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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 Plancher Orthopaedics & Sports Medicine PLLC
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Disclosures 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: Item 3B Paid consultant for a company or supplier: Item 3C Unpaid consultant for a company or supplier: Merck Item 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; 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 This talk took 34 minutes 2
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Personal Disclosure Career Highlights
Medical School Georgetown Residency Harvard Combined Program Henry Mankin/Clement Sledge/John Hall Fellowships Hand-Indiana Hand Center Jim Strickland Shoulder /Knee Sports Medicine Richard Hawkins/Richard Steadman Full Time Faculty Montefiore Medical Center/Albert Einstein College of Medicine Private Practice 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
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Private Practice vs Hospital Employed Topics Covered
Common Ground Malpractice Staying Solo Emotional Advantages Hospital Employed Emotional Disadvantages For You Financial Pro/Cons Advantages From the Hospital Perspective Switching Practices Hospital Traps Negotating Contracts/ Did You Know? Coding Starting A Private Practice In-Network/Out of Network
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Private Practice Vs Hospital Employment First Job-The Facebook Era
Ask The Correct Question!!!! Which Job will Give Me the Right Mentor Knowledge is Good Experience is Limited Judgement is Still Young The First Time For Doing an Operation Something New Everyday The Correct Program Watches You Grow Pro Hospital Good Chairman Con Hospital Make quotas for Set Salary Pro Private Practice Great Senior Partners Con Private Practice Pressure to Compete and Be Accepted
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Private Practice Vs Hospital Employment 15 Years Into Practice
Ask The Correct Question!!!! Which Job will Continue to Let Me Grow Knowledge is Good Experience is Good Judgement is Good The Kids Are in School Is Medicine Safe For Me I Don’t Like to Take Risks The Younger Partners They Don’t Have the Same Work Ethic They Don’t Want to Take Any Call The Older Partners They Aren’t Around As Much Pro Hospital Seems Easy- Just Show Up and Go Home Con Hospital What Do I do with All My Patients Will They Follow My Practice Pro Private Practice No Change- I Know the Drill Con Private Practice Pressure to Compete Working Longer Hours and Less Pay
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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
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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
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Orthopedic Surgeon Practice Setting: 9,400 Returned Practice Surveys
Type of Practice % Change Priv. 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
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Recent Trends in Practice Setting Source AAOS Survey 2011
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% 8.3% 9.0% 28.6% Academic 1% 2% 6.7% 3.6% >200% Hospital Employment 8.1% >300% AAOS ,Health Systems Committee:, 2011 10 10
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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
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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 Occurrence vs Claims Made Pro-Private Practice Select the Type You Want Decision About Lawyers Your Decision Con-Private Practice Cost is high Games-New York State Berkshire Hathaway
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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!!
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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!
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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
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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
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Private Practice vs Hospital Employed Disadvantages Hospital Employed
Employee benefits No Say When or If They Change Large Patient Base Payor Mix Medicaid Limited Salary Potential Ancillary Revenue No Ability to Share Non-Compete Enforceable 50 Mile Radius Control of Employees None Your Reputation AAOS NOW, 5/2012
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Private Practice vs Hospital Employed Potential Disadvantages Hospital Employed
Decision Making Bureaucracy Meeting Time-Lengthy Termination 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
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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
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Virtually, NO DOWNSIDE to Hospital Administration
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
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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
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Schizophrenia Private Practice Employed Physician ↑ Stress
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Private Practice vs Hospital Employed Reasons for Leaving Private Practice
Decrease In Reimbursements Difficulty in Practice Management Ancillaries Physical Therapy, MRI etc. Difficulty in Marketing Match competition From Hospitals Increase In Malpractice Insurance Premiums 120K at 10 Years Claim Made Private Practionner NYC Unwillingness to Provide Uncompensated Care Indentured Slavery Lifestyle Issues Work/Home Balance
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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?????? 24
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Private Practice vs Hospital Employed Hospital Traps-Contracts
Beware of Non Competes Carve Out Practices to Stay in Town When Terminated 50 mile radius Avoid Claw Back Clauses Salary That Is Returned 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
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Private Practice vs Hospital Employed Hospital Negotiations-Contracts
Revenue-Know Your Worth Know How Much You Earn The HMO /Hospital Use As leverage: Higher Salary More Clinic Staff Surgery Obtain 2 OR Rooms 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
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Private Practice vs Hospital Employed Hospital Traps-Olympic Time
Demand a Long Term Contract 10 Year Minimum Termination Without Cause Remove From Contract If Making Too Much Money Must be Paid on a Productivity Basis 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 You Start in your Mid 30’s Stop Worrying!!!!!!!
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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
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Private Practice vs Hospital Employed Private Practice Traps
Formula Must Favor Productivity No Equal Split No 25% or 50% Split The Higher of Which Always Favors The Lower Producer. Termination Without Cause As You Age / Not Liked- 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
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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
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Private Practice vs Hospital Employed Coding
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
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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
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Private Practice vs Hospital Employment Advice-Never Tread Lightly
Patient Advocate Its You Against the World It Will Secure Your Practice For Life Sit Down in an Exam Room Dictate in the Room Never the Hallway 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
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Any Conclusions? (Too Early-Hold On)
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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 Practice 35 35
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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
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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 ( AMA ( resources/solutions-managing-your-practice.shtml)
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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 Out-Of-Network Insurance Never Look at Someone Elses OR Schedule-Worry About Yourself Rarely If Ever Have Someone Cover For You Participate in >1 Hospital ER Never Be Held Hostage-BI North Never Send to My Office I’ll Be Right In Consider Being Both Academic and Private Practice Accepting New Patients
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Establishing a Sound Business True Business Model Where to Start
Realize There is Always Room for Another Great Surgeon 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
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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
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Establishing a Sound Business Model Private Practice In-Network vs
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 In-Network Out-of-Network
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Establishing a Sound Business Model Private Practice In-Network vs
Establishing a Sound Business Model Private Practice In-Network vs. Out-of-Network In-Network EGO-Driven Doctor 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? Drop Plans When Financially Possible 9 Years Periodic Evaluation Pare Out Slowly Get a New Tax ID Number It’s a Game –Be READY to PLAY Everything is Negotionable In-Network Out-of-Network
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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′?
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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
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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
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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!
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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 Senior Citizen Groups Athletic Trainers Physical Therapy Groups Hospital Grand Rounds Publish Papers Be an Authority Private Practice Experience Always Say “YES” Be Available Avoid Being Cheap Most Doctors Are!
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Establishing a Sound Business Model Classic Medical Model
Earn Before You Spend!
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Private Practice vs Hospital Employment How Much Do You Get
Arthroscopy Shoulder Labral Repair In Out Rotator Cuff Repair Arthroscopy Knee ACL Total Joint Total Knee Replacement Hospital Trauma ORIF Radius-Gallezzi Surgeon
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Private Practice vs Hospital Employment How Much Do You Get
Arthroscopy Shoulder Labral Repair In -$850 Out-$8,500 Rotator Cuff Repair In-$1200 Out-$9500 Arthroscopy Knee ACL In-$1,081 Out-$8,000 Total Joint Total Knee Replacement In-1,600 Out-10,000 Hospital 65K Trauma ORIF Radius-Gallezzi Surgeon-$750.00 Hospital-39K
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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 grads- New York Times-Doctors are underpaid
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Establishing a Sound Business Model Classic Business Model
Spend and Invest In Your Future Wisely! Stop Worrying! Focus on Your Patients!
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Thank You If You Build It They Will Come!!!!
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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 55 55
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