Solo physicians feeling the heat from health giants

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Dean Pollack, an obstetrician and gynecologist based in Shadyside for nearly 30 years, got a note last year to pick up the new physician referral directory for Highmark’s Allegheny Health Network.

As he scanned his copy, the first thing Dr. Pollack noticed was that AHN-employed physicians were listed first, in alphabetical order. Those names were followed by a list of “affiliates” — independent physicians like himself with admitting privileges at AHN hospitals.

The second thing he noticed was that his own name was nowhere to be found, despite a long history of delivering babies at AHN’s West Penn Hospital in Bloomfield as well as UPMC facilities.

While the omission of Dr. Pollack’s name may be an oversight — he said his phone calls to find out what happened went unanswered — there can be no mistake about the more prominent listing of Allegheny Health doctors.

“It sounds like, ‘You know, you’re on the list but you’re really not one of us.’ ”

Independent physician practices — already threatened by high malpractice premiums, declining insurance reimbursements and the costly prospect of acquiring and maintaining electronic health records — are now under even more pressure due to the growing number of physicians selling their practices to a hospital or health system.

The Pennsylvania Medical Society estimates that only about 30 percent of the state’s physicians remain independent — about half the percentage of 15 years ago.

“They’re being squeezed and for different reasons,” said attorney Mike Cassidy, who heads the health law practice group for the Tucker Arensberg law firm, Downtown.

“The specialists are being squeezed because so many of their referral sources are now employed. So, in order to stay in the referral loop, they believe they need to be in one camp or the other,” he said.

“The primary care doctors are being squeezed because the reimbursements in Western Pennsylvania are uniformly low.”

Getting left out of a directory, or being relegated to a less prominent placement, may seem an innocuous slight to outsiders, but it strikes at the lifeblood of an independent doctor.

Both organizations, AHN and UPMC, have “overwhelming resources, where independent physicians don’t have those types of resources,” Dr. Pollack said. “My practice can only grow by patient referral. I’m not putting my face on billboards and advertising my services as the big guys do.”

He likes being an independent, solo practitioner, even with the expected havoc and long hours that come with delivering 60-90 babies each year. “I feel like I can practice medicine like a physician, instead of like an assembly line physician.”

But fewer and fewer of his colleagues are willing to take that path.

“I can’t imagine a one- or two- or even three-physician practice trying to do it on their own,” said Mark Kissinger, executive director of Genesis Medical Associates Inc. of Ross, the North Hill’s largest independent practice with 17 primary care physicians in 10 locations.

Genesis physicians work extensively at UPMC Passavant Hospital, and Mr. Kissinger said UPMC officials approached the practice with an acquisition proposal in the latter half of 2013. It was no small decision, he said. UPMC was offering “a very significant” amount of money and guaranteed salaries for 10 years in return for the referral business.

Mr. Cassidy explained that a typical physician employment contract includes a clause requiring the doctor to refer all patient services within that system except in specific circumstances such as medical necessity or a patient’s stated preference to go somewhere else.

From a consumer’s perspective, Mr. Cassidy said, an employed physician “theoretically” could make referrals based on that contractual requirement “rather than based on the physician’s belief on who is the best quality.” He emphasized, however, that is only a theoretical risk.

“It’s unlikely that someone is going to be referred to a substandard doctor at UPMC.”

Dr. Pollack does see a real downside for patients, though.

Because setting up an independent practice has become so expensive, he said, more medical school graduates are opting for employment with its accompanying guaranteed salary and none of the administrative hassles or overhead costs.

Hospitals “are hiring young doctors for not very much money, with much less experience. They’re knocking out the experienced physician.”

Mr. Kissinger said the Genesis physicians gave considerable thought to UPMC’s offer to buy their practice last year. Like every other independent practice, they’re waiting to see how the ongoing disagreement between Highmark and UPMC plays out.

If there’s no contract, Mr. Kissinger said, they expect many patients with Highmark insurance will seek care at Allegheny General Hospital instead of out-of-network UPMC Passavant, making it less convenient for their doctors to see their hospitalized patients. Signing on with UPMC would eliminate that complication.

They also considered the financial implications: Walking away from guaranteed salaries meant they would be relying on uncertain government reimbursements in a health care financing environment that seems to shift every few months.

“But our physicians sat around the table and, after lots and lots of discussion, we decided, ‘Nah, we’re not for sale.’ ”

Steve Twedt: or 412-263-1963.

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