2 Disclosures Updated Sept 2012 The following relationships exist:Item 1 Royalties from a company or supplier:No Conflict ReportedItem 2 Speakers bureau/paid presentations for a company or supplier:LinvatecItem 3A Paid employee for a company or supplier:Item 3B Paid consultant for a company or supplier:Item 3C Unpaid consultant for a company or supplier:MerckItem 4 Stock or stock options in a company or supplier:Item 5 Research support from a company or supplier as a PI:Item 6 Other financial or material support from a company or supplier:Item 7 Royalties, financial or material support from publishers:Saunders/Mosby-Elsevier; ThiemeItem 8 Medical/Orthopaedic publications editorial/governing board:American Journal of Orthopedics,Techniques in Sports MedicineItem 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 MedicineThis talk took 34 minutes2
3 Personal Disclosure Career Highlights Medical SchoolGeorgetownResidencyHarvard Combined ProgramHenry Mankin/Clement Sledge/John HallFellowshipsHand-Indiana Hand CenterJim StricklandShoulder /Knee Sports MedicineRichard Hawkins/Richard SteadmanFull Time FacultyMontefiore Medical Center/Albert Einstein College of MedicinePrivate PracticeAcademic Model4 Partners2 ACGME Sport Medicine Fellows6 Station Cadaver Lab- Located 1 Floor Above Clinical OfficeNot For Profit- 501 C 3
4 Private Practice vs Hospital Employed Topics Covered Common GroundMalpracticeStaying SoloEmotional AdvantagesHospital EmployedEmotional Disadvantages For YouFinancial Pro/ConsAdvantages From the Hospital PerspectiveSwitching PracticesHospital TrapsNegotating Contracts/ Did You Know?CodingStarting A Private PracticeIn-Network/Out of Network
5 Private Practice Vs Hospital Employment First Job-The Facebook Era Ask The Correct Question!!!!Which Job will Give Me the Right MentorKnowledge is GoodExperience is LimitedJudgement is Still YoungThe First Time For Doing an OperationSomething New EverydayThe Correct ProgramWatches You GrowPro HospitalGood ChairmanCon HospitalMake quotas for Set SalaryPro Private PracticeGreat Senior PartnersCon Private PracticePressure to Compete and Be Accepted
6 Private Practice Vs Hospital Employment 15 Years Into Practice Ask The Correct Question!!!!Which Job will Continue to Let Me GrowKnowledge is GoodExperience is GoodJudgement is GoodThe Kids Are in SchoolIs Medicine Safe For MeI Don’t Like to Take RisksThe Younger PartnersThey Don’t Have the Same Work EthicThey Don’t Want to Take Any CallThe Older PartnersThey Aren’t Around As MuchPro HospitalSeems Easy- Just Show Up and Go HomeCon HospitalWhat Do I do with All My PatientsWill They Follow My PracticePro Private PracticeNo Change- I Know the DrillCon Private PracticePressure to CompeteWorking Longer Hours and Less Pay
7 Private Practice Vs Hospital Employment 10 Years From Retirement Ask The Correct Question!!!!Which Job will to Let Me RetireKnowledge is ExcellentExperience is ExcellentJudgement is ExcellentThe Kids Are Out of SchoolI Want to Travel More / I Put in My DuesDownsizing the House/ Less CostsThe Younger PartnersThey Don’t Have ExperienceLiability with All Their ComplicationsThe Older PartnersI am it!!/ I Want My Buy Out!Pro HospitalSeems Like Easy MoneyDo Clinic and Just Show UpGreat Vacation TimeCon HospitalNone/ I am Done in a Few Years/ Why Not?Pro Private PracticeI am the Boss FinallyCon Private PracticeCosts are way upMy Take home is So Much Less
8 Private Practice vs Hospital Employment What is Common –Success is Easy AvailablityYes –Always!Non-Displaced Radial Head FractureNever Send to the OfficeGrandma’s Pubic RamusAffabilityDifficult These DaysAdministratorsNurse ManagersColleaguesPlaying in the SandboxAbilityCutting Edge KnowledgeCommunity GuyPopular-Knowles PinsYou Know Better-A Problem
9 Orthopedic Surgeon Practice Setting: 9,400 Returned Practice Surveys Type of Practice % ChangePriv. Practice-Solo % % ↓ 19%Priv. Practice-Group 50.6% % ↓ 8.3%Total Private Practice Groups & Solo = 65.2%Priv. Pract.-Multi sp. 7.3% % ↑ 12.3%Academic Practice % % ↑ 1.2%Hospital Employed % % ↑ 76%AAOS NOW, December , 2009
10 Recent Trends in Practice Setting Source AAOS Survey 2011 2004200620082010% ChangeSolo-Private25.8%24%20.9%18.5%28.2%Group-Private50.6%48%46.4%45.3%10.5%Multi Specialty7.0%8.3%9.0%28.6%Academic1%2%6.7%3.6%>200%Hospital Employment8.1%>300%AAOS ,Health Systems Committee:, 20111010
11 Private Practice vs Hospital Employed Where to Start/ All Jobs-Patients Hospital Based-PatientsCon-Minimal RelationshipsPro-Minimal RelationshipsExpectations LowPA/ ResidentMiddle of the NightPrivate Practice-PatientsPro- Strong RelationshipsCon- High ExpectationsAlways AvailableCall Schedule Doesn’t matterCan’t Drink at a restaurant
12 Private Practice vs Hospital Employed Malpractice Pro-Hospital BasedDon’t have to worry about itPaid for but……Con-Hospital BasedIf you leave…? TailDo Have to worry about TypeOccurrence vs Claims MadePro-Private PracticeSelect the Type You WantDecision About LawyersYour DecisionCon-Private PracticeCost is highGames-New York StateBerkshire Hathaway
13 Private Practice vs Hospital Employed Advantages of Staying Solo You are Your Own Boss.. PRICELESS!Spend all Those Years to Become an MDHospital BasedAutomomy LostHire and FireWhomever You WantWithout Asking Anybody!!Come and Go As You Like!!
14 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!
15 Private Practice vs Hospital Employed Advantages of Hospital Employed Employee or Business issuesNo ConcernsNo Overhead ExpensesStable IncomeFor the Time Being –Steady PaycheckBased Upon the Local Private Practitioners IncomesMGMA National Data.Automatic Referral PatternsForced by CEOArtificially BusyLarge Patient BaseNot YoursAbility to Encourage Hospital to Develop a Subspecialty Orthopedic DepartmentACOAutomatically Included
16 Private Practice vs Hospital Employed Advantages of Hospital Employed Employee benefits401KPensionHolidaysTime OffReimbursementContracts with PayorsNo WorriesMalpracticeNo Costs To YouIndirectly Effects Paycheck
17 Private Practice vs Hospital Employed Disadvantages Hospital Employed Employee benefitsNo SayWhen or If They ChangeLarge Patient BasePayor MixMedicaidLimited Salary PotentialAncillary RevenueNo Ability to ShareNon-CompeteEnforceable50 Mile RadiusControl of EmployeesNoneYour ReputationAAOS NOW, 5/2012
18 Private Practice vs Hospital Employed Potential Disadvantages Hospital Employed Decision MakingBureaucracyMeeting Time-LengthyTerminationWithout CauseForced Retirement AgeContract LengthShort3-5Years on AverageCall ScheduleIndentured ServantNever GraduatingRigid CallScheduleKaiserOrthopedicsAdministration Does Not Understand How Orthopedics Differs From Other SpecialtiesAAOS NOW, 5/2012
19 Private Practice vs Hospital Employed Advantages to the Hospital for Orthopedist Employment Revenue Generator-HUGEAncillary Service Revenue Generator-HugeEstimated Between $2.3 to 2.4 Million/MDIn “Rural Exception Hospital” SystemEven Larger than HugeControl the Orthopedic MarketplaceWithin the CommunityComplete Loss of Autonomy
20 Virtually, NO DOWNSIDE to Hospital Administration Private Practice vs Hospital Employed Advantages to the Hospital for Orthopedist EmploymentVirtually, NO DOWNSIDE to Hospital AdministrationGenerating 4 to 6 Times Your SalaryBut Tremendous Negotiating AbilityProductivity bonusesAdd Ancillary StaffHelp You Generate More IncomePA-C, NP’s, Administrative etc.Vacation timePA-C’s Run Clinics for YouSalary AdjustmentDemand Productivity Based Not RVU
21 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
23 Private Practice vs Hospital Employed Reasons for Leaving Private Practice Decrease In ReimbursementsDifficulty in Practice ManagementAncillariesPhysical Therapy, MRI etc.Difficulty in MarketingMatch competition From HospitalsIncrease In Malpractice Insurance Premiums120K at 10 Years Claim MadePrivate Practionner NYCUnwillingness to Provide Uncompensated CareIndentured SlaveryLifestyle IssuesWork/Home Balance
24 Private Practice vs Hospital Employed Being Flexible Why Be FlexibleHe Thinks He Has a ProblemOften We as Physicians Think We Have a Problem With Our JobThink TwiceDoes He Have a Problem –NODo You Have a Problem??????24
25 Private Practice vs Hospital Employed Hospital Traps-Contracts Beware of Non CompetesCarve Out Practices to Stay in Town When Terminated50 mile radiusAvoid Claw Back ClausesSalary That Is ReturnedWhen Productivity RVU Goals Are Not MaintainedRemember The Hospital Does The CollectionsNo Incentive to collect or appealNeed A Health Care AttorneyLanguage is Too ComplicatedProduction Formullas
26 Private Practice vs Hospital Employed Hospital Negotiations-Contracts Revenue-Know Your WorthKnow How Much You Earn The HMO /HospitalUse As leverage:Higher SalaryMore Clinic StaffSurgeryObtain 2 OR RoomsOnce or Twice/ weekAncillary Help1 or 2 PA’s In ClinicImprove Your Efficiency“Quality of Life”Obtain an Administrative AssistantPA-C’s -1st call
27 Private Practice vs Hospital Employed Hospital Traps-Olympic Time Demand a Long Term Contract10 Year MinimumTermination Without CauseRemove From ContractIf Making Too Much MoneyMust be Paid on a Productivity BasisLearn How to Say No!!!!!!!To AdministratorsTo LawyersTo Nurses PolitelyTo PatientsEarn RespectYou Sacrificed All Your Years of TrainingWall Street Boys Start at Age 23You Start in your Mid 30’sStop Worrying!!!!!!!
28 Private Practice vs Hospital Employed Hospital Contracts: Define Outside Activities Exclude From Hospital OwnershipIME’sDepositionsMedical Record ReviewsPaid Quality Assurance RolesInsurersAny Paid AgreementsImplant companies,Clinical advisor feesConsultant FeesSpeaking FeesRoyalties
29 Private Practice vs Hospital Employed Private Practice Traps Formula Must Favor ProductivityNo Equal SplitNo 25% or 50% SplitThe Higher of Which Always Favors The Lower Producer.Termination Without CauseAs You Age / Not Liked-The Group Wants to Get Rid of YouRequire 100% Partner AgreementLength to PartnershipBuy in For Ancillary ServicesEasy in- Easy outMinimal Buy In and Minimal Buy Out to an Exiting PartnerAvoid Owing Alot of Money to an Older Partner On Retirement
30 Private Practice vs Hospital Employed Contracts Private Practice or Groups New Laws-Practice Without Walls Band TogetherJoin Other Soloists or Small GroupsForm a Larger GroupUse the Umbrella Merger ConceptAttractiveLocal Hospital SystemACO’sWill Be In Need of Orthopedic CoverageAvoidFragmented SystemMay Entice the HospitalHire Their Own Department
31 Private Practice vs Hospital Employed Coding Its Essential-CodingLearn it in your Residency or FellowshipIt’s a GameIts BusinessNo EmotionConsider Pro bono WorkHospital BasedKeep Track of Your BillingsLost Control of AppealsWays to Get Rid of a DoctorEncourage Monthly ReportsGo to National CoursesLearn How to Code
32 Private Practice vs Hospital Employment Treading Lightly The Other Side of the ClassroomTreat Others WellOperating Room Environmental ServiceReceptionistsBoston vs. Indiana vs New YorkTake a Deep BreathTwo Ears, One MouthEven When You Are RightSenior PartnersTeam PlayerEven when Equipment is OutdatedTaking A StandBe Ready for NoBe Ready to stand strong and walk outWall Street StyleAthletic TrainersBe Aware They Run the Show
33 Private Practice vs Hospital Employment Advice-Never Tread Lightly Patient AdvocateIts You Against the WorldIt Will Secure Your Practice For LifeSit Down in an Exam RoomDictate in the Room Never the HallwayThey hear you !!!!!Physicians are FickleSend Referral LettersHospital BasedForced to Refer to YouPrivate PracticeReferrals to Good GuysNot necessarily Best TrainedFocus on Patient to Patient
35 Have I Convinced You to Think Twice About Hospital Employment? Caught Your Attention?Have I Convinced You to Think Twice About Hospital Employment?Lets Look at Private Practice3535
36 Establishing a Sound Business Classic Medical Model Where to Start-Private Practice Know Your NeighborhoodWorryIs There a Market For Your Services?Who Will Be Your Patients?Who Are the Payors?Specific InsurancesIn-NetworkMedicareMedicaidIs My Overhead to High
37 Establishing a Sound Business Medical Model Resources Question: How Do I Know What I Need to Get Started?Ask Your Colleagues and Your MentorsUse Available ResourcesAAOS (AMA ( resources/solutions-managing-your-practice.shtml)
38 Establishing a Sound Business True Business Model Where to Start Decide Where You Want to LiveIgnore Everything ElseBe Ready to Listen to Your Patients –CustomersNordstroms vs. K-MartDictate in Front of PatientsSeat HeightOut-Of-Network InsuranceNever Look at Someone Elses OR Schedule-Worry About YourselfRarely If Ever Have Someone Cover For YouParticipate in >1 Hospital ERNever Be Held Hostage-BI NorthNever Send to My OfficeI’ll Be Right InConsider Being Both Academic and Private PracticeAccepting New Patients
39 Establishing a Sound Business True Business Model Where to Start RealizeThere is Always Room for Another Great SurgeonAvailableAffableAppropriate24 hours/day7 Days a WeekBe prepared to Miss School FunctionsBe Prepared to Miss Family BirthdaysBe Prepared to Miss PartiesYou Are a Physician!!!!!!!!!Not a Stock BrokerThey Play for a LivingYou Practice for a Living!Personal SacrificeDon’t Want it –That’s okayHide in an HMO- 9-5 pm
40 Establishing a Sound Business Model Private Practice The Numbers Budget-Design ItIndirect ExpensesVariable ExpensesDirect ExpensesObtain a LoanUnderstand Your Cash InflowOffice VisitsSurgical ProceduresAre You an Orthopaedic Surgeon or an Orthopaedist?Ancillary Services-Beware of Stark Laws
41 Establishing a Sound Business Model Private Practice In-Network vs Establishing a Sound Business Model Private Practice In-Network vs. Out-of-NetworkOut-of-Network4 Times the ReimbursementMore Pro Bono WorkCommon MythsCan’t Do It In My NeighborhoodBronx NewYorkMy Chairman Won’t Let MeSeparate Tax ID NumberIt is Doctor DrivenHospitalAnesthesiaEmergency Room Visits-Love to GoBy Law- Distal Radius $1500 vs. $200Paid By The Insurance CompaniesNever Hurt the PatientIn-NetworkOut-of-Network
42 Establishing a Sound Business Model Private Practice In-Network vs Establishing a Sound Business Model Private Practice In-Network vs. Out-of-NetworkIn-NetworkEGO-Driven DoctorI Do 800 Cases a YearAre 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?Drop Plans When Financially Possible9 YearsPeriodic EvaluationPare Out SlowlyGet a New Tax ID NumberIt’s a Game –Be READY to PLAYEverything is NegotionableIn-NetworkOut-of-Network
43 Establishing a Sound Business Model Marketing-Private Practice Your Relationship With Your Patients IS Your Business – Pay Attention to ThemEstablish a Relationship With the CommunityParticipateLittle League Coach etc.School FunctionsMeet Your ColleaguesBe KindMarket YourselfDon’t Offend Your ColleaguesWhat is Your Niche′?
44 Establishing a Sound Business Model Marketing-Private Practice Your Relationship With Your Patients IS Your Business – Pay Attention to ThemAnnounce Your ArrivalReferrals Will Get You Started-Insurance Books1 Year-To Be IncludedDon’t Expect Another Pediatrician or Internist to Refer to YouArthroscopic Rotator Cuff vs.Open Repair
45 Establishing a Sound Business Model Marketing AdvertiseIndividualsInternetShow Your Face In Offices/HospitalHospitalsLocal NewspaperRegional NewspaperBrandingHSS-New York TimesHospital Newsletters
46 Establishing a Sound Business Model Staff/Associates Surround Yourself With Quality PeopleOffice Manager/AssistantBilling Staff-EthicalAlways Dictate Your Own Operative ReportAccountantInsurance Agent(s)BankerI.T.Spend a Lot More to Get Quality HelpKnow the Laws! Never Break Them!
47 Establishing a Sound Business Model Keys to Success Be HumblePut Away Your PrideDon’t Be Afraid to WorkPound the PavementLectures toSenior Citizen GroupsAthletic TrainersPhysical Therapy GroupsHospital Grand RoundsPublish PapersBe an AuthorityPrivate Practice ExperienceAlways Say “YES”Be AvailableAvoid Being CheapMost Doctors Are!
48 Establishing a Sound Business Model Classic Medical Model EarnBeforeYouSpend!
49 Private Practice vs Hospital Employment How Much Do You Get Arthroscopy ShoulderLabral RepairInOutRotator Cuff RepairArthroscopy KneeACLTotal JointTotal Knee ReplacementHospitalTraumaORIF Radius-GallezziSurgeon
50 Private Practice vs Hospital Employment How Much Do You Get Arthroscopy ShoulderLabral RepairIn -$850Out-$8,500Rotator Cuff RepairIn-$1200Out-$9500Arthroscopy KneeACLIn-$1,081Out-$8,000Total JointTotal Knee ReplacementIn-1,600Out-10,000Hospital 65KTraumaORIF Radius-GallezziSurgeon-$750.00Hospital-39K
51 Private Practice vs Hospital Employment How Much Do You Get Don’t Ever Apologize!The EnemyThe Insurance CompanyFor ProfitStock Must Go upThe HospitalRe-imbursed almost double for same procedure as a surgery CenterLobbiesGet Mad-Make a DifferenceThe publicSurverys of Educated College grads- New York Times-Doctors are underpaid
52 Establishing a Sound Business Model Classic Business Model Spend and Invest In Your Future Wisely!Stop Worrying!Focus on Your Patients!
55 Did You Know!Being a hospital employee allows for involvement in the capitation or ACO processYou are the one bringing patient volumeOrthopedics is the most lucrative surgical subspecialty next to CV surgery reimbursementsYou bring in anywhere between 4 to 6 times your salary net to the hospitalDon’t ever forget to remind them of this fact !Don’t Apologize when Negotiating5555