Some doctors opt for business and care

But others find support of large system simpler
By Dorene Weinstein

Fresh out of medical school, Mike Wilde joined the staff in internal medicine at Sanford USD Medical Center six years ago, in part because he liked the support of other physicians.

Other doctors, including Michael McHale of Sioux Falls, prefer working independently. McHale, who specializes in cancer treatment, says practicing alone gives greater flexibility for responding to patients and the control of providing the latest equipment.

In either case, doctors say quality patient care is the bottom line.

In the hotly competitive Sioux Falls medical market, a growing number of independent Sioux Falls doctors are joining together to have more buying clout, better insurance rates and professional support.

So far, about 25 of the city’s 140 private practice doctors have joined the Independent Practice Association. The doctors practice alone or with a couple other doctors and are not part of a large group affiliated with one hospital, although they typically have privileges at all the hospitals in town.

Being on their own allows private practice doctors to respond quickly to patient demands and provide the latest state-of-the-art equipment, independent doctors say. They also aren’t bound by a restricted covenant if they want to leave their current practice, says McHale, 54.

Under noncompete clauses in contracts, doctors for large organizations have had to leave town to practice medicine if they wanted to leave their group.

Organizing an Independent Practice Association helps independent doctors get on more patients’ health care plans and keeps operating costs down for such things as laundry, paperwork and electronic medical records, says McHale, president of the independent group. The IPA adds another layer of support for private doctors, giving them a place to discuss professional issues and offering an identity.

It’s like creating a small version of a large system, except all the doctors retain their independence.

Private practice doctors offer the same amenities and services as large-group doctors, patients and doctors say.

Darcy Lassegard, a social worker, had her doctor for more than 20 years. He was in private practice when she first went to him, eventually was bought out by Sanford and retired last summer. “The quality of service and referral abilities was the same. It didn’t change when he was bought out and moved to MB (Medical Building) II,” she says.

“He was very hands-on in private practice. He held onto those values and practice principles when he became a Sanford doctor,” she says.

Monica Anderson goes to Avera McKennan doctors. She prefers big-system physicians, especially since her cancer diagnosis last year. The referrals were all within the Avera network.

“When it comes to your health, you want as many options as possible, and it helps to feel like someone is looking out for you. I got great care in a frightening situation,” Anderson says.

Private practice doctors will refer within their own web of independents, and patients aren’t responsible for finding their own referrals unless that’s what they want, private doctors say.

Most of the doctors in Sioux Falls are affiliated primarily with one of the two larger hospitals. Sanford Health has more than 360 physicians, and Avera has about 265.

Those doctors have offices, equipment and employees provided by the hospital and generally don’t work in the hospital they are not affiliated with.

Despite working for one of the hospital systems, the doctors have retained many of the benefits of being independent, says Dr. Dan Blue, president of Sanford Clinic.

“There is no buy in or buyout. They are part of the organization and treated as a partner,” he says.

Private practice doctors supply their own offices, equipment and employees. That choice means they must wear many hats.

McHale practices alone, employs about 25 people and has seven outreach clinics in surrounding towns. Last June, he opened a new office building, the McHale Institute on 69th Street and Minnesota Avenue.

He typically sees 30 to 40 patients a day and is on call 24 hours a day for his patients. He’s in the process of recruiting a partner.

You work 40 to 50 hours a week as a doctor, but you also must be a business manager, an accountant, consult with a lawyer and make sure to meet OSHA and EPA standards, says James McGrann, a dermatologist in private practice.

“It’s another full-time job.”

Those added responsibilities that are attractive to some doctors can be overwhelming to others.

“Most doctors are risk-adverse” and prefer the safety of working under the umbrella of a large hospital, says Richard Howard, a plastic surgeon in independent practice and vice president of the IPA. Being alone “is very intimidating to a lot of people.”

Howard considered joining a large system after he finished residency, but it didn’t pan out. The doctors in solo practice have a personality that permits them to be on their own, he says.

Setting up your own practice, building your own medical facility and hiring a team of professionals can be prohibitively expensive. “In 1992, I opened my own practice and didn’t take a paycheck for eight months. I hung out a shingle,” Howard says.

Most doctors coming out of residency “want to focus on being a physician and working with patients and treating patients. They don’t want to deal with the day-to-day business practices and keeping up with regulations and insurance compliance,” Blue says. They choose to go into a large healthcare system rather than open a private practice.

Wilde, an internal medicine doctor at Sanford, never considered going into private practice when he took his first job out of school six years ago.

He has enough independence to run his practice how he likes but has the support of professionals when he needs it, he says.

“From my standpoint, it comes down to an independent physician choice. Do you want to work with business people to provide the best service, or are you more comfortable doing it completely on your own?” he says. “Independent practitioners want to deal with a lot of the business work I don’t want to work with. I choose not to do that.”

Belonging to a large system has other advantages.

“Like any other cooperative, it gives me purchasing power for life insurance and health benefits. I have more power with a big group,” he says.

But the price doctors pay for the benefits of a large system isn’t worth the loss of independence, says McGrann, who has worked with big groups before – first, Central Plains Clinic, and then, Dermatology Associates – before establishing Dakota Dermatology. He has two partners and two physician assistants in his office.

Being a small cog in a big machine can be exasperating, he says. “My main frustration was when I wanted to do something, I had to go to a committee, who pondered it, then took it to another committee and maybe another. It would take two years to get anything done,” he says.

“In private practice, the process goes much quicker. If you want to buy a new piece of equipment or add a new partner, you meet with your partners and make a decision right then. It allows us to stay current; we can provide state-of-the-art treatment and equipment. For example, we were the first group to have the lasers and the first to have a woman dermatologist. We’re able to respond to changes and patient demands quickly, and, ultimately, we can decide what we want to do.”

Private practice doctors say big groups have to meet patient quotas to maintain the machine.

But so do they, says Wilde, 35.

“We all have a number of patients we need to see to achieve and exceed the cost of practicing. It’s a common myth that Sanford Health tells me how many I need to see, and that isn’t correct,” he says. “I can set my own hours and number of patients to see per day. … The administration doesn’t get involved unless I ask them to.”

McHale agrees that private practice isn’t for everyone. “It’s good for me to be here. It’s good for someone else to be in the system. There are enough patients to go around.”

For Howard, 54, it’s worth being independent to determine the future of his practice.

“I don’t want to be known as a Sanford doctor or a McKennan doctor,” he says. “My boss is the next patient that comes in the door.”
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