Multispecialty groups make inroads in practice

April 7, 2010
Rebekah Moan

When Sutter Health Hospital in Sacramento, CA, recently terminated its contract with Radiology Associates of Sacramento, one of the largest and oldest practices in the U.S., the action sent shudders through elements of the radiology community.

When Sutter Health Hospital in Sacramento, CA, recently terminated its contract with Radiology Associates of Sacramento, one of the largest and oldest practices in the U.S., the action sent shudders through elements of the radiology community. Were multispecialty groups poised to play a bigger role in radiology practice? And would hospitals use them to gain more control over radiologists?

The answer to the first question is probably yes, by many accounts, because advantages in size and coordination of care are pushing the multispecialty practice phenomenon. Whether it will change the balance of power between hospitals and radiologists, however, remains an open question. One thing is clear: it will change the practice of radiology, some fear not for the better.

A multispecialty group is an organization in which physicians such as orthopedists, urologists, radiologists, and others all work under the same management. Multispecialty groups fall into two categories: they are tied to hospitals or they are not, according to Bryan Stiltz, president of Florida Physicians Medical Group in Orlando, and senior vice president of ambulatory care at Florida Hospital.

“The traditional multispecialty group is very private and has its own governance structure,” he said.

In the case of Sutter Health, in November the hospital called off talks with Radiological Associates of Sacramento, citing a desire for more compliance with Sutter's own approach to care. The contract was to expire March 31, and officials on both sides declined to talk to Diagnostic Imaging about specifics before then. It is known, however, that multispecialty Sutter Medical Group will create a radiology division and contract with Sutter Health.

The deal was brokered by Mark Martin, founder and president of Optima Imaging, a diagnostic imaging consulting company. Martin suggested a similar solution in 2008 when Florida Radiology Associates ended its agreement with Florida Hospital. Eventually Florida Radiology Associates went belly up and Radiology Specialists of Florida filled the void under the umbrella of Florida Physicians Medical Group. Approximately two thirds of the radiologists from Florida Radiology Associates joined Radiology Specialists of Florida.

When a radiology group decides to terminate its contract with a hospital-or vice versa-the hospital has only three options available: negotiate something with another radiology group to ensure coverage, contract with an independent staffing company, or form a new division, either within the hospital or within a multispecialty group, Martin said.

“What's the difference, if the structure continues to allow you to practice the quality of radiology that you desire to practice, if the patient comes from XYZ medical group as opposed to ABC radiology group?” Martin said. “Lots of radiologists have chosen to practice in structures other than a single-specialty radiology group for years.”

MULTISPECIALTY GROUP STRUCTURE

Like snowflakes, no two multispecialty groups are alike.

“If you've seen one instance, you've seen one instance,” Martin said.

However, there are similarities among groups.

The most common structure for a multispecialty group is one that mirrors academia, according to Ron Howrigon, president of Fulcrum Strategies, a healthcare consulting firm. There's a chair of radiology who sits on the board of directors or executive committee, just as in the academic world.

“The radiologists have a voice in what gets done but they don't have 100% of the voice,” he said.

At Florida Physicians Medical Group in Orlando, radiology is its own island. While Radiology Specialists of Florida is part of the multispecialty group, it manages itself, Stiltz said.

“Radiology Specialists of Florida is not hamstrung or hindered by the multispecialty group as it pertains to radiology,” he said. “I have divisions and they don't fight with each other for structure or governance or capital.”

When some people heard about the creation of Radiology Specialists in Florida, and then the switch in radiology services to Sutter Medical Group in Sacramento, they assumed the hospitals were the real employers.

But that isn't the case with Florida Physicians Medical Group, Stiltz said. The group is an independent entity, technically and legally. The hospital and the multispecialty group are two separate businesses.

“Florida Physicians Medical Group signs the paycheck. And that money comes from the work we do on professional reads at Florida Hospital. So we bill insurance companies and get reimbursed, [it's] no different than a traditional private group,” he said.

For payment, Radiology Specialists of Florida are salaried with a productivity bonus.

“It is salary-based plus bonus for the work you do. And work is broader than just volume. It's teaching, it's writing, it's committees, it's leadership,” he said.

In general, the salary and compensation in multispecialty groups depends on where the multispecialty group is located and the business's success, Howrigon said.

“I've seen multispecialty groups where the radiologists are making a lot more than the independent practice guys in a different market,” he said. “It's not so much structure-dependent as it is market-dependent.”

Florida Physicians Medical Group professionals do have the option to work with a hospital not in the Florida Hospital system.

“We could add on to what we're doing. There are no prohibitions in the agreement between Florida Physicians Medical Group and Florida Hospital that [say] we couldn't go pick up another hospital,” Stiltz said. “We don't have a heck of a lot of desire to do it, but there's nothing legally that says we couldn't.”

However, there is an exclusivity agreement between the two entities.

“We provide the professional component and they provide the equipment and space,” he said. “The hospital agrees not to have another radiology group and we agree to provide all the services that are necessary.”

WHAT IT'S LIKE?

Dr. James E. Hannah is one of the 32 radiologists who moved over to Radiology Specialists of Florida after Florida Radiology Associates ended its contract with Florida Hospital.

“Things are a lot better now because I am practicing my subspecialty, which is nuclear medicine,” said Hannah, chief of nuclear medicine at Radiology Specialists of Florida. “I am doing that most of the time.”

When he worked for Florida Radiology Associates, Hannah said, he had to do things he didn't enjoy and wasn't well-trained for, like mammography.

“The general philosophy was, everybody should learn to do everything, which, for the size and scope of our practice-48 people-was unrealistic,” he said. “Now the situation is much better in that the generalists are doing a lot of general stuff and the specialists are really focusing on their subspecialties.”

Other advantages to working in a multispecialty group include a more stable work schedule and no need to worry about the business aspect of a radiology practice.

“Our group had to spend a lot of time fighting the insurance companies for reimbursement and I don't have to worry about that now,” Hannah said. “It leaves us more time to practice medicine.”

The biggest difference Hannah said he perceives is the relationship with the hospital.

“The relationship with the hospital is so much better now. When you're a private practice, there's kind of an adversarial relationship with the hospital,” he said. “This is a much more relaxing and comfortable practicing situation because there's no conflict between the radiologist and the administration. And the service provided to the hospital, the referring physicians, and the patients is much better than it was before.”

“I have no complaints. It's so much better than the old way,” Hannah said.

Hannah is not the only one who spoke highly of a multispecialty group, and, more specifically, of a multispecialty group's integrated care structure.

A multispecialty group is uniquely positioned to offer a team-oriented approach to patient care, said Dr. Patrick Browning, former partner at Redwood Regional Medical Group in Santa Rosa, CA, and current chief of medical imaging at Sutter Medical Group in Sacramento.

For instance, if a patient comes in and something abnormal in the heart is picked up during screening, or the patient experiences symptoms that prompt the visit to a doctor, the radiologist can conduct noninvasive angiographic imaging using CT or MRI, Browning said. Once the diagnosis is made, the vascular surgeons and the interventional radiologists work together to figure out the best next step for the patient.

“Now there's no conflict between surgeons and radiologists,” Browning said. “They're not trying to compete for the patient's care anymore; they're co-operatively working for the patient.”

The interventionalists and vascular surgeons look at diagnostic angiograms and make a team decision. If the vascular surgeon suggests a stent, the interventional radiologist will put it in. Or, if the interventional radiologist suggests a bypass, the vascular surgeon will perform the procedure.

“I think the patient feels much more confident that the final decision is the best one,” Browning said.

PITFALLS

While some radiologists sing the praises of a multispecialty group, others caution against joining such a group, citing loss of autonomy, loss of income, and loss of opportunity for innovation.

“Typically in multispecialty group practices the incomes for higher paid specialties are tamped down and the incomes for the lower paid specialties are subsidized,” said Dr. James Thrall, chair of the American College of Radiology board of chancellors and radiologist-in-chief at Massachusetts General Hospital. “My guess would be that in at least a substantial fraction of group practices there is a blunting of incomes.”

Another money issue most people don't consider is retirement funds. Some multispecialty groups historically use defined benefit plans rather than 401K or 403b plans. These plans tend to lock in their members, Thrall said.

Defined benefit plans are akin to what autoworkers have: the older a person gets, the more money has gone into the plan. If a worker leaves the job early, there are big penalties and money is lost.

“The last years [bring] an exponential increase in the benefit,” Thrall said. “It tends to tether people to their jobs if they stay too long.”

Some radiologists are also concerned that members of multispecialty groups are less motivated because the radiologist gets paid no matter what. If a patient needs a colonoscopy, the incentive may not be there for the radiologist or the gastroenterologist to do it, said Dr. Mark Klein, a radiologist at Washington Radiology Associates in the District of Columbia.

“They're going to get paid the same whether they do the colonoscopy or not. So it becomes an inverse turf war,” he said.

The physicians lose their capitalistic mentality, the idea if they work harder, they'll do better, Klein said.

“If you're in this situation where it doesn't matter whether you work harder or not-you're getting paid the same-you're likely to see lower innovation,” he said. “So in terms of patient care the flip side is, why bother to learn a new technique when you're not going to get much out of it?”

Loss of autonomy is another concern voiced by many radiologists. In a multispecialty group, someone else is making the decisions about what imaging equipment to buy, for instance, and that person may not even be a radiologist.

“American doctors are pretty independent people,” Thrall said. “One of the hallmarks of being a physician is that you have to have confidence to make a life or death decision on behalf of someone else. This engenders self-confidence and independence in a lot of American physicians that doesn't really mesh well with the subordinating nature of a multispecialty group.”

About 80% of radiologists work in independent practices, which speaks to their personal preferences and desire to be independent, Thrall said.

THE WAVE OF THE FUTURE?

That the majority of radiologists work in independent private practices, however, may not be the case for much longer, according to Klein.

“Joining a multispecialty group will probably be an interim step in the process of becoming part of a large medical/industrial complex because that makes the most sense, that's what the government wants,” Klein said.

Multispecialty groups will get bigger and bigger until they turn into giant organizations, according to Klein.

“When you have 10 million people under one roof, or in one pen, it's hard for anyone to complain too much,” Klein said. “You can dictate what people are to do.”

The U.S. is moving in the direction of giant health organizations already because the government can dictate what to do and can control costs. The creation of healthcare conglomerates is inevitable, he said.

“Once you get hooked up in that multispecialty group, then that multispecialty group will also be under its own economic competitive issues and will probably move on to join larger and larger organizations,” Klein said. “I think the Kaiser model is probably what you're going to see expand.”

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