Kevin D. Plancher, M.D., M.S. Associate Clinical Professor Albert Einstein College of Medicine What is the Future of Orthopedics: Hospital Employed vs

Kevin D. Plancher, M.D., M.S.Associate Clinical Professor

Albert Einstein College of Medicine

What is the Future of Orthopedics:Hospital Employed vs Private

Practice

AAOS Fall Meeting October 10, 2012Philadelphia, Pa

© Copyright 2012 Plancher Orthopaedics & Sports Medicine PLLC

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: No Conflict Reported Item 3B Paid consultant for a company or supplier: No Conflict Reported Item 3C Unpaid consultant for a company or supplier: Merck Item 4 Stock or stock options in a company or supplier: No Conflict Reported Item 5 Research support from a company or supplier as a PI: No Conflict Reported Item 6 Other financial or material support from a company or supplier: No Conflict Reported 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


Personal DisclosureCareer 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 1994-1999- Montefiore Medical Center/Albert Einstein College of Medicine

Private Practice 1999-2012 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


Private Practice vs Hospital EmployedTopics 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


Private Practice Vs Hospital EmploymentFirst 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

Ask The Correct Question!!!!


Private Practice Vs Hospital Employment15 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


Private Practice Vs Hospital Employment10 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


Private Practice vs Hospital EmploymentWhat 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

Orthopedic Surgeon Practice Setting: 9,400 Returned Practice Surveys

• Type of Practice 2004 2008 % Change• Priv. Practice-Solo 25.8% 20.9% ↓ 19%• Priv. Practice-Group 50.6% 44.3% ↓ 8.3% Total Private Practice Groups & Solo = 65.2%

• Priv. Pract.-Multi sp. 7.3% 8.3% ↑ 12.3%• Academic Practice 8.4% 8.5% ↑ 1.2%• Hospital Employed 3.8% 6.7% ↑ 76%

AAOS NOW, December , 2009

Recent Trends in Practice Setting

Source AAOS Survey 2011

Practice Setting 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% 7.0% 8.3% 9.0% 28.6%

Academic 1% 2% 6.7% 3.6% >200%

Hospital Employment

2% 2% 6.7% 8.1% >300%

AAOS ,Health Systems Committee:, 2011


Private Practice vs Hospital EmployedWhere 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

Private Practice vs Hospital EmployedMalpractice

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


Private Practice vs Hospital EmployedAdvantages 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!!


Private Practice vs Hospital EmployedDisadvantages of Staying Solo

You Can Come and Go As You Like………As Long As You Have

Back-UP!!!!!!! That’s the Catch!


Private Practice vs Hospital EmployedAdvantages 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

Private Practice vs Hospital EmployedAdvantages of Hospital Employed

Employee benefits 401K Pension Holidays Time Off

Reimbursement Contracts with Payors

No Worries Malpractice

No Costs To You Indirectly Effects Paycheck

Private Practice vs Hospital EmployedDisadvantages 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

Private Practice vs Hospital EmployedPotential 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 CallScheduleKaiser

Orthopedics Administration Does Not Understand How

Orthopedics Differs From Other Specialties AAOS NOW, 5/2012

Private Practice vs Hospital EmployedAdvantages 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

Private Practice vs Hospital EmployedAdvantages 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

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

Schizophrenia

Private Practice

↑ Stress

Employed Physician

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

Private Practice vs Hospital EmployedBeing Flexible

Why Be FlexibleHe Thinks He Has a

ProblemOften We as Physicians

Think We Have a Problem With Our Job

Think Twice Does He Have a

Problem –NODo You Have a

Problem??????

Private Practice vs Hospital EmployedHospital 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

Private Practice vs Hospital EmployedHospital 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

Private Practice vs Hospital EmployedHospital 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!!!!!!!

Private Practice vs Hospital EmployedHospital 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

Private Practice vs Hospital EmployedPrivate 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

Private Practice vs Hospital EmployedContracts

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

Private Practice vs Hospital EmployedCoding

Private Practice 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

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


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

Any Conclusions?(Too Early-Hold On)

Caught Your Attention?

• Have I Convinced You to Think Twice About Hospital Employment?

• Lets Look at Private Practice

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

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 (http://www3.aaos.org/member/prac_manag/prac_manage.cfm)

• AMA (http://www.ama-assn.org/ama/pub/physician-

resources/solutions-managing-your-practice.shtml)

http://www.ama-assn.org/ama/pub/physician-

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

Establishing a Sound Business True Business Model

Where to Start Realize

There is Always Room for Another Great Surgeon

Available Affable Appropriate

Available 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

Establishing a Sound Business ModelPrivate 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


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 CompaniesNever Hurt the Patient


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

Establishing a Sound Business Model

Marketing-Private PracticeYour 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′?


Marketing-Private PracticeYour 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


Marketing Advertise

Individuals Internet Show Your Face In

Offices/Hospital Hospitals

Local Newspaper Regional Newspaper

• BrandingHSS-New York Times

Hospital Newsletters


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!


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!

Establishing a Sound Business ModelClassic Medical Model

EarnBefore

YouSpend!


How Much Do You Get Arthroscopy Shoulder

Labral Repair In Out

Rotator Cuff Repair In Out

Arthroscopy Knee ACL

In Out

Total Joint Total Knee Replacement

In Out Hospital

Trauma ORIF Radius-Gallezzi

Surgeon Hospital


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


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


Classic Business Model

Spend and Invest In Your Future

Wisely!

Stop Worrying!Focus on Your

Patients!


Thank You

If You Build It They Will Come!!!!

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

Documents

Kevin D. Plancher, M.D., M.S. Associate Clinical Professor Albert Einstein College of Medicine What is the Future of Orthopedics: Hospital Employed vs