As in all medical specialties, the consolidated healthcare model is becoming more and more prevalent in ophthalmology. Consolidation refers to healthcare entities, such as physician practices, clinics, and hospitals, being acquired by a parent organization that then takes over ownership and management.
The purchase may be orchestrated by an existing health system, corporation, or private equity firm. When purchased by a private equity group, the goal is usually to increase the value and then sell the practice for a profit.1
Research has revealed both pros and cons to the consolidation models. The perceived upside is that it promotes efficiency by taking over the day-to-day tasks, such as reporting, navigating insurance, human resources, scheduling, training, etc, while also reducing costs by brokering lower prices on equipment and supplies bought in bulk.1,2
Logic would dictate this would lead to higher quality care and profits; however, this is not always the case. Some studies have suggested that consolidation decreases market competition and puts profitability as its top priority, which eliminates physicians from decision making, makes costs for services higher, and compromises patient care.1,2
Therefore, private practice is still preferred for optimal disease diagnosis and management at a more affordable fee.3 We spoke with Brett Mueller, MD, and Rebecca Miller, OD, from Mueller Vision LASIK & Cataract Eye Surgery in Fort Worth, Texas, about the perks and pains of private practice amidst the proliferation of consolidated healthcare.
What do you think are the main factors driving the healthcare industry toward a consolidated model?
Dr. Mueller: Insurance, for one. Just this morning, we had one patient on an Ambetter Value Plan; it took us an hour to figure out if we were in-network or out-of-network, with four of my team members actively trying to figure it all out.
The insurance company was giving us conflicting information, so we had to get a supervisor. We found out that we weren't in-network. Furthermore, there's not even a surgery center in the Dallas-Fortworth area that even takes this plan.
It's very cumbersome to navigate the insurance sector, and it takes a lot of bandwidth, so to have these huge infrastructures in place helps. These larger groups take care of the business aspect, and that is a huge burden that can be lifted off doctors. I can definitely see the allure, because it's expensive just to navigate this complex healthcare system.
Dr. Miller: I feel like physician burnout is a real thing, and I don't think doctors get burned out seeing amazing patients. They get burned out dealing with these insurance panels. I would wholeheartedly agree that the consolidation that comes from administrative burden being offloaded is important. But looking at where the physicians are getting burned out is key.
Would you recommend physician-owned practice or an equity-owned group practice?
Dr. Mueller: I think both models work, and really it comes down to the wants of the individual person. If you just want to just do your job, show up, not have to worry about anything, and hang it up at 4:30 and go home to hang out with your wife and kids and take your vacation, then private equity is not a bad option. It is stable and sustainable, and you're going to have that steady paycheck.
If you're a little bit crazy, like me, then you want more; you want to have ownership. The beautiful thing about it is that I get to run it the way that I want. The only person that tells me what to do is me, and so there comes a lot of independence associated with that.
The high peaks are really high, but the valleys are very low, and it’s worth noting that 10% of what I do is actually ophthalmology, while 90% of what I do is practice development. If you're not going to be satisfied just being an employee, then hanging your shingle is definitely a viable option that is very rewarding.
As an owner, do you think private ophthalmology practice is sustainable today?
Dr. Mueller: In ophthalmology, it is, but it leans on your practice being an efficient lean system. The MD/OD practice model works very well. We maximize what we both do best by keeping me in the operating room and her seeing patients, helping me out with all of the pre- and post-operative care. It really enables us to be a very efficient team.
Could you please elaborate on the benefits of an OD/MD practice?
Dr. Mueller: It creates extra bandwidth for me as a surgeon and as a practice owner, too. If I have Dr. Miller seeing patients, that opens up a day where I can be doing administrative duties or other tasks. For example, tomorrow, I'm doing surgery, and then I'm going to drive up and give a talk while Dr. Miller sees the patients.
This setup gives me flexibility in my schedule, and, on Monday, I'm going to be with my kids at their elementary school, touring around and helping out throughout the day. I get to do that because Dr. Miller is here in the clinic to see patients—and vice versa. I think it provides a good balance of life.
Dr. Miller: I feel like ODs really get to practice at the peak of their degree in OD/MD practices. And, I think it really empowers a surgeon to do what they do best and allows the ODS to do what they do best.
It's a really great collaborative model where you can be innovative and efficient and streamline a patient experience. Ultimately, you really do get to expand each doctor's skill set and create a better patient experience overall.
How do you ensure your practice retains profitability and efficiency?
Dr. Mueller: At the end of the day, we're in the cataract game. With cataract numbers going up and cataract surgeon numbers going down, having cataracts as the backbone makes sense.
We both love doing refractive surgery, but there's a lot of ups and downs with that market, even with the recent election cycle. We had one of the worst years in refractive surgery that we've had in 10 years, and so if we were just based upon that, it would be very stressful.
How important is it to find the right physical location for your practice?
Dr. Mueller: I would say location is probably one of the most important things. If I had one location that was really good, but I could only lease the building, versus another location where I could buy it, I would actually choose to lease. I would choose location over ownership because location is so very important.
If you're in the back, tucked away somewhere, and people can't really see you or easily find you, that's just going to completely hurt you in your business. With the location we have, the signage out front is almost like a billboard, and we’re off a very busy street.
You are going to have older patients who are going to be driving, and having them easily find the location is very important, especially when cataracts are your bread and butter.
For young ophthalmologists who are considering opening a private practice, what advice would you offer?
Dr. Mueller: The worst thing you can do is buy too much too soon. Cash is king, especially when you first start out. You need to expect that you will not take a salary from your business for at least 1 year. Financially plan for that, so you can build up the cash reserve you have in the business.
Once you have the cash reserve, you can explore different options for buying equipment. I'm always an advocate of only buying something if you can absolutely afford it at that moment. And so it's very important to hold true to that.
At the end of the day, you, as a practice owner, only make money when everything else is being paid, and so you need to control that overhead very quickly. If you let that overhead get out of control, that's where you're going to get into trouble. And it's also very stressful. So, control the overhead as much as you possibly can.
To download a step-by-step checklist of how to open an ophthalmology practice, check out Lessons in Opening an Ophthalmology Practice with Checklist!
Do you have any closing words of wisdom?
Dr. Mueller: Culture eats strategy for breakfast. You could have the best plan in the world, but if you don't have a good culture, you're wasting your time. At the end of the day, it's all about the people. You must make sure to take care of your people. Also, this world is very small and reputation is very important.
Dr. Miller: Protect your headspace as an owner. Dr. Mueller continues to have mentors and people pour into him, but he's now in a position where he has to actively pour into other people and spread that positive energy and team spirit, creating our practice culture.
That's one of those intangibles. If you are not that person, find someone on your team who can really develop that culture. It’s going to come from the top down. And I would say Brett does one of the best jobs of creating that positive environment and energizing people around him; it's magnetic.
Conclusion
In recent years, industry experts have noted an uptick in the number of ophthalmologists who want to maintain or start an independent private practice.
Reasons cited for this shift included profitability, dissatisfaction with consolidated management, creating a preferred culture, and greater control of care.4 In conclusion, it seems private independent practice is not only still sustainable but preferred by a majority.
