Changing Practices Physicians Choose New Business Models

General Physician, PC President Darryl Ernst, and OB•GYN Associates of WNY Managing Partner, Dr. Carlos Santos, were quoted in a recent feature in Buffalo Business First examining the evolution of the business model for physicians.

Changing practices: Physicians choose new business models 

By Tracey Drury  – Reporter, Buffalo Business First

10 hours ago

The independent physician practice is slowly disappearing in Western New York, with a series of maneuvers this year illustrating the changing reality for doctors in private practice.

They range from mergers of smaller practices into multi-specialty practice groups; sales of practices to hospitals and transformations that make practices part of captive physician corporations closely affiliated with health systems.

The reasons for the changes vary, but changing funding models and declining reimbursements are leading factors, said Christine Ignaszak-Nadolny, executive director for the Medical Society of the Counties of Erie, Chautauqua & Orleans.

“Everyone is looking to see how best they can enhance their services and live within the boundaries of the declining reimbursements,” she said. “The whole landscape is changing, so they’re looking for ways to continue to practice.”

It’s not just a Western New York trend: Ignaszak-Nadolny has heard similar stories at a recent American Medical Association meeting.

“Physicians are looking at what is best for their practice, for their patients as well as for themselves,” she said.

Here are some of the changes:

• General Physician P.C., an independent corporation closely affiliated with Kaleida Health and Erie County Medical Center Corp., grew its women’s services line this year with Eastern Niagara Obstetrics and Gynecology in Lockport joining the group and rebranding as General Physician PC Women’s Heath. OB•GYN Associates of WNY joined the group late this year, adding three more locations to the women’s services group to the group, as well as 30 more providers. Earlier this year, primary care group Lancaster Medical LLC merged into GPPC, adding seven providers.
• Trinity Medical WNY P.C., a physician practice professional corporation affiliated with Catholic Health, grew its primary care group with the addition of Niagara Family Medicine Associates, which will transition into the group early in 2020 and rebrand as Trinity Niagara Family Medicine. That followed the merger this summer with Buffalo Orthopaedic Group, creating Trinity Medical Orthopedics.
• Multi-specialty groups growing through the trend include Excelsior Orthopedics, which expanded this summer when nine surgeons from the former Northtowns Orthopedics and another from Buffalo Orthopaedic Group joined. And UBMD Physicians’ Group expanded when Delaware Surgical Group was folded into UBMD Surgery in January.
• Those choosing the employment model with larger institutional providers include Southern Tier Cancer Center, a private oncology practice in Olean merging into Jones Memorial Hospital; and Pembroke Family Medicine, a primary care practice whose three sites in Alexander, Batavia and Corfu will convert into community health center sites by becoming part of Oak Orchard Health.

Mary Ann Pettibon, CEO at Oak Orchard, recognizes that’s an unusual move for a private practice, but one that offers an alternative option.

“It’s very different,” she said. “What historically we’re hearing in the community is those private practices that do join larger hospital systems are not necessarily as satisfied as if they would have done an alternative. We’re pleased this particular practice has chosen the alternative.”

Succeeding independently just isn’t easy anymore, said Dr. Jerome Andres of Niagara Family Medicine, who began in private practice in 1984 and is now one of three physicians at the practice over the age of 60.

Merging into Trinity Medical allows the physicians to keep seeing patients and remain closely aligned with Mount St. Mary’s Hospital.

“You can’t come out of residency and start a practice of your own — there are just too many factors that weren’t there when I started,” he said. “It’s very expensive for practices to recruit. We figured attaching to a bigger entity would make it easier for us to continue into the future.”

The practice is among dozens in the past year that have explored options to join Catholic Health, Trinity Medical or another independent practice within Catholic Medical Partners. The conversations all start with what the physicians need and want, said Mark Sullivan, CEO at Catholic Health. 

“It’s not a cookie-cutter approach for Catholic Health,” he said. “We’re not in a huge acquisition mode. It’s more about where is the community lacking access and where physicians groups are in that point in their career for succession planning and exit strategy.”

In the end, the decision is based on whether affiliating or merging is beneficial for both sides, Sullivan said.

“We’ve said yes to some, and no to others. It depends on the fit from the culture, quality and values side, and where health care is headed,” he said.

Dr. Carlos Santos, a partner at OB•GYN Associates of WNY, said his group chose to become part of General Physician P.C. to offer retirement options, ensure continuity for patients and allow providers to practice medicine without having to worry about the business side.

“I’m getting a little older, and some of the other docs are a little older, and recruitment isn’t an easy feat,” he said. “I’m 62, but I still want to practice for another eight, nine, 10 years as long as I can stay healthy.”

Darryl Ernst, president at GPPC, said being affiliated with but independent from a hospital system gives physicians an environment that’s closer to what they’re used to without having to give up all the reasons why they went into private practice in the first place.

“We see a lot of physicians in the community who are working if not as hard and as long today but probably almost longer, but for the same income or in some cases considerably less,” he said. “So the economics are really stacked against private practices, and really especially against smaller to medium-sized practices.”