In 2012, the number of doctors fell 14 percent, to 91 physicians in December, while revenue declined nearly 13 percent, to $53.8 million. To stop the defections, WellGroup filed suit against two doctors who said compensation cuts prompted them to jump to Advocate Medical Group, the largest practice in the Chicago area, with $876 million in revenue in 2011.
The breakup will allow Specialty Physicians of Illinois LLC to “compete in the market for every patient out there,” said Dr. Daniel McCormick, who is president of practice and the former president of WellGroup. “We don't need to be associated with Franciscan Physicians Network to have patients.”
Specialty Physicians now has 47 physicians, including six who've come on board since the break up, said a spokesman for the practice, which includes oncologists, cardiologists and immunologists. The group will look to independent physicians for referrals.
Dr. McCormick said the change in structure wasn't sparked by the loss in doctors. It was a “strategic decision” to grapple with a model for health care compensation that is changing to reward providers who keep populations healthy rather than compensate them for providing more healthcare services, he said.
WellGroup was “concentrating on high volume care when the revenue was there,” he said. “To stay in that space would be a mistake.”
The split up reflects a marked change in structure from most large physicians groups, which typically comprise both primary care doctors and specialists to so that primary care doctors to feed the specialists with referrals.
“It's a realignment of priorities, and it's driven in a large degree by differing reimbursement models beginning to surface,” said David Seaman, CEO of Pronger Smith Medical Care LLP, a Blue Island-based physicians group with nearly $60 million in revenue in 2011.
Pronger Smith continues to employ both specialists and primary care doctors in the same group.
“It's kind of like hockey: You're playing to where the puck's going to be, not to where it is,” he said. “Everybody's got a little bit different vision as to where that puck is.”
WellGroup's 44 primary care doctors have joined Franciscan Physicians Network, a 700-doctor group of specialists and primary care doctors who mostly have offices in Indiana. The network is owned by the Franciscan Alliance, with $1.3 billion in revenue in 2011.
A spokeswoman for Franciscan Alliance did not return a call seeking comment.
In June, WellGroup filed suit against gynecologist Dr. Edward Del Castillo to enforce a noncompetition agreement.
The case was settled in January, but terms of the agreement are confidential, Dr. McCormick said.
WellGroup's lawsuit against internist Sanjeev Joshi is still pending. Dr. McCormick and a spokesman for Advocate declined to comment on the case.