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Democratic Group Practice Section Newsletter - September 2009, Vol 3, #1


circle_arrow Democratic Group Practice Section Meeting at Scientific Assembly
circle_arrow From the Chair
circle_arrow How to Keep the Democratic Group Practice Model Viable in the Future
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Democratic Group Practice Section Meeting at Scientific Assembly

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Make plans to attend the
Democratic Group Practice Section Meeting! 

Tuesday, October 6, 2009

12:00 pm – 2:00 pm

Room 251, Convention Center

Come join your colleagues to discuss the issues most pertinent to democratic groups. Special thanks to CEP America for sponsoring lunch.

Be sure to check the schedule on-site as meeting times and location could change.


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From the Chair

Ted Kloth, MD, FACEP

klothWhat better place to have the next meeting of the Democratic Group Practice section than at the site of The "Boston Tea Party"? So on October 6, 2009, in room 251 of the convention center at the Scientific Assembly in Boston we will be able to talk more about how we might be able to populate the ED world with groups who do not take advantage of their physicians, that give them a real voice in their practice, and offer an equal ownership of their practices and the businesses that serve them. In addition, we might want to talk about ways to help them survive in this era where more and more is expected and demanded of ED physicians by hospital administrators. We will, of course, talk about whatever the group feels is worthwhile in an open agenda. 

It seems that administrators have been doing quite a bit of networking, and having been exposed to high performance EDs, are now expecting that same performance from their own EDs. Unfortunately, many single hospital groups, of which many are democratic, often have fewer resources to compete. Dr. Wesley Curry, CEO of CEP America, thoughtfully addresses this issue in this newsletter. 

This year, stemming from discussions at last year’s section meeting, a small subcommittee, led by Michelle Gill, MD, and myself, with the terrific help and guidance from Margaret Montgomery, the Practice Management Manager from ACEP, worked on a project to assist new resident graduates and emergency physicians seeking a new employment opportunity, particularly in a "democratic" group.  

Before we could inform them however, we needed to know if all democratic groups are the same and if they are different, in what ways. We developed a questionnaire that we hoped would help distinguish the differences within democratic groups. First, responses were anonymous. Second, it was not a scientific study and third, there was no lie detector electric shock system to verify responses. However, that being said, we learned many things which were different between groups and which of these attributes should be explored when seeking new employment. 

While EMRA has developed a list of interview questions for their members, the responses to the questionnaire led to the development of additional interview questions that could be helpful to those interviewing with a democratic group. 

Now for more about the questionnaire, the questionnaire was sent to the medical director of 238 emergency medicine practice groups who indicated their group was democratic. We had approximately 80 responses to each question. Only about 12% of the democratic groups had more than 50 members. 58% of the groups staffed one hospital while 26% staffed 2-4 hospitals. Only 25% of the democratic groups said that all of their physicians were partners and another 50% said they had partners and employees. Many answers were similar across the board but several questions brought out interesting results and when cross referenced, elicited even more questions than when we started. For example, while a vast majority of respondents said that all partners could attain equal vote and ownership in their group and about 80% had an elected governing board, only 60% said that governing board had control of the finances of the group! Moreover a significant minority described situations that indicated less than full transparency of the group’s operations.

  • Twelve percent said the governing structure of the group was not available in writing and available for new members to review.
  • Twenty-four percent indicated that the governing body did not have control over policy decision-making in the group.
  • Fifteen percent responded that members have access to a clearly documented due-process procedure.
  • Eight percent reported that not all members of the group can review the group’s financial statement. 

While there are different structures, and there may be legitimate explanations for these answers, they certainly seem to be areas that new hires might want to explore. 

Another very interesting result was that while 9% offered no malpractice insurance coverage, of those that did, 29% did not offer tail coverage, providing a HUGE roadblock to switching groups should that opportunity or need present itself. Ten groups that responded yes to the question, "Do the owners of the medical group have ownership in the other entity" that provides practice management or other services, 7 said they did not offer that ownership opportunity to the partners of the democratic group. As the survey was again anonymous, the size, location, and other characteristics could not be correlated with these answers but they do make one think. 

As a result of the compilation of responses, we crafted some questions that new applicants might want to address in addition to the list of questions that EMRA has already developed. They include: 

  1. Do all physicians work the same number of days, nights, weekends and holidays? If not, how are shifts allocated?
  2. If I leave, am I covered for malpractice for the patients I saw when I was in the group? Who pays for that malpractice tail coverage?
  3. Are the financial statements of the group available for review?
  4. Is there a clear path to full partnership/ownership of the physician group? Are there written terms that define what the prospective new partner must do/demonstrate to be taken into the partnership? Who makes the decision on whether and when one becomes a partner?
  5. Is there a financial contribution "buy-in" required? How much?
  6. Does full ownership include ownership of the company (or companies) that provides services the group is required to purchase? (eg, Billing Company? MSO? Malpractice?)
  7. Is the latter ownership available to me? At what cost?
  8. Does the group have a written mission, vision, values statement and do they engage in periodic strategic planning? Are prospective owners included in the strategic planning process?
  9. Can you work for competing groups and become a partner?
  10. Is the prospective new partner welcome to attend group governance and management meetings?
  11. Talk to someone who has been there for a year or 2 to find out if what was promised was delivered 

At this time we are hoping to have additional cards for the residents at EMRA that will include some of these questions. Thank you all for your support and contributions to this process. 

We look forward to seeing you again at Scientific Assembly in Boston. Please come and bring your friends! 

Free lunch! (Please RSVP to Margaret Montgomery if you know for sure you will be coming to help us with the lunch count.) Thanks. 

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How to Keep the Democratic Group Practice Model Viable in the Future

Wesley A. Curry, MD, FACEP

It has only been a few years since an urgent call went out to ACEP members in "democratic groups" to help save the democratic group section from decertification. I was astonished this could be happening in our association of emergency physicians which represents all states in the country. ACEP is the standard bearer for our specialty in practice management, clinical, legislative, and education issues representing over 28,000 emergency physicians. I also wondered why there has been so little interest in the section from other ACEP members, even though this practice model is "arguably" the most popular and desired type of emergency medicine practice for the vast majority of new residency grads as well as emergency physicians who have been in practice for many years.  

The reason I say arguably is that apparently what is "democratic" is defined in many ways, as is the term "physician owned." Being in a "democratic" group can be both professionally and personally satisfying as a career destination, if you can find one that compensates well and is where you want to live. Therein lies the problem, such career opportunities are rare, and in my experience such practices will have a difficult time maintaining viability in an increasingly complex and management resource intensive practice environment, especially if the trend of attrition in single hospital groups cannot be reversed, and more specifically the democratic group practice model. 

I am a veteran of many emergency physician practice transitions and start ups in multiple states. My experience is that single hospital groups in general, are rarely the choice of hospitals any more when they look to change emergency physician groups. While there still are many successful single hospital emergency physician groups, some of them operating as a "democratic" group, do not tend to compete against the larger regional and national emergency physician staffing companies for new contract opportunities in nearby geographic areas. Age, disability, accidents and death will eventually claim the leadership of more and more single hospital emergency physician groups. Hospitals are reluctant to give the exclusive emergency services contract to often highly respected clinical physicians with no proven management experience, financial viability, and group structure. Hence, larger physician groups that do not use a "democratic" practice model established their own preferred practice model, leaving fewer practice locations that can be characterized as any variety of democratic group practice. Indications are that this trend will only accelerate in the future. 

Why are more "democratic" group practices not being formed today? Given human nature in a capitalistic society, emergency physicians who have an opportunity to control the cash flow at the top of one or more emergency physician practices will act in their own self interest and keep control. They pay the other emergency physicians a salary or percent of their collections and have little or no interest in creating a "democratic" emergency physician group, in what ever variety that loosely fits the definition. Often such contract holders can be quite fair with the schedule and compensation matters, but others clearly are not. Likewise it is clear that the first priority of most emergency physicians is total compensation and practice location. For many career emergency physicians however if the money and location is attractive enough, most will never question the opaque nature of the financial practices of the group owner(s). Unless of course they get squeezed hard enough by the contract holder who wants to maintain their own profits and/or cash flow. When this happens they either leave or begin to seek more input into governance and compensation matters. 

To be fair, investor owned, single physician owned, hospital employee, or practices owned by 2-3 or more physicians, and other models have very logical and legitimate reasons to exist. Hospitals don’t really seem to care about physician group structure. No amount of criticism really changes anything, except in aggregate, single hospital groups appear to be fewer in number each year. Much has already been said by others about each of these practice models, and the characterization of the pros and cons of each. I do not care to add to that debate. I do think however, that few have asked about or studied the questions about the trends in practice models today, and which practice models are likely to dominate the specialty in the future. 

There is ample anecdotal experience that the democratic group model is on its way to extinction in some areas of this country. Where then, is the urgency to share best practices and collaborate on how to keep this practice model viable and a significant percentage of all emergency physician practices nationwide? We need to take time away from debating the definition of a democratic emergency physician group, how they govern, structure the group, or how the pathway to full shareholder or partnership status is determined. We should be asking how democratic group practices can stay relevant in an increasingly complex practice environment for emergency medicine, where the future of emergency physician practice groups will likely be dominated by 5 to 10 national emergency physician staffing groups. In a word, those who want to see democratic group practices remain relevant in the future, should focus less on defensive measure, and go on the offense and help themselves and other like minded emergency physicians to compete for new practice opportunities. In order to be considered a relevant group practice model democratic group practice should represent about 20-40% of all practice locations in the nation 10-15 years from now. 

We should be exploring how independent democratic practices of all varieties large and small can form management support partnerships, to retain the single hospital emergency physician practices that exist today, and to prevent further attrition of the democratic practice model. In addition, large and small democratic emergency physician groups should find ways to create symbiotic relationships which can help retain single hospital practices and help win competitions for new practice opportunities to expand the numbers "democratic" group practices in every state. 

Democratic groups of every variation must take the admonition of Ben Franklin "We must, indeed, all hang together or, most assuredly, we shall all hang separately" and our unique physician practice model will become extinct one day. That is a tragedy we cannot afford to let happen. 

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This publication is designed to promote communication among emergency physicians of a basic informational nature only. While ACEP provides the support necessary for these newsletters to be produced, the content is provided by volunteers and is in no way an official ACEP communication. ACEP makes no representations as to the content of this newsletter and does not necessarily endorse the specific content or positions contained therein. ACEP does not purport to provide medical, legal, business, or any other professional guidance in this publication. If expert assistance is needed, the services of a competent professional should be sought. ACEP expressly disclaims all liability in respect to the content, positions, or actions taken or not taken based on any or all the contents of this newsletter.

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