Triangle Physician Network provides stability for private medical practices

Dr. Sachin Gupta moved to Cary eight months ago after working for several years as an emergency room physician in Florida. Entering a traditionally cottage industry, Gupta never considered starting his own private practice.

“I wanted to join a practice where the difficulties of running your business are taken care of by a bigger group, so I can focus on taking care of patients,” Gupta said.

The Triangle Physician Network, a physician-led group started by UNC Health Care that connects its facilities with community-based private practices, recruited him as the medical director of the Rex/UNC Family Practice of Panther Creek.

As health care expenses continue to rise and reimbursements drop, doctors and hospitals are finding partnerships one way to handle the business climate as well as prepare for the health care reform’s new standards.

Having a wife and two children, Gupta liked that the network provided financial security, whereas starting his own practice wouldn’t.

“It’s not like money is flowing in from day one,” Gupta said about starting a practice. “It makes it prohibitive to start your own practice from the ground up.”

But while building relationships with community-based groups offers benefits to the hospitals and its affiliates, it transforms the industry.

“We have a very severe monopoly problem here,” said professor Curtis McLaughlin, who works in Kenan-Flagler Business School as well as the School of Public Health.

WakeMed, Duke Health and UNC Hospitals are the three hospitals competing for private practices in the Triangle area. The hospitals want to affiliate with primary care physicians because patients get attached to the physician, not the hospital.

McLaughlin said there’s competition in reputation and amenities but no price competition in health care, so the hospital’s brand can allow an affiliated practice to jack its price up.

“There’s now considerable evidence that when consolidation happens, the cost of health care rises immediately,” McLaughlin said.

Of the 750,000 physicians providing patient care in the United States in 2009, 57 percent worked in an office-based practice while 19 percent worked in a hospital-based practice, according to the American Medical Association’s most recent data. Between 1975 and 2009, the number of office-based practices increased by 160 percent while hospital-based practices increased by 96 percent.

UNC Health Care launched the Triangle Physician Network last fall. It started with 60 doctor members, 45 from the Community Based Practices from UNC Hospitals and 15 with Rex Healthcare, and it has grown to 100 physicians and 21 practices, said Executive Medical Director Dr. Robert Gianforcaro.

“There’s virtually no physician that can operate in more than one hospital,” McLaughlin said. “So if you can get them operating in your system, you can get all their business.”

Dr. Susan Weaver, WakeMed’s senior vice president of physician practices, said this isn’t what draws physicians to WakeMed Health and Services.

“People want to be affiliates not because of what they can and can’t charge, they’re looking for high quality care,” Weaver said.

The Triangle Physician Network can be more successful in negotiating reimbursement and contracts with insurance companies than small practices or individual physicians, Gianforcaro said.

Lisa Rosenberg, the director of practice acquisitions for Triangle Physician Network, said health care is one of the highest-regulated fields.

“Doing it as mom and pop is very challenging, they have to deal with a lot of regulation,” she said. “We provide them with services to run their practice more efficiently.”

The group provides private practices the ability to coordinate with the health care system’s electronic medical records, access to operational support and connections with specialty and sub-specialty care providers.

Former President Bill Clinton’s proposed health reform in 1993 also pushed for consolidation, and at that time, hospitals bought out private practices. Both the hospitals and the practices lost money in these contracts, Weaver said.

“We see you can’t run a practice like you run a hospital — they’re completely different,” she said.

In many of the relationships formed during this generation of reform, the private practices keep their independence.

Obama’s health care plan outlines incentive guidelines for networks called Accountable Care Organizations, which the Triangle Physician Network had in mind when it started, Gianforcaro said.

The Centers for Medicare and Medicaid Services proposed rules last March.

Gianforcaro said the 2010 health care reform is more structured and has more popular support, and it is therefore more stable than the 1993 reform proposal. But even if this decade’s reform isn’t seen through, the small offices won’t suffer because of the connections forming now, he said.

“If reform stopped now, we have a network,” Gianforcaro said. “We have a network that negotiates as a group not only for our reimbursements, but also computer services. Now we’re large enough that just by our size, we can benefit with or without the hospital.”

Weaver said WakeMed’s practice partnerships aren’t directly tied to the reform and would continue forming if health reform halted.

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