Get
Started?
•Ask Your Colleagues and Your Mentors
•Use Available Resources
•AAOS
(http://www3.aaos.org/member/prac_manag/prac_manage.cfm)
•AMA (http://www.ama-assn.org/ama/pub/physicianresources/solutions-managing-your-practice.shtml)
Establishing a Sound Business True
Business Model
Where to Start

Decide Where You Want to Live


Ignore Everything Else
Be Ready to Listen to Your Patients –
Customers

Nordstroms vs. K-Mart

Dictate in Front of Patients
• Seat Height




Participate in >1 Hospital ER


Never Be Held Hostage-BI North
Never Send to My Office


Out-Of-Network Insurance
Never Look at Someone Elses OR
Schedule-Worry About Yourself
Rarely If Ever Have Someone Cover For
You
I’ll Be Right In
Consider Being Both Academic and
Private Practice
Accepting
New
Patients
Establishing a Sound Business
True Business Model
Where to Start

Realize

There is Always Room for Another
Great Surgeon




Available






Available
Affable
Appropriate
24 hours/day
7 Days a Week
Be prepared to Miss School Functions
Be Prepared to Miss Family Birthdays
Be Prepared to Miss Parties
You Are a Physician!!!!!!!!!

Not a Stock Broker
• They Play for a Living
• You Practice for a Living!

Personal Sacrifice

Don’t Want it –That’s okay
• Hide in an HMO- 9-5 pm
Establishing a Sound Business Model
Private Practice
The Numbers

Budget-Design It


Indirect Expenses
Variable Expenses
• Direct Expenses


Obtain a Loan
Understand Your Cash Inflow


Office Visits
Surgical Procedures
• Are You an Orthopaedic Surgeon or an
Orthopaedist?

Ancillary Services-Beware of Stark
Laws
Establishing a Sound Business Model
Private Practice
In-Network vs. Out-of-Network

Out-of-Network



4 Times the Reimbursement
More Pro Bono Work
Common Myths

Can’t Do It In My Neighborhood
• Bronx NewYork

My Chairman Won’t Let Me
• Separate Tax ID Number

It is Doctor Driven
• Hospital
• Anesthesia

Emergency Room Visits-Love to Go
• By Law- Distal Radius $1500 vs.
$200
Paid By The Insurance Companies
Never Hurt the Patient
Establishing a Sound Business Model
Private Practice
In-Network vs. Out-of-Network

In-Network

EGO-Driven Doctor




Drop Plans When Financially Possible


9 Years
Periodic Evaluation



I Do 800 Cases a Year
• Are You Busy?
No• Actually I make 4x the Reimbusement and
Play Golf, Volunteer and See My Family .
• I Do 250 Cases a year and 25 Patients a Day
Instead of 50 in the Morning.
Are You Worth a 10 Dollar -25 Dollar Co-Pay?
Pare Out Slowly
Get a New Tax ID Number
It’s a Game –Be READY to PLAY

Everything is Negotionable
Establishing a Sound Business
Model
Marketing-Private Practice
Your Relationship With Your Patients IS Your
Business – Pay Attention to Them
 Establish a Relationship
With the Community

Participate
Little League Coach etc.
 School Functions


Meet Your Colleagues


Be Kind
Market Yourself
Don’t Offend Your Colleagues
 What is Your Niche′?

Establishing a Sound Business
Model
Marketing-Private Practice
Your Relationship With Your Patients IS Your
Business – Pay Attention to Them

Announce Your Arrival

Referrals Will Get You
Started-Insurance Books
• 1 Year-To Be Included

Don’t Expect Another
Pediatrician or Internist to
Refer to You
• Arthroscopic Rotator Cuff
vs.Open Repair
Establishing a Sound Business
Model
Marketing

Advertise

Individuals
Internet
 Show Your Face In
Offices/Hospital


Hospitals
Local Newspaper
 Regional Newspaper

• Branding
HSS-New York Times

Hospital Newsletters
Establishing a Sound Business
Model
Staff/Associates

Surround Yourself With
Quality People


Office Manager/Assistant
Billing Staff-Ethical





Always Dictate Your Own
Operative Report
Accountant
Insurance Agent(s)
Banker
I.T.
Spend a Lot More to Get Quality Help
Know the Laws! Never Break Them!
Establishing a Sound Business
Model
Keys to Success

Be Humble


Put Away Your Pride
Don’t Be Afraid to Work

Pound the Pavement

Lectures to
•
•
•
•

Publish Papers

Be an Authority


Private Practice Experience
Always Say “YES”


Senior Citizen Groups
Athletic Trainers
Physical Therapy Groups
Hospital Grand Rounds
Be Available
Avoid Being Cheap

Most Doctors Are!
Establishing a Sound Business Model
Classic Medical Model
Earn
Before
You
Spend!
Private Practice vs Hospital
Employment
How Much Do You Get

Arthroscopy Shoulder

Labral Repair



Rotator Cuff Repair



ACL


In
Out
Total Joint

Total Knee Replacement




In
Out
Arthroscopy Knee


In
Out
In
Out
Hospital
Trauma

ORIF Radius-Gallezzi


Surgeon
Hospital
Private Practice vs Hospital
Employment
How Much Do You Get

Arthroscopy Shoulder

Labral Repair



Rotator Cuff Repair



ACL


In-$1,081
Out-$8,000
Total Joint

Total Knee Replacement




In-$1200
Out-$9500
Arthroscopy Knee


In -$850
Out-$8,500
In-1,600
Out-10,000
Hospital 65K
Trauma

ORIF Radius-Gallezzi


Surgeon-$750.00
Hospital-39K
Private Practice vs Hospital
Employment
How Much Do You Get

Don’t Ever Apologize!

The Enemy
 The Insurance Company
• For Profit
• Stock Must Go up

The Hospital
• Re-imbursed almost double for
same procedure as a surgery
Center
Lobbies


Get Mad-Make a Difference
The public

Surverys of Educated College gradsNew York Times-Doctors are
underpaid
Establishing a Sound Business
Model
Classic Business Model
Spend and Invest In
Your Future
Wisely!
Stop Worrying!
Focus on Your
Patients!
© Copyright 2011 Plancher Orthopaedics & Sports Medicine PLLC
Thank You
If You Build It They Will Come!!!!
Did You Know!
• Being a hospital employee allows for involvement
in the capitation or ACO process
• You are the one bringing patient volume
• Orthopedics is the most lucrative surgical
subspecialty next to CV surgery reimbursements
• You bring in anywhere between 4 to 6 times your
salary net to the hospital
• Don’t ever forget to remind them of this fact !
• Don’t Apologize when Negotiating