In these challenging days of surviving private vascular practice, I’m sure we’re all considering our options. With rising overheads and reimbursement cuts, considering a joint venture can be an attractive option to share costs and expand growth potential. There are different options for such a partnership, and I’ll do my best to outline the pros and cons as we have experienced them.
The first option is joint venturing with a local hospital system. In our area, we have a medium-sized nonprofit hospital system that has an almost exclusive network of both primary care providers and specialists. I was a part of this system as an employed physician for several years, and, when my partner and I decided more than eight years ago to leave employment, we approached the administration with the idea of joint venturing. At the time, moving our peripheral arteriograms and dialysis work to outpatient made complete sense, as we were routinely neglected by the hospital cath lab in terms of scheduling priorities. Our patients were always at the end of the line of any “emergent” cardiac cath, which often seemed to us to appear out of the blue depending on the cardiologists working that day and their preferences. It was very unfair to our patients, not to mention a constant source of frustration for us. We felt that there was no support to grow our practice, without appropriate resources to schedule our arteriograms.
Unfortunately, despite what we felt to be a well-thought-out proposal of the benefits both to quality of patient care and reimbursements for forming an outpatient vascular lab, the hospital was not interested in joint venturing with physicians at the time of our decision to leave. Even though this was not our course, I would still encourage considering a hospital partnership as a viable option. It takes some forward thinking on the part of your executive leadership, but there is no reason why both the hospital and your group cannot be profitable in such an arrangement. It can be hard to get them to see past your worth in relative value units (RVUs), but learning your value is instrumental in these negotiations. You get the advantage of their insurance contracts, purchasing agreements, and employee benefits (including malpractice coverage), while having more ownership of your office/ treatment facility. This allows you to better control your schedule and the customer service you provide to your patients. In addition, most hospitals (ours included) employ a large network of providers who will support your practice if you are in such a partnership, as opposed to being “the enemy.”
The next model to consider is joint venturing with an industry partner. These days, there are large insurance companies and other medical entities partnering with providers in outpatient cardiovascular centers. Our practice explored this option as it seemed our best way outside of hospital partnership to fund an ambulatory surgery center (ASC). Since we are a combined cardiology and vascular surgery practice, we were particularly interested in potentially shifting some electrophysiology (EP) services outpatient, as well as our surgical dialysis cases. We certainly liked the notion of sharing the build-out costs to convert our office-based vascular lab into an ASC, along with the ability to of a large partner to oversee all the regulatory and accreditation requirements. However, in our experience the goals we had for expansion were not realized as dealing with a large corporate entity often leads to frustrating inefficiencies and loss of control of overhead and cash flow.
Currently, we are back in private practice as a three-owner group. The pros continue to be autonomy in clinical decision-making, with full control over caseloads and patient care standards. Our revenue is not diluted through profit-sharing or institutional overhead. We have been able to adjust our service line based on market demands, most recently scaling our wound care clinic to meet our community needs. We are also able to optimize tax strategies and control our real estate investment since we own our space. The fears that we had in our first few years about being too vulnerable to hospital-owned primary care networks have not been realized. Yes, it seems we are in a constant battle to reassure patients in the community that we are, in fact, in-network and that they, as the consumers, have the choice of their doctor, whether employed or private. But thankfully our community continues to grow, and as long as we continue to offer quality care in a cost-effective, patient-centered environment, it seems that there is hope of survival after all.
Jennifer Thomas, MD, is a private-practice vascular surgeon in Anderson, South Carolina.
