When patients call North Carolina Medical Associates in Raleigh, which closed last year, a stark recording lists some of the former physicians' names and offers forwarding numbers when available.
Callers seeking Deborah Lewis, M.D., for example, receive a voice mail message: "I am currently looking for an office location and making arrangements to resume practice. When I do resume practice, I will not be able to take HMO insurance. I will update this voice mail as the situation warrants."
When medical groups fall apart, helping doctors keep in touch with their patients can be a nightmare.
In the case of North Carolina Medical Associates, some of the organization's 20 physicians left the state or retired. Others have resumed practice alone or with a small number of partners. Some, like Lewis, are still trying to get back on track.
People in Tucson, Ariz., get similar messages when they call the former Thomas-Davis Medical Centers, a 140-physician group practice that closed in July. Physicians there also have joined other practices, divided along specialty lines or gone back into solo practice.
The scenario of a medical group splitting apart is becoming more common. Consultants say this is happening especially as physician practice management companies struggle to stay afloat and hospital systems rethink their ownership of physician practices. North Carolina Medical Associates and Thomas-Davis were owned by financially troubled PPMs -- MedPartners and FPA Medical Management, respectively -- that decided to shut them down.
But even without outside management, physician groups don't always stay together. Doctors are forming medical groups in record numbers, and a variety of factors can lead them into trouble. When they do fail, the physicians involved face many legal, financial and practical challenges to getting back to work.
"It's hard," says David Adams, M.D., a family practitioner who used to be employed by North Carolina Medical Associates and launched a Cary, N.C.-based solo practice when the group dissolved. "When we were first setting up the new practice, I had five or six meetings a day with contractors, leasing agents, equipment people, lawyers, computer companies," he says. "Mixed in between that, I interviewed staff. I've not had a day off in months."
Adams joined North Carolina Medical Associates in June 1997, feeling lucky to have hooked up with the largest and oldest family practice medical group in the county. After being in a two-physician practice, he wanted to join a larger, stable group of doctors so he could work better hours and hand over administrative tasks to managers, he says.
Physicians who sell their practices or join medical groups as employees are looking for benefits like sharing the expense of running an office and gaining more leverage for managed-care contracts, consultants say.
"The trend is consolidation," says Richard Sanchez, M.D., chief of health practice services at the Pace Group, a Dallas-based consulting firm. "Individual practices are becoming small group practices; then those are becoming larger group practices."
Yet groups may form too quickly, and physicians may not always think things through, says Max Reiboldt, president of the Coker Group, a national healthcare services consulting firm based in Atlanta. Reiboldt teaches courses in dissolving medical groups for the American College of Medical Staff Development, based in Atlanta. "Many medical groups were formed out of a quick response to what were perceived to be the pressures of the marketplace, such as managed care, lowering reimbursement, that sort of thing," he says. "Some of these groups were thrown together, and there was not a common cultural compatibility.
"These individuals were 'married,' and there really wasn't enough of a courtship," Reiboldt says. "When they got into the marriage, it became clear that they really didn't know each other very well."
Until a few years ago, most physicians were in solo practice, and it can be difficult to make the switch to a group practice, says Mary Witt, a manager at the Camden Group, an El Segundo, Calif.-based consulting company. "Physicians traditionally have been independent," she says. "It's hard for them to make the transition from being solo practitioners who made every decision to suddenly being in a group where they have to take others' needs into consideration. It slows down decisionmaking."
Adams says he never got the regular hours he was hoping for. "At least once a week or more, I was in some ridiculous committee meeting that had to do with administrative tasks," he says. "Often that was after hours, at night. It took me away from my family."
Adams' inability to reduce the amount of time he spent at the office illustrates one of the biggest factors that can lead to problems within a medical group: physicians' unmet expectations, consultants say.
When physicians join groups, they may expect -- and organizations may have promised -- more patients, increased income or new information technology tools. When these things don't happen, everyone is disenchanted, Witt says. "If you went in and you had one set of expectations and the other party had another set of expectations and you can't come to some kind of agreement on them, then you're not going to succeed," she says.
The other issue that causes problems is compensation, especially within multispecialty practices, Witt says. "Primary care is not usually reimbursed as highly as surgical specialties," she says. "Yet primary-care physicians are the ones who are referring all of the business to the surgeons. The question becomes, 'How much should primary-care (doctors) be compensated for the business they bring in?' "
The Pace Group, for instance, is working with a group of specialists to determine whether it is feasible for the physicians to separate from a large multispecialty practice, Sanchez says. Hospital-based specialists are generating the majority of income for the group and think they could do better financially on their own. "There have been some real big shifts in the way reimbursement is distributed by payers," Sanchez says. "So with those shifting reimbursement strategies, there has been a lot of stress on group practice partnerships. Compensation is a major issue."
General financial instability also causes groups to fold. For instance, San Diego-based FPA closed several dozen group practices, including Thomas-Davis, after the PPM filed for bankruptcy last year. Birmingham, Ala.-based MedPartners, which closed North Carolina Medical Associates, is attempting to leave the practice management business.
MedPartners now has about 3,500 doctors in its network, compared with a high of more than 11,000 physicians last year. A spokesman says the company expects that number to decline further as MedPartners continues to divest practices. FPA had been affiliated with 22,000 physicians before its bankruptcy filing; current data are not available.
When members of a group recognize that problems exist, the first step is to see if they can be solved, says the Pace Group's Sanchez. "Physicians first have to analyze what's happening and then ask, 'Is it fixable?' It's always easier to fix a problem than to dissolve the group."
Reiboldt says the Coker Group is working with a single-specialty group that may dissolve. The practice, which didn't write a business plan before it started, lacks a group mind-set, he says. Several physicians want to leave because they feel they're not being paid enough. In an effort to avoid a split, the consulting firm is putting together a new compensation program.
"We never point toward dissolving," Reiboldt says. "It takes so much energy to put a group like this together, and there are so many advantages to practicing together, that it is absolutely insane to think about dissolving a group practice once you've gone through all the effort of forming it."
One of the best ways to avoid problems is to put the group together carefully in the first place -- with solid contracts, an agreed-upon business plan and all the financial issues worked out, consultants say.
When a medical group does dissolve, physicians have to deal with many legal and practical issues. For instance, most physicians in group practices have signed noncompete clauses that PPMs may try to enforce. Physicians may have to legally clarify where they can practice.
Patient lists also are a huge issue, Witt says. "The biggest assets of a practice are the patients," she says. "Physicians don't want to lose the patients they've worked so hard to get over the years. So the top area of concern is, 'How do I take those patients with me?' "
The answer depends on what type of agreement physicians made going into the group practice, she says. When physicians sell a practice to a larger entity, they also sell the patient lists. Therefore, they may have to buy them back, Witt says.
After a group practice dissolves, physicians take different approaches to restarting their practices: They might join another large group practice, partner with a small number of doctors in their specialty or open a solo office.
When Thomas-Davis went bankrupt and closed, about 80% of the primary-care physicians jumped into other large group practices, says George Makol, M.D., an allergist and asthma specialist who used to practice at Thomas-Davis. But specialists didn't have that option, he says. "Specialists mostly went into their own practices and in some cases joined other people in the same specialty.
Our neurologist went across town and joined six other neurologists."
Makol decided to join another doctor and open the two-physician Alvernon Allergy and Asthma practice in Tucson. He stayed in the same building; rounded up furniture from other offices that had closed; bought a fax machine; and hired a lawyer, a practice management consultant and a company that does all his billing.
"It only took us two days to set up," Makol says. "When I was in solo practice in 1982 for three years, no one was there to help you. Today there are people who will help set up your practice. There are people who will do your billing.
They all cost money. We paid the consultant $5,000 initially to get everything going. Now he keeps track of all our finances for $400 a month." The billing company takes 7% of the money it collects, he says.
Five months after launching the new practice, Makol is seeing close to 80% of his previous patient load. Still, he had to scramble to get insurance companies to recredential him, and some have not yet done so. He's also struggling to recreate medical records, some of which primary-care physicians took with them when they moved, he says.
"We've had a lot of trouble getting the primary-care physicians to send us our allergy records out of their records," he says. "But I'm a detail person, and I have been reconstructing them. If a patient tells me they had a procedure done at the hospital last year, I have them sign a release. I send it to the hospital and get the records."
The hardest thing so far has been the emotions tied to seeing Thomas-Davis close, Makol says. "It was started in 1920, so to see it disappear after more than 70 years was very difficult.
"I miss it. I miss the meetings with all of the other doctors. I miss the fact that I got referrals from all over the state because the clinic stretched out so far. Even the politics. Sometimes that was fun, and sometimes it wasn't, but I miss that kind of stuff."
MargaretAnn Cross is an Allentown, Pa.-based freelancer who frequently contributes to Modern Physician.