How independent physician associations can make private practice more profitable

Hans Yu, DO, and medical administrator Malcolm Lee work together in an independent physician association (IPA), which aims to provide better reimbursement for private practice physicians who serve their patients in a cost-effective way.

Dr. Yu, an internal medicine doctor of over 30 years and chair of the board for All American Medical Group (AAMG), notes that physicians wear many hats. “The science aspect of medicine allows us to practice medicine, but over time, medicine cannot survive without business,” he says.

With a background in real estate and the finance industry, Lee eventually became chief administrative officer of Access Primary Care Medical Group while also sharing his expertise with the AAMG. In our conversation, Lee shared the business strategies he has employed to help keep doctors, doctors.

In this edited Q&A, Dr. Yu and Lee also share tips on how independent physicians can improve reimbursement and why working in private practice is more satisfying than one may think.

What common goals do you both have in the fields of medicine and business?

Lee: As an administrator, I advocate for physicians while also ensuring that patients are having their health needs met. One way I do this is by finding better contracts for physician reimbursement from the health care plan and ensuring that that plan meets patient needs. I then figure out how the revenue can come back to the IPA. Physicians don’t have much of a voice when working independently in a clinic. However, when we unite them together, they have more purchasing power and negotiation strength.

Dr. Yu: My goal is to preserve private practice. Within an IPA, doctors are allowed to express their ideas on how to practice medicine and the administrator, Lee, helps guide their ideas toward a business plan that is reasonable. This model collectively runs the business side while also allowing doctors to be doctors.

What makes IPAs unique?

Dr. Yu: Unlike medical groups where they bill together and practice under the same protocols as one unit, the IPA allows the “freedom” to practice medicine from different private practices or medical groups within the IPA. Each practice or medical group has their own set of protocols within the standard of care, and they bill separately. Some IPAs can have joint buying power and negotiate together with health plans to get more favorable contracts for the doctors within the IPAs. It’s similar to a labor union in that the IPA can assist independent doctors in negotiating contracts, recruiting new clinicians to their practices and setting up standards of care.

Lee: Physicians of different subspecialties can join IPAs as well, which can make the IPA stronger and enable it to better serve patients and the community. This gives primary care physicians a broad network of subspecialties they can refer patients to.

What are the challenges of having an IPA?

Lee: Recruiting physicians of different specialties is a challenge due to a shortage of physicians in some specialties.

How can physicians maintain longevity in private practice? How do we preserve private practice as an option for future physicians?

Dr Yu: Most physicians end up in a foundation model, like an employment model, and physicians agree on a salary. We also see government agency-associated clinics that are non-private employment models. Are they better in terms of patient care? In my opinion, no, because they have a conflict of interest to “follow the rules of the company.” Patient advocacy is our primary goal in private practice. In order to maintain private practice, we need to inform new physicians—recently out from post-graduate training—that there are alternatives to the employed model of practicing medicine. We need to educate them on “how to” survive in the private sector. As an IPA, we have to figure out ways to incentivize and reimburse new doctors entering private practice.

You hear about administrators who often consider doctors to be expendable, especially in a foundation model. If they are not following certain guidelines or are not financially favorable to the “company,” administrators can easily get rid of them. We should not see doctors as expendable, but rather educatable, and we can guide them on how to do private practice successfully. When doctors join together in an IPA, they can work together to figure out how to achieve the common goals of the group.

Do you have any tips on improving reimbursement?

Dr Yu: IPAs contract with different health plans and the health plans provide benchmarks. If physicians meet these benchmarks from the health plan, they will be reimbursed more. Physicians with the IPAs will make sure patients complete their health care screenings, vaccinations, wellness checkups, etc. Furthermore, our physicians inform health plans of their patients’ Hierarchical Condition Categories (HCC). The HCC determines the illness severity of patients, and health plans will increase reimbursement to physicians who are caring for these patients.

What does your IPA do to improve physician morale and give back to the community?

Dr. Yu: We have taken steps, such as via our EHR, to integrate our network and workflow. We try to address burnout and wellness. We assist older doctors in their transition to retirement. We work to improve and negotiate reimbursement. We do community service; not all IPAs do this, but we volunteer and give community health lectures, participate in health fairs, educate the community on preventive care, etc. Doctors are not only healers, but we are also teachers.

Lee: Many of our IPA physicians are also mentors to younger physicians, showing them the different avenues they can pursue with their physician degrees.

Dr. Yu, how do you manage your time between running your own practice and being a board chair of AAMG?

Dr Yu: I wish we had a 10-day week instead of seven days, so that I could finish charting in a timely fashion and complete my administrative responsibilities to meet deadlines. In the past, I used weekends to see rescheduled patients. Now I block off one week every month so I can move patients around to schedule meetings, administrative tasks and holidays with family on a “PRN” schedule.

Any last words?

Dr Yu: The grass truly is greener in private practice. Even though we are busy, we plan our own schedule. If I think this patient needs half an hour, I will make time.

Lee: Having autonomy is so important in any career. I used to work for a corporation, and between the hours of 9 and 5, I was tied to my office and couldn’t leave. Being self-employed, I can now set my own schedule. I see the same for my wife, who works as a primary care physician in private practice.

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