Independent physician groups join forces, go 'the other way'

As the regulatory environment, technology requirements and overhead costs force independent docs to consider selling or joining larger systems, two independent physician groups in Northeast Ohio are looking to push back against that trend.

Premier Physicians Centers and Jubilee Healthcare, which does business as NorthShore Healthcare, are joining together in a merger they say aims to improve clinical quality, patient care and access to providers.

"More and more independent practices just can't hold on anymore, and they end up selling," said John Lin, president of NorthShore and the new CEO of Premier. "So that's the general trend in most cities in America. I think we didn't really get that memo, because we're investing and going the other way."

Premier and NorthShore will spend the next several months working through the transition to functioning under one entity, holding the Premier name. They are not disclosing financial terms of the move. Lin notes that the partnership is about growth and said he does not expect staffing cuts.

Having an independent physician network is valuable both to the market in general, as well as to the patients, who long for a close bond with their health care provider, just as doctors do, Lin said. The highly personalized care that the organizations aim for "is harder when you are small and don't have scale," he said.

Lacking the IT and management infrastructure it needed, Premier had been looking for a partner for the past couple of years, said Dr. Tony Paras, president of Premier. The 23-year-old company has grown from a handful of doctors to about 100 providers, 70 of whom are physicians. NorthShore, which began last year, is the single biggest addition in Premier's history, and will bring its total to 111 health care providers and 492 employees.

NorthShore was the perfect complement with Lin's business acumen, IT expertise and management and financial resources, Paras said. Combining the two creates a space for physicians who want to practice independently, but are intimidated by or unable to fund the administrative and overhead costs of running a business.

"There's a lot of pent-up demand of physicians who have dreams of something different and something unique and something entrepreneurial, but (they're) not sure because of all the risks involved," Lin said. Bringing on NorthShore puts Premier in a good position to provide that option, to offer physicians the resources, infrastructure and support needed to let them focus on the medicine and care, he said.

In 2000, 57% of physicians were independent, but that was on track to drop to 33% by last year, according to a 2015 independent physicians survey — the most recent available — from Accenture, a company that offers services in strategy, consulting, digital, technology and operations.

A challenging market for doctors to practice independently is a big factor in that drop, Paras said. The new Premier will offer choice to those doctors as well as to patients who may be intimidated by or otherwise uninterested in larger institutions, he said.

The model allows doctors to practice "without the burden of bureaucracy," said Ray Marvar, general counsel at Premier.

Lin and Paras both stress that the independent model brings quality, lowers cost and allows for a more personal patient-doctor relationship. The merger will help to broaden the geographical footprint for Premier, which has largely operated on Cleveland's West Side. Today, the combined entities provide services — a large primary care base and a range of medical specialties — from Sandusky to Painesville.

Paras said Premier will continue its close relationships with systems in the region.

Entrepreneurship is in this country's DNA, and in health care, it is especially vital, Lin said. "When the pendulum has swung so far, we just feel like time is ripe to almost do the opposite, meaning to invest in our independence."

"Independent physician groups join forces, go 'the other way'" originally appeared in Crain's Cleveland Business.