"The integration is a consequence of everything from the narrow networks
to bundled payments to a new opportunity at population management with
the hospital systems," says Bert Mandelbaum, MD, an orthopedic surgeon
with Santa Monica (Calif.) Orthopaedic & Sports Medicine Group. "When
you look down to the narrow networks and global fees, as well as bundled
payments, there are marketing opportunities in a large group which can
still enhance the individual physician."
But the consolidation has a different impact on physician practices depending
on where they're located. For physicians in a large group, such as
the Hospital for Special Surgery in New York City or Rush University Medical
Center in Chicago, there are clear benefits. Surgeons who are part of
larger independent physician groups like Rothman Institute in Philadelphia,
OrthoIndy or OrthoCarolina can also benefit from economies of scale.
Many of the big networks come in geographical distribution instead of one
local environment. The only practices escaping consolidation are those
in small towns and rural areas, but even there physicians are seeking
alignment with hospitals or other groups. And there are challenges to
both practice environments.
"Speaking as a physician directly involved with a large medical group
and center, there are challenges for physician leadership in realizing
the opportunities in healthcare and developing the right relationships,"
says Dr. Mandelbaum. "Orthopedic groups want to further enhance and
develop physician networks as well as challenge payers in terms of reimbursement
levels. They're also challenging the relationship between quality
and payments. Physicians need to find a place for themselves before the
music stops."
At Kerlan-Jobe, Dr. Mandelbaum is working with his colleagues to find the
right balance for expansion. The group is targeting specialists in knee
arthroplasty for future growth, as the procedures are expected to increase
six-fold in the next 15 years.
"You want to balance your group to meet the demand coming down the
pipe," he says. "There are other challenges with the aging population
increasing exponentially. There are changes in the hospital dynamics for
distributing patients, and the patients who make up our core base are
getting older every day."
As the 90-plus year old population grows, their medical costs increase
significantly and there is a growing gap between providing the revenue
to pay for their healthcare in the physician community. There are fewer
healthcare dollars in the Medicare budget to spread around, and the response
will be decreased Medicare reimbursement."
In response, the government could increase the Medicare beneficiary age
minimum, but the action hasn't been taken," says Dr. Mandelbaum.
"From an orthopedic surgeon perspective, there is a greater demand
for the ability to manage patients but less money in the social security
pot."