A New Alternative to Help Independent Practices Thrive

By Laura Freeman

In a world of continual change, surviving depends on evolving. That’s as true for healthcare practices as it is for nature.

A generation ago, there were still small practices where one or two independent orthopedic specialists would share an office. Then the mandate for electronic medical records made it imperative to evolve. Only through the strength of numbers and shared costs could a larger practice afford the costs of buying computer hardware and software, plus the staff to operate and maintain it, and the protection to guard data and insure it against cyber attacks threats. The environment demanded that practices be large enough to share the costs.

Today, rising overhead with regulatory and legal pressures are creating a stressful environment for independent practices who must adapt. Some have sold out to equity interests and taken jobs as employees. Others are going to work for hospitals. A few are looking for a better way to evolve and maintain their independence. As of January, several Alabama orthopaedic practices seem to have found that third alternative as members of the Southern Orthopaedic Alliance.

“It gives us the buying power of a much larger group, but each member retains local control of decision making on compensation, hours and other operational issues,” said alliance president J. Grant Zarzour, MD of Gulf Orthopedics in Mobile.

Seeing how well similar organizations were doing in other states gave Zarzour hope that there was a way for independent practices to succeed while giving patients quality care at appropriate prices.

“That encouraged me to contact other independent practices in the state that I knew were facing the same challenges and were no more eager than I was to become someone’s employee,” Zarzour said. “Part of my dream when I set out to become a doctor was to work for myself and make my own decisions. I didn’t go through medical school and all that training to have someone else tell me how to practice medicine based on their latest printouts.

“I could read the spreadsheets myself and saw that what we independent practices paid for supplies, insurance, and other services couldn’t be sustained forever, especially when we had little to no bargaining power, no real voice in regulatory matters and we were paying to duplicate a lot of the services other practices were paying for. If we could share some of these costs and combine our buying power, that could put us in a much better position to go back to spending more time being doctors and less time worrying about whether I should have taken more business classes in college.”

Southlake Orthopaedics in Birmingham was one of the independent practices thinking along the same lines. “When I heard about the alliance Dr. Zarzour was working on, I remembered a colleague in a nearby state who had mentioned joining an alliance,” Christopher Heck, MD, a Southlake physician, said. “To vet the idea, I called my friend to see how it was going. His response was extremely positive. He said that negotiation as a larger group was getting them better prices on supplies and better service, too. Together they were seen as being a big enough client to respond to now rather than a small operation that could be put off. He also said the promise of independence on the local level held true. It was their practice and they decided how many patients they saw and how long they needed to spend with them.

“Doctors tend to be type A people. It’s what gets them through medical school and residency, and helps them make difficult decisions in life and death situations. Type A people tend to want to have their own business and build something for themselves. They just aren’t really suited to being employees who are told what to do based on a different set of priorities from people who have all together different training and goals.

“Being part of a practice feels a lot like having my own business. I’m responsible for what I earn based on what I do. If I need to take a few hours off to go to the dentist, I don’t have to ask for permission, but I know the value of making up those hours later.

“To me, the independent practice model works better from both job satisfaction and patient care perspectives. It is the business of physicians, but it is also their calling, so they are looking at quality of patient care and not just profit when topics like increasing case load goals next year come up.”

In addition to Gulf Orthopaedics in the greater Mobile area and Southlake Orthopaedics in Birmingham, Southern Orthopaedic Alliance’s founding members include Alabama Back Institute in Jasper and Anniston Orthopaedics. The alliance is also talking with a number of other practices across the state.

The alliance shares one tax number and a patient-centric approach to care, but each member operates as its own division with autonomy in decision making on local matters.

“So far, it has been everything we have hoped for,” Zarzour said. “Negotiating together has helped in getting more reasonable prices on supplies and equipment. We’re also in a better position for negotiating services like insurance coverage, including business, malpractice or health coverage for our staff. If we need specialty expertise on changes in Medicare billing, we don’t each have to hire someone. We can pool our resources and hire the best of the best. And in regulatory and governmental matters, we now have a seat at the table.”

Several independent orthopaedic practices have expressed interest in learning more about the alliance and the advantages it can offer.

“We have detailed information on our website, SouthernOrthopaedicAlliance.com, and they are always welcome to call me and we can arrange a time to talk,” Zarzour said. “We look forward to having members in every part of the state. If we need to refer someone in that area, it would be helpful to know who is particularly adept with that type of procedure or condition. It always feels better referring patients, their families and friends to people we trust.

“We get to know each other pretty well in our regular video meetings and we stay in touch with updates when things are happening that our members need to know about. We have experts working for us who spent a lot of time in business classes so we can spend more time with our patients, which is where we’d rather be.”