Practice Infrastructure

Various quality and performance initiatives are being implemented by health plans and payers that will link payment to documenting and reporting patient outcomes data. For example, the Tax Relief and Health Care Act of 2006 established a Physician Quality Reporting Initiative (PQRI), which increases payments by 1.5% to physicians who report information on specific quality measures to Centers for Medicare and Medicaid (CMS). PQRI now is termed the Physician Quality Reporting System (PQRS). Similarly, private health plans and large purchasers of health care are linking physician payment to pay-for-performance (P4P) measures. Gastroenterology practices need robust health information technology (HIT) or electronic medical records (EMR) to collect, track, and submit patient data and outcomes to receive the bonuses for PQRS and P4P measures. In the future, practices will be financially penalized for not reporting quality data. The adoption of HIT/EMR is expensive and would generally be beyond the reach of many solo and small practices. Generally, a large group is in a better financial position to raise the capital to acquire and deploy HIT. In addition, the economies of scale allow funding and development of ancillary service lines (eg, infusion centers, ambulatory endoscopy centers, pharmacy, and pathology) that can produce additional revenue streams to the large practice. A detailed discussion on the development of infusion services has been provided by Ancowitz and Shah.

Negotiating Leverage

The ability of a large group to gain leverage in negotiating reimbursement has been the main reason cited for joining or creating a large practice group. With mergers and consolidation in payers and hospitals, small practices and solo practitioners are at a disadvantage when negotiating with these large entities. For example, by 2003, the 3 largest insurance plans in 47 of the 50 states controlled more than 50% of the patient enrollment in those states. Large practices with their negotiating leverage may be necessary to minimize the continued decline in reimbursement offered by payers. For example, in a study of large multispecialty physician practices in California, the more concentrated physician markets were able to charge higher prices to health plans because of their market power. In addition, the negotiating leverage can lead to discounts in the cost of office infrastructure (eg, EMR, computers, and supplies).

Quality

All physicians desire to practice high-quality medicine; however, the Institute of Medicine reports a quality gap attributed to the growing complexity of science and technology, the increase in chronic conditions, a poorly organized delivery system, and constraints in the use of information technology. In order to practice high-quality medicine and gain peer and patient recognition, gastroenterology practices need to identify and disseminate best practices while measuring patient outcomes and satisfaction against validated benchmarks. Endoscopic quality measures have been proposed. Participation in a clinical registry that seamlessly integrates into HIT/EMR (eg, American Gastroenterological Association [AGA] Digestive Health Outcomes Registry) can allow practices to perform continuous quality improvement to reach desired benchmark levels. In addition, large practices often have thought leaders or experts within the group who can assist in developing clinical decision support and critical pathways that are supported by guidelines. Effective implementation of these clinical tools is time consuming and often requires modification of HIT/EMR. The greatest obstacle can be physician participation.

Professional Management

A large practice needs professional medical practice management to deal with the increasingly complex business and regulatory environment in the United States. A professional medical practice management team can bring sound business principles and plans for practice marketing, operations, billing, collections, contracting, and growth. Physician leadership within the organization remain critical but a professional medical practice management team can allow physicians to focus more on medical rather than administrative issues.

Private Practice

In a solo practice, the gastroenterologist is the lone practitioner. Typically, the administrative and clinical staff is small. Therefore, the solo gastroenterologist must be highly organized and have good financial management skills and a willingness to accept financial risk. The solo gastroenterologist makes all the decisions and is in complete control of the practice. Patients see the same provider for every visit, thus creating a strong doctor-patient relationship.

A solo gastroenterologist may have to work long hours and have little time off. The financial risk tends to be higher in a solo practice than in other practice types. The overheads tend to be higher compared with group practices. Fluctuations in the economy may have a greater effect on the solo gastroenterologist. Despite these disadvantages and current trends in health care, there will always be gastroenterologists in solo practice but they will need to adapt to survive the changes in health care.

A solo practice may operate best in a rural area that cannot support a larger gastroenterology group. In other settings, offering a specific niche not offered by others in the community may also allow for success in a more urban setting.

In a group practice, patient care duties and physical space are shared among a group of physicians. A single-specialty group practice may be attractive because of several factors. A fixed cost of operating a practice is shared among the partners in the group. Partners can share on-call responsibilities, therefore affording a more controlled lifestyle. Days may be shorter and coverage is available, allowing for more free time outside the office. Many choose to join a group practice because of increased financial security and better lifestyle. There is often collaboration between partners, which can be helpful in making the difficult diagnosis. A group practice may allow for internal specialization. The clinical and professional strengths of the partners can help in creating a local gastrointestinal supergroup. Additional specialty training (eg, inflammatory bowel disease, hepatology) or expertise in certain procedures (eg, endoscopic ultrasound, endoscopic retrograde cholangiopancreatography) may be attractive to referring physicians and patients. Large groups can develop sophisticated management of patient populations or clinical service lines (see article elsewhere in this issue).

Large groups or megagroups are not for everyone. Disadvantages of large group and megagroup practice may include a decrease in autonomy and lack of equality. In large groups there is usually physician leadership that controls the governance of the practice. Personality conflicts may make it difficult to work with a large group. In simple terms, not everyone can get on well with other people. Some personalities do best when they are in charge. If someone is unable or unwilling to accept the administrative leadership recommendations, it could make an unpleasant environment for all of the partners. No one expects total agreement on every practice management issue, but there should at least be a shared mission and vision accepted by the partners. Another disadvantage of a large group or megagroup is lack of equality (real or imagined). Are all partners treated equally? Do some partners receive benefits not afforded to other partners? Is there a hierarchy among the partners? Problems may develop if compensation models seem biased or unfair. Is revenue split equally? Is there an equal opportunity to produce? Is there an opportunity to buy into an ambulatory surgical center? These are all important questions that should be asked when considering joining a large group.

In a multispecialty group, the gastroenterologist partners with nongastroenterologists. This entity may have internists, gastroenterologists, cardiologists, and rheumatologists working as a group. Multispecialty groups provide multiple patient services at 1 location and have the potential to negotiate favorable managed care contracts. This type of group includes an established patient referral pattern. There is less financial risk than in solo practice. Salary, benefits, vacation, and medical education time tend to be attractive. Gastroenterologists tend to have lower salaries compared with the single-specialty group practice.

These larger practices are associated with more bureaucracy. Loss of autonomy and decision making are the major disadvantages of this type of practice.

Employed Physician

The employee gastroenterologist works in a practice or department that is managed and owned by a larger entity. The gastroenterologist is an employee and compensated by the entity. This type of practice may be academic, public health (government), or in a hospital-based setting. The advantages of this practice type include a large referral network of practices, more effective managed care negotiations, and financial security. The larger entity assumes the financial risk. It is important that the larger entity is financially sound. The hospital will have a marketing strategy for the practice. It is important that there is agreement in the hospital marketing and the individual practice.

The employee gastroenterology practice is usually less lucrative compared with the single-specialty group practice. Income from ancillary revenue streams may not exist in this type of practice. There may be significant committee work in this type of setting. There may also be teaching responsibilities required in this type of practice.

Locum Tenens

Locum tenens is also an option. In this setting, the gastroenterologist is employed by an agency to work for short periods from several weeks or months at a time. It gives the gastroenterologist the opportunity to try out the market in a certain area. This type of temporary employment may be ideal for some. The gastroenterologist has the ability to choose not only the practice geographic location but may also allow schedule flexibility. Salary is competitive and an agency typically picks up the cost of malpractice insurance. The physician generally does not receive health care coverage or retirement plan opportunities.