Moving from employment to independence

When Dale Owen, MD, a Charlotte, NC-based cardiologist, learned that his hospital employer was going to split up his 88-doctor practice and spread the doctors across the health system, he decided he’d had enough. Hospital administrators had already pushed the doctors to prioritize patient volume over quality of care. The doctors were burning out. Splitting up the group was the last straw. When he shared his feelings with the other doctors in his group, virtually all said they felt the same way.

Like many employed physicians, Owen and his colleagues felt that their hospital employer, Atrium Health, prevented them from practicing medicine the way they were trained, the way they felt was best for patients. “We weren't practicing the type of medicine that drew us to become physicians," Owen said.

However, unlike many employed doctors, Owen’s group did something about it. He researched what it would take to make Mecklenburg Medical Group, which the hospital acquired in 1993, independent again, and spoke with each of the doctors individually. The vast majority wanted autonomy, he said. “The older doctors remembered what being independent felt like, and wanted to go back to that way of practicing, to spending more time with their patients. The younger ones felt like this was their one shot at an opportunity they may never have again.”

The medical community and national media closely followed the legal case that ensued. On a Monday morning last April, 88 Mecklenburg Medical Group doctors filed a civil suit against Atrium Health seeking to break their employment contracts, return to independent practice in the area, and be free of the heavy-handed non-compete constraints. By the end of the day, Atrium had granted the doctors’ request. The parties agreed that the doctors would continue to work for Atrium until they’d hammered out the legal settlement that would effectively end a 25-year employment relationship.

In September, the group, officially renamed Tryon Medical Partners, opened its independent doors to patients and began practicing medicine on their own terms.

The story is remarkable for two reasons.

One, because it bucks the trend. As hospitals across America continue to buy up medical practices and turn independent doctors into employees, which studies show is one of the leading drivers behind higher healthcare costs, finding a medical group with the wherewithal to reverse course is both admirable and hopeful.

Two, because getting out of an employment contract isn’t easy. Though many employed doctors claim they would like to be independent, most employment contracts bind them with strict non-compete clauses that forbid doctors who defect from working in a specified radius, say 50 miles, for a year or more.

These same contracts can also test a doctor’s ethics, as many require employed doctors to hit quotas for referrals, admissions, procedures, and tests, leading to over-utilization and higher costs. Independent doctors don’t have that pressure.

The doctors’ complaint against Atrium Health alleged that the health system engaged in monopolistic and anti-competitive behavior. For example, doctors were required in most instances to refer patients needing further care to Atrium-owned or managed facilities, so the profits could stay within the health system, according to the Charlotte Observer.

Such steerage is commonplace, when hospitals employ doctors, as the Wall Street Journal recently reported.

In the months that followed the hospital settlement and the opening of their new practice, Tryon’s leadership scrambled to secure eight new clinic locations, build out 160,000 square feet of clinic space, hire 300 employees, and transfer more than 80,000 patients into the practice.

“The adrenaline was high, and the doctors were invigorated,” said Owen, who tapped several of his long-time friends who had deep expertise in insurance, finance, and public relations to create a strategic leadership team.

“Together, we built a template for how a large employed physician group can become independent,” said Owen, who wants to help employed medical groups across the country break free as his group did.

The effort requires having a rollout plan in place and lining up excellent legal counsel, financing, real estate, and marketing. Timing and discretion are critical.

The support of a national trade association was also among their first acts of independence. In October, the Tryon doctors all joined the Association of Independent Doctors (AID), a national nonprofit that supports independent doctors, and educates consumers, businesses, and lawmakers about why their survival is critical to the nation’s healthcare. AID also offers tools to help doctors who want to break away from employment.

Now AID and Tryon plan to take their team effort, model, and toolkit on the road.

“My vision was to first stand up our practice, and then network with other like-minded practices nationwide to foster a collective vision and bring them with us,” Owen said. “Joining AID is a step in that direction. Together, we want to let doctors know that becoming independent is not as scary as it looks. Physicians are a lot more in charge than they think. They just need to bind together to have the force to do this.”