Boxed In, but Not Out: Eight Evolving Physician Business Models

Converging events – health reform, Medicare cuts, electronic monitoring, pay or punishment for performance, government oversight as far as the eye can see – have boxed physicians into the corner.

Doctors are being told they must generate, share, and compare data; acquire and use IT tools, adhere to guidelines, join larger groups, and work with themselves and others to achieve scale and infrastructure.

How to get out of the box? This may not be possible or desirable. But the answer may to build your own box. Two ways, for physicians to take control of their clinical and economic destinies by one, creating their own organization; or two, incorporating themselves into new organizations that have elements critics lambaste them for not having or not deploying.

Here, in no particular order, are eight evolving physician business models.

1. Specialty Walk-in Clinics - The Jewett Orthopedic Group in Orlando and Winter Park, Florida, has set up a series of orthopedic walk-in clinics where those with minor injuries can be seen by an orthopedic surgeon, have x-rays taken and interpreted, and have casts applied. This is convenient and accessible access to specialty care at work.

2. New Locations in Abandoned Retail Spaces – A number of physicians and health care enterprises are moving into medical malls and commercial building to set up practices. The lease is cheap, reconstruction is affordable, parking is ample, foot and car traffic is heavy, and access is easy.

3. Big MACCs (Multispecialty Ambulatory Care Centers )- A cardinal rule of innovation is: “Hit ‘em where they ain’t.” Following this dictum, medical entrepreneurs have organized Big MACCs in underserved medical areas where retirees and urban expatriates are moving, where major highways intersect, and where the “new-old” are seeking specialty care, pharmacy and physical therapy services. Big MACCs sometimes constructed with help of hospitals. Most often they are not placed on hospital grounds, but more often in non-urban settings.

4. Free-Standing Procedural Centers - Americans prefer to have certain procedures – cosmetic, ophthalmologic, bariatric, hernias, gallbladders, minor orthopedic surgeries, biopsies and, even births and vaginal hysterectomies, and other unmentionables – performed during the day, where they can enter in the morning and are home at night.

5. Medical Homes, Office and Institutional Based – “Medical Homes” are on everybody’s lips, Medicare, the United Healthcare Group, the American Association of Medical Colleges – as well the national primary care organizations – endorse medical homes. The Duke medical home team has dropped hospitalizations 68%, ambulance transport 49%, ER visits 41%, and asthma-related admissions 40%. But my sense is: physicians have yet to find the model that avoids burdensome paperwork, pays adequately, and helps retain some semblance of control and independence.


6. Retail Clinics and Worksite Clinics - Some tout these as the next retail wave, either alone or in tandem. Walgreen will soon have 500 retail and worksite clinics operating, CVS and Walmart are in the game, and Pitney Bowes has a number of worksite clinics. For primary care doctors, the attractions of worksite clinics are 30-40% more pay, owner-installed EMRs, online access to best practice guidelines, a ready audience of patients, and the ability to control specialty referrals.

7. Hospitals are Physician Partners and Employers – This is a movement that has been accelerating for the last five years, especially among young doctors seeking a balanced life style, free time, fringe benefits, payment of educational and malpractice debts, and opportunities for executive advancement. Hospitals are now busy hiring consultants to build medical staff development plans. One problem here is that the “medical staff” is not a business entity; others are control, capital, and cash distribution issues. In the upper Midwest, hospitals, who have capital and brand name recognition, are acquiring multispecialty groups, who may have neither. Across the U.S. Walmart is opening 400 more retail clinics, to be owned, staffed and run by hospitals with the help of hired physicians.

These models share certain things in common, need for enlightened physician business leadership, necessary capital, adequate information infrastructure, compliance
Regulations, affordable and suitable real estate, and physician supply demand analysis. It is apparent surgical and procedural based specialists have the where-with-all and like-mindedness to put together business entities quicker than primary care doctors with less resources and more diffuse interests.