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Collaboration, Not Competition, Will Save Medical Practices


Market forces are driving new healthcare models, so it's critical to look at your practice's future. And collaboration may be the key to any kind of longevity.

There's no doubt that the healthcare landscape has changed in the past five years and will continue to evolve in the next five as well. But whether independent medical practices are part of that evolution will depend on what they see ahead on the horizon: undefined opportunities or a precipice leading to their demise.

"While we've gone through a transition, there are a great number of opportunities for practices to focus the way [they operate] … for true positive outcomes," said Keith Chew, managing director for strategic positioning and consulting for Milwaukee-based consulting firm Integrated Medical Partners.

Chew and his colleague, Douglas G. Smith, managing partner for the firm, presented "Survive and Thrive as an Independent Medical Practice" at the 2014 Medical Group Management Association Conference on Mon., Oct. 27.

From increasing competition from "disrupters," such as Wal-Mart, CVS, and others offering the same services as your practice to the fluctuating nature of fee-for-service reimbursement, maintaining an independent medical practice has definitely become harder. What is clear, said Chew, is that scale - from geography to core competencies and strategic positioning with customers - matters. But how do you gain scale while also maintaining independence?

Considering joint venture collaboration

Smith outlined several of the typical merger/integration models seen today, but highlighted the joint venture integration model, where practices "benefit from one another and for one another, but also remain independent" as an alternative to the traditional merger model. "They are integrated, but not from a business standpoint. You keep them separate," Smith said, pointing to a management services organization as an example as the resulting new company.

And this new joint venture network collaboration can result in best practices, common protocols, and perhaps an area where healthcare is lacking: better informatics and analytics.

"I've never seen an industry gather so much data, but so little information," Smith said. "We've got gobs of data, but don't know what it is telling us and we don't use it for our knowledge and to tell us what differentiates us [as practices]. We can't answer the 'Why us?' questions - 'Why trust us with your patients?' 'Why give our practice your money [versus other practices]?'"

When you come together as a joint venture, he added, you can get some uniformity on what the customer wants, whether that customer is a patient, a payer, a hospital, or another healthcare stakeholder that affects your medical practice. For payers, he noted, 95 percent of the time you can utilize data to present the "why [your medical practice]" story in negotiations with payers to create a position of strength. "You'll be surprised how you'll do and you'll never go back," he said.

To develop joint venture leadership, Smith advised identifying the key group or groups within a defined geography with the "affinity to lead the development of a new model." That includes: a strong presence in their market; proven administrative and physician leadership empowered and ready to make decisions; recognition of the viability of the value proposition and a willingness to influence others in the geography to work together; and recognition that the threat to independent practice is greater than overcoming the mechanics of groups in geographic proximity working together.

"Quit being competitors and start being collaborators," he said. "Because there's something bigger out there. … Don't be left out, be a leader.  There are lots of opportunities on the horizon there for the taking, but it takes a different mindset to get there."

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