Why Us? Why Not Us?

“No one in health care is immune to the forces of consolidation,” said Dominic J. Bagnoli, MD, chief executive officer of USACS, one of the nation’s major physician-owned practice groups. “That goes for payers, hospitals, device manufacturers, and providers. It’s a cycle that plays out in every industry, and if you don’t participate, there’s a potential to be left behind.”

USACS is one of the larger national players, a hybrid organization formed when Canton, OH–based Emergency Medicine Physicians joined with capital partner Welsh, Carson, Anderson & Stowe in 2015, anticipating synergies between medical and financial expertise. USACS, 1 of 12 firms in Welsh Carson’s current health care portfolio, also includes several regional groups among its founding partners, which include Emergency Medicine Physicians; Emergency Service Partners in Texas; Ergentus, Apex Emergency Group, and Emergency Physicians at Porter Health in Colorado; Tampa Bay Emergency Physicians in Florida; and MEP Health (formerly Medical Emergency Professionals) in Maryland. “USACS is majority physician owned,” Dr. Bagnoli reported. “That’s a big difference. USACS was created to ensure the physician-ownership model for the long term.”

Another growing firm, Schumacher Clinical Partners, launched in Lafayette, LA, in 1994 as a small emergency medical group, aligned with its first hospital (Opelousas General) the same year, and expanded steadily during 2 decades, merging with Hospital Physician Partners of Hollywood, FL, in 2015 and with Traverse City, MI–based ECI Healthcare in 2016 to become a national behemoth, operating 450 facilities in 31 states, with more than 7,200 providers serving more than 8 million patients. Schumacher has diversified from its original single-specialty status to include hospital medicine, telehealth, employer-provider linkage, and consultancy. The firm remains privately owned and led by board-certified emergency physicians, including its founder, William C. “Kip” Schumacher, MD.

Randy L. Pilgrim, MD, Schumacher’s chief medical officer, attributes some of the firm’s growth to a combination of standardization, resource scale, and organizational culture, all of which can insulate a practitioner or small group from administrative headaches in the era of close Medicare scrutiny, private-insurance complications, and Patient Protection and Affordable Care Act–related disruptions. “The most consistent driver that we hear from people that are not part of a consolidated effort comes from individual physician practices or very small groups that say they’re having trouble keeping up with the practice demands, the administrative demands, and the meteoric increase in all of the above,” he said.

Consolidation offers standardization of both administrative and clinical processes, Dr. Pilgrim continued: “The 3 tenets that we use for increasing quality are to deliver high-quality evidence-based care, to reduce the variation in that care across providers and provider communities, and then to trend positively…. Smaller practices frequently use all of their resources in the practice itself, as opposed to supporting it and developing the practice itself.” Physician ownership is only one of the essential variables, he added. “You can have management, influence, control, and direction without majority ownership. You can have it with majority ownership as well. The real question is, what culture does the organization have?”

In emergency medicine, consolidation has taken a firmer and earlier hold than in most other specialties. Physicians and scholars who have analyzed the phenomenon cite a range of factors, including the timing of the specialty’s founding in relation to the increases in group practice, the relatively small number of emergency departments (EDs) nationwide in relation to private offices, the commonalities of expertise in emergency practice, the hospital setting with a central role for the ED in admissions, the energetic entrepreneurialism of certain early entrants in the field, and the incentives and priorities commonly found among emergency physicians. “There are a number of my colleagues that went into medicine so they didn’t have to deal with the things that we bring to their practices,” Dr. Pilgrim noted. “They don’t want to deal with administrative tasks. They don’t want to look into the future and say, ‘What does my practice need to look like 5 years from now?’ because that’s an eternity for them, and they make decisions to affirm families, lifestyle, other pursuits; and that leaves the work yet to be done, so that’s what we do.”

Dr. Pilgrim acknowledges critiques of practice management groups over micromanagement but believes critics sometimes confuse the disease and the cure. “I think it’s true that there is less autonomy in clinical medicine than there has been in the past decade or two. I think that’s true. The question is whether the practice model helps you with that or increases that burden, and it’s our view that we actually help you with that. And there are times when we know that we’re shot because we’re the messenger, or even the solution maker. But over time, that tends not to last because in fact the realities we help people see are not ones we’ve created. They’re ones that we’ve brought solutions for.”

Scrubs Versus Suits

Perspectives differ on whether practice consolidation is a solution or a problem in its own right. The corporatization of emergency medicine was a primary concern in the professional-society schism that led to the formation of the American Academy of Emergency Medicine (AAEM) in 1993. AAEM’s founding president, James Keaney, MD, had pseudonymously written The Rape of Emergency Medicine in response to assorted abuses that he correlated with corporate control. In Dr. Keaney’s caustic caricature of contemporary practice conditions—later substantiated in some instances by investigations televised on CBS’s 60 Minutes — the rank-and-file emergency physicians (“scrubs”) were being continually exploited by profiteers (“suits”) who, although some were MDs themselves, infringed on physicians’ professional autonomy in every realm, from clinical protocols to coding to personnel decisions, spoke in glibly dishonest corporatese, and added little or no value to medical operations. Such practices, Dr. Keaney charged, had gradually overtaken the specialty, with comically ghastly effects on the quality of care.

Dr. Keaney’s cautionary tales, one should note, evoked corrective measures. “In my experience, physicians have done a good job protecting patients from the scenarios Dr. Keaney predicted,” said Dr. Bagnoli. “Every physician I know, in every specialty, can offer a tale about ‘bucking the system’ for a patient. It’s our responsibility to remain uncomplacent to bad policy decisions.” Dr. Pilgrim noted that in conflicts between hospital management and physicians, “more frequently…a group like us would stand in between the provider and the pressures from the hospital, or hand in hand with them.”

Robert M. McNamara, MD, professor and chair of emergency medicine at Temple University’s Lewis Katz School of Medicine and second president of AAEM (1996 to 2002), noted that the more flagrant abuses in Dr. Keaney’s book, including “the use of unqualified providers,” have diminished, yet “the issue of corporations being in control and running the practices has actually grown since the time of the publication of that book.” Observing that many states prohibit the corporate practice of medicine because of “abuses when you put the business interests between the physician and the patient” (eg, the inherent company-store-style conflicts of interest when early-20th-century industries employed physicians to treat workers), Dr. McNamara found little substantive distinction between such arrangements and today’s conditions, in which “they basically get around those laws by using sham professional associations,” the professional corporations and limited-liability companies through which physicians are commonly organized in states with bans on the corporate practice of medicine.

“Emergency medicine unfortunately led this trend, and it was all about money,” continued Dr. McNamara. “The original code of ethics in 1968, the original bylaw of the American College of Emergency Physicians [ACEP], says that you will not make money off of your fellow physician.” Faulting both ACEP’s leadership for accommodating corporate interests and the Society of Academic Emergency Medicine’s leadership for indifference to practice concerns altogether, Dr. McNamara contended that many colleagues are sitting ducks for corporate rentier interests. “Some of it has to do with the lack of savvy of the people that went into emergency medicine,” he said. “The people who entered the specialty, they’re not the typical doctors chasing the almighty buck. They’re choosing to work in the emergency department, where you take care of the poor, the homeless, the undesirables.”

The material damage to these nonfinancially focused physicians is quantifiable. According to analysis of forms that companies submit for initial public offerings and Forms 10-K for the Securities and Exchange Commission indicating their profit level, Dr. McNamara estimated that “in many cases, doctors are losing for profit 15 to 20 percent of what they’re bringing in.” Bundled contracts, he added, often siphon funds from an ED to subsidize hospitalists and other less lucrative areas, “the other issue that’s killing the specialty.”

Dr. McNamara is under no illusions that the consolidation tide will be reversed any time soon, and he acknowledges that many physicians find salaried positions congenial. “I think everybody appreciates that the business of medicine is complex, and to try to do it yourself like it was done in the old days as just a mom-and-pop shop, but one of the docs being the chair and taking care of the business end, isn’t the best or most efficient model. Getting professional help to run your practice—there’s nothing wrong with that. But the issue is, if they control your practice, we think there’s something wrong with that.” For physicians who seek the advantages of a large organization while viewing their autonomy on certain points as nonnegotiable, Dr. McNamara’s organization has launched its own alternative, the AAEM Physician Group.

His position during the years has been to promote board-certified emergency physicians’ interests through editorial advocacy and AAEM policies, supporting physician ownership, democratic procedures within organizations, and transparency in billing. “If there’s one solution to moving emergency medicine away from the corporate practice, it would be for every emergency physician to see what’s actually paid in their name, to see the amount of revenue they generate…. The majority of the emergency physicians do not see that. They have no idea of their economic worth. And if they ask for it, in the corporate world, they get threatened with termination.”

Due process in personnel decisions, he said, is another fundamental right: “The ability to be fired without due process compromises our ability to advocate the best we can for the patients. It’s pretty simple. Doctors should be the owners. They’re the ones seeing the patients. They’re the ones with the medical license. They’re the ones there at 2 o’clock in the morning taking care of the sick trauma patient, and they should own it. That’s why they went to medical school.”

Physician ownership, he finds, is necessary but not sufficient to protect physicians, particularly in groups in which non-MD investors have a substantive interest. “The question is,” Dr. McNamara continued, “what is truly a physicians-owned group? In its purest definition, it’s led by physicians; there isn’t lay influence. And doctors who join it can become an equal in the group. I mean, that’s…the democratic definition, where you join a group; after a trial period, you have an equal share of the profits and an equal say in the decisions affecting the group. That’s the ideal model. But you have some large groups, while physician-owned, [that] don’t fit that model. So what the American Academy is trying to do with its Physician Group is to basically lay a set of principles down that will ensure fairness [so] that it will be more like a traditional model where people are in it together, working as equals, sharing equally in the profits of the group.”

The AAEM’s position, Dr. McNamara acknowledged, is not universal among emergency physicians; some are comfortable with the circumstances that large groups offer. “Frankly, it’s thought to be part of a generational thing to say, ‘Look, I’m making good money. I know somebody’s making a profit off of me, but I just want to go in and do my shifts, and that’s how I want to live my life.’ And that’s fine…. If you look at the ads for some of these companies that actually play on that, they say, ‘Hey, come work for Team Health and you can spend your time surfing, mountain biking….’ It’s a trade-off, though. You’ll make good money—not as much as you could—but you’ll also be under the control of an administrator, who will want you to meet metrics, who will want you to have higher patient satisfaction scores, who will want you to basically yield to whatever the hospital administration thinks emergency medicine should be doing. Okay. Who will not support you if you get into a dispute with some other specialist at the hospital. Who will defend the contract, the profit stream from the contract, more than they will you as an individual physician.”

Independence from micromanagement in decisions about matters such as shift schedules, patients-per-hour quotas, or Press Ganey surveys, Dr. McNamara added, may become more valuable as emergency physicians progress in their careers. Employee status, he believes, is “a recipe for burnout, to yield to control in a difficult specialty, to be treated like a commodity.”