Finding Success through Practice Collaboration

With all the stressors facing private medical practices today - and those on the horizon - staying independent is becoming more challenging.

While merging with another practice or being acquired were traditionally the avenues for physicians seeking a change, practice collaboration arrangements offer the opportunity to maintain autonomy but still benefit from strength in numbers.

At his session at this year's Medical Group Management Association Annual Conference in San Francisco, Keith E. Chew, MHA, senior vice president of strategic positioning and consulting services for technology and services provider, Integrated Medical Partners will explore the various aspects of creating practice collaborations, including finding the right partner.

"While you don't have to have cultural alignment [between partners], you do need strategic alignment," Chew said. "You have to see the same light at the end of the tunnel and to have that focus.  To me, that's the more important factor when choosing a collaboration partner."

Chew recently spoke with Physicians Practice in more detail about collaborative efforts in advance of his MGMA16 presentation, "Physician Practice Collaboration: An Alternative to Merger or Acquisition," scheduled for Tuesday, November 1 from 2:45 to 3:45 p.m.

Physicians Practice: Are we seeing more practice collaboration because of CMS' upcoming Quality Payment Program (aka The Medicare Access and CHIP Reauthorization Act or MACRA) or were medical practices already heading in this direction?

Keith Chew: It's both. Groups that are extremely forward thinking have been heading down this path as a means to maintaining their independence. And they've seen the strategic advantages of working together, not only from an economies of scale and a cost perspective, but also from the strategic side of things.  And now that MACRA is moving things forward, we're starting to see that the analytics, while important previously, are gaining an even greater status in the whole concept of collaboration. 

MACRA allows groups to either submit individually or in a 'virtual group.' If we are able and in most cases, we can, put together the analytics so we can start measuring the data that is going to be centered on the part of practices in the Merit-Based Incentive Payment System (MIPS) program, we can actually start combining groups within collaborations [utilizing] these group models and utilize the analytics to see where the highest scores may be generated.  We can utilize, through collaborations, a mechanism to build virtual groups to the greatest advantages of the practices, by appropriately applying the analytics. 

PP: What is it about collaboration that assists independent practices?

KC:  Small practices are looking at all kinds of pressures for additional [quality] reporting, for normal costs of doing business; all of those things together place an additional burden on the practice … and then you get the hospital systems coming along and basically saying they need you to be more of a team player. So when you've got all these pressures coming at you and you are a small- to medium-size practice, you either have to decide it is worth maintaining our independence or it is just not worth it anymore. The finances have cut into the compensation for physicians within the practice to the extent that the return on all of the investment from both a financial as well as an emotional and physical basis are just not there.

In a collaboration, when you bring multiple groups together, you're able to, through that collaboration, get a lot of the economies of scale that these larger practices can. Medical malpractice is one that starts off as a big boom most people don't think about. When you get a group together of around 40 or greater physicians, you are able to negotiate decreases in your malpractice rate … you can get a sizable financial savings for practices.

It also allows them to come together to more appropriately meet the quality metrics in the payer contracts. For example, with a radiology group I work with in the Chicago market, Blue Cross Blue Shield loves to put quality metrics and performance into their contracts … if you meet certain quality metrics, they'll be happy to give you additional incentive dollars. From a marketing perspective, they can prove improved quality and more patients will want to come back to them based upon that improved quality.  When you've got nine separate groups trying to report this information…you aren't certain the way all the data has been collected is consistent, and when you have some groups that have met [the quality benchmarks] and some groups that don't, it becomes very difficult from a payer perspective to understand how you'd dole out [savings].

…Yes, there is strength in numbers through collaborations, but it's the fact that once you come together, you start seeing the financial impact of a larger practice for all intents and concerns when it comes to your purchasing abilities. You start to see the ability that as a larger [group] you can focus on more strategically appropriate issues from a quality perspective or marketing perspective and those have an impact back to the systems and facilities you serve.