WEBVTT - The Doctor, the Patient, and Everything in Between 0:00:07.320 --> 0:00:09.799 For a lot of companies in the business of providing healthcare. 0:00:09.840 --> 0:00:14.520 These days, it seems bigger is always better. For decades, 0:00:14.720 --> 0:00:18.720 the industry has been consolidating. Health insurance companies have merged 0:00:18.760 --> 0:00:22.720 into big conglomerates that also own doctor and pharmacy businesses. 0:00:23.640 --> 0:00:27.960 Hospitals have gloamed together into big regional systems. They've gobbled 0:00:28.040 --> 0:00:30.800 up physician groups too, So there's a good chance your 0:00:30.840 --> 0:00:36.440 local doctor works for a giant health system. More doctors 0:00:36.520 --> 0:00:39.920 worked as salaried employees than as owners of their own practices, 0:00:40.200 --> 0:00:44.080 according to a survey from the American Medical Association. That's 0:00:44.200 --> 0:00:51.040 never happened before. Welcome to Prognosis, bloom Brigs podcast about 0:00:51.040 --> 0:00:54.320 the future of healthcare. I'm your host, Michelle fake Cortes. 0:00:55.720 --> 0:00:58.800 For both patients and their doctors, what happens in the 0:00:58.840 --> 0:01:02.960 exam room is in recently influenced by big bureaucracies they 0:01:03.000 --> 0:01:06.760 don't understand and they can't control. This has left a 0:01:06.760 --> 0:01:10.479 lot of patients unsatisfied and a lot of physicians burned out. 0:01:11.400 --> 0:01:15.000 But some doctors have said enough. Here's Bloomberg News health 0:01:15.040 --> 0:01:17.679 reporter John Tazzi with the story of one group of 0:01:17.720 --> 0:01:28.039 doctors in North Carolina who took a different path. In Charlotte, 0:01:28.040 --> 0:01:31.560 North Carolina, a pair of big hospital systems dominate the 0:01:31.600 --> 0:01:36.000 local healthcare market. The biggest, Atrium Health, is a powerhouse. 0:01:36.400 --> 0:01:39.000 Its annual revenue is more than twice as much as 0:01:39.080 --> 0:01:43.240 its largest rival. Atrium has dozens of hospitals in three states, 0:01:43.560 --> 0:01:47.600 thousands of doctors, and tens of thousands of employees. A 0:01:47.640 --> 0:01:50.120 few years ago, a group of doctors who worked for 0:01:50.160 --> 0:01:54.840 Atrium did something unprecedented. One day in the fall of seen, 0:01:55.120 --> 0:01:58.720 cardiologist Dale Owen and his colleagues walked into a meeting 0:01:58.760 --> 0:02:03.000 with hospital managers and said they wanted a divorce. They 0:02:03.040 --> 0:02:06.520 wanted to become an independent group. Dale told me about 0:02:06.560 --> 0:02:09.600 it recently at his office in Charlotte. Well, they looked 0:02:09.639 --> 0:02:14.440 at us like they were incredulous, you know, like, um not, 0:02:14.720 --> 0:02:18.120 how dare you? But it was so far into them, 0:02:18.200 --> 0:02:21.280 It's like outer space. How how could anybody conceive of 0:02:21.360 --> 0:02:25.480 such a thing? Dale and eight seven other physicians in 0:02:25.480 --> 0:02:28.040 the medical group were breaking up with atri m Health, 0:02:28.320 --> 0:02:30.880 the hospital system that they worked for, and I owned 0:02:30.919 --> 0:02:34.400 their practice. They told the hospital leaders that they wanted 0:02:34.440 --> 0:02:38.040 to be independent. I'll never forget They said, what do 0:02:38.080 --> 0:02:42.440 you mean by independent and and how does that really 0:02:42.480 --> 0:02:47.480 look in your mind? Well, completely separated? Well, wouldn't you 0:02:47.520 --> 0:02:49.440 like to be part of this with us and this 0:02:49.639 --> 0:02:52.160 with us? No, we really want to just be independent. 0:02:52.480 --> 0:02:55.760 This was a big deal. For years, the health care 0:02:55.760 --> 0:02:59.079 industry has been moving in the opposite direction. It's become 0:02:59.160 --> 0:03:02.440 more consigned. I dated, hospitals have emerging with each other 0:03:02.520 --> 0:03:05.520 to form big health care systems. They've been buying up 0:03:05.560 --> 0:03:09.600 doctors groups and outpatient clinics. The number of physician practices 0:03:09.600 --> 0:03:12.680 owned by hospitals more than doubled between twenty twelve and 0:03:12.680 --> 0:03:18.400 twenty eighteen. You've probably noticed this in cities across the 0:03:18.440 --> 0:03:21.760 United States. The banners of big hospital systems have spread 0:03:21.800 --> 0:03:24.680 to more and more neighborhood clinics and outpatient centers. As 0:03:24.680 --> 0:03:29.000 health care systems expanded their footprints. It was unheard of 0:03:29.160 --> 0:03:31.400 for a big group of doctors to split from their 0:03:31.440 --> 0:03:35.840 hospital system owner. And Dale's group was big, about ninety doctors. 0:03:36.840 --> 0:03:39.240 They took care of more than a hundred thousand patients, 0:03:39.280 --> 0:03:41.600 about one out of every ten people in the county. 0:03:42.360 --> 0:03:44.560 The reason this was such a big move goes back 0:03:44.600 --> 0:03:48.400 to when Dale was first getting into medicine. Dale joined 0:03:48.400 --> 0:03:52.320 the practice. It was around this time that Americans were 0:03:52.360 --> 0:03:54.600 getting more and more concerned about the rising cost of 0:03:54.640 --> 0:03:58.360 medical care, and health insurance companies responded by putting new 0:03:58.400 --> 0:04:02.080 limits on how much they would pay. And it really 0:04:02.160 --> 0:04:05.560 came down to the fact that there was such financial 0:04:05.640 --> 0:04:10.080 pressure on the group as a whole because of decreased 0:04:10.600 --> 0:04:16.280 reimbursement rates, the doctors agreed to sell their practice to Atrium. 0:04:16.360 --> 0:04:19.760 Dale voted against selling, but he understood why his colleagues 0:04:19.800 --> 0:04:23.760 had a different view. The insurance rates remuneration was going 0:04:23.839 --> 0:04:27.960 down substantially, and it puts such financial pressure on our 0:04:28.000 --> 0:04:32.599 group as it did others, that it forced physician groups, 0:04:32.600 --> 0:04:37.719 independent groups especially to seek refuge with another entity. And 0:04:37.760 --> 0:04:41.640 the hospitals were the ones who raised their hands. This 0:04:41.720 --> 0:04:44.640 was part of a trend towards consolidation in healthcare that 0:04:44.720 --> 0:04:48.440 really hasn't stopped. There have been more than six hospital 0:04:48.520 --> 0:04:52.080 mergers in the past twenty years. Many local markets became 0:04:52.120 --> 0:04:55.640 dominated by a handful of big health systems. One study 0:04:55.720 --> 0:04:59.479 found that more than of metro areas had highly concentrated 0:04:59.480 --> 0:05:04.320 markets for hospital care in and that's left hospitals with 0:05:04.400 --> 0:05:07.159 a lot of power when it comes to negotiating prices. 0:05:07.760 --> 0:05:11.120 Here's Austin Fract, a health economist affiliated with the Department 0:05:11.120 --> 0:05:15.720 of Veterans Affairs, Boston University and Harvard. They can just say, well, 0:05:15.960 --> 0:05:20.240 we want, you know, more than last year, or we're 0:05:20.279 --> 0:05:24.200 not joining your network, and UM, in many cases, UH 0:05:24.360 --> 0:05:28.039 plans can't can't say no because it's either the only 0:05:28.040 --> 0:05:30.440 game in town or the major game in town. UM, 0:05:30.640 --> 0:05:34.560 and they're members, you know, they obviously need to have 0:05:34.640 --> 0:05:36.760 the hospital in their network, they need to see doctors, 0:05:37.080 --> 0:05:40.719 and so they're kind of over barrel. A lot of 0:05:40.720 --> 0:05:44.080 economists who have studied hospital mergers say they tend to 0:05:44.200 --> 0:05:48.400 lead to higher prices. The hospital industry argues that bigger 0:05:48.440 --> 0:05:51.920 health systems can be more efficient and deliver higher quality care. 0:05:52.720 --> 0:05:56.240 They can reduce fragmentation and coordinate between primary care doctors 0:05:56.240 --> 0:06:00.120 and specialists, all of which can benefit patients. But some 0:06:00.160 --> 0:06:03.040 big hospital systems have been accused of using their market 0:06:03.080 --> 0:06:07.640 power unfairly. That includes Atrium, the system where Dale worked. 0:06:08.480 --> 0:06:12.159 In the Department of Justice filed a civil antitrust lawsuit 0:06:12.279 --> 0:06:16.000 that accused Atrium of blocking health insurers from steering patients 0:06:16.040 --> 0:06:20.279 to less expensive hospitals. The government said that the restrictions 0:06:20.560 --> 0:06:25.479 quote reduced competition, resulting in harm to Charlotte area consumers, employers, 0:06:25.520 --> 0:06:30.440 and insurers. In a settlement two years later, Atrium agreed 0:06:30.520 --> 0:06:35.200 to modify its contracts without admitting to any wrongdoing. Atrium 0:06:35.240 --> 0:06:38.200 declined to comment on the settlement. In a statement, the 0:06:38.279 --> 0:06:42.760 company said that quote Atrium Health prides itself on delivering 0:06:42.800 --> 0:06:45.640 the best health care to our patients and communities close 0:06:45.720 --> 0:06:49.320 to home. With strong roots in this community, Our patients 0:06:49.320 --> 0:06:52.560 in Charlotte and the surrounding areas have trusted us with 0:06:52.720 --> 0:06:56.280 their health and the care of their family members end quote. 0:06:56.800 --> 0:06:59.960 Atrium is still the dominant hospital system in the area 0:07:00.040 --> 0:07:03.800 out and in recent years, as hospitals and insurance companies 0:07:03.960 --> 0:07:07.719 became bigger and more powerful players in the health care system, 0:07:07.760 --> 0:07:11.160 a lot of doctors felt this distance growing between them 0:07:11.240 --> 0:07:15.080 and their patients. They both felt that the big bureaucracies 0:07:15.120 --> 0:07:18.480 of health systems and insurance companies were driving up costs 0:07:18.760 --> 0:07:24.000 without improving care. We have a price problem, absolutely this 0:07:24.080 --> 0:07:27.400 as far as Mustachari, he runs a company called Allidate 0:07:27.840 --> 0:07:31.320 that works with hundreds of independent physician groups. It is 0:07:31.360 --> 0:07:33.840 the prices, particularly on the commercial side, but it is 0:07:33.880 --> 0:07:35.960 also that we have a crappy health care system that 0:07:35.960 --> 0:07:38.240 doesn't take care of people very well and as fragmented, 0:07:38.520 --> 0:07:40.760 and no one's in charge, and no one feels accountable 0:07:40.800 --> 0:07:43.000 for the patient's outcomes, and we got to fix that too. 0:07:43.000 --> 0:07:46.720 It's not just a cost problem. There's also a quality problem, 0:07:46.800 --> 0:07:50.480 and a utilization problem and a compassion problem. You may 0:07:50.520 --> 0:07:53.080 have noticed this as a patient as well, if you've 0:07:53.120 --> 0:07:55.560 been caught in a dispute between your insurance company and 0:07:55.560 --> 0:07:58.400 a big health system fighting over whether some treatment should 0:07:58.400 --> 0:08:02.960 be approved. Day and other doctors say these growing bureaucracies 0:08:03.080 --> 0:08:05.440 also getting the way of doctor's ability to do right 0:08:05.480 --> 0:08:08.240 by their patients. Part of the problem is that they 0:08:08.280 --> 0:08:12.320 got paid for each service they performed. It was about volume, 0:08:13.000 --> 0:08:17.400 so you got you got paid for doing more rather 0:08:17.480 --> 0:08:23.360 than solving patients problems um, which is you know, poorly 0:08:23.400 --> 0:08:26.480 aligned and senate doctors had to cram more work into 0:08:26.480 --> 0:08:30.640 short visits and got to the point where in a 0:08:30.680 --> 0:08:33.800 fifteen minute office visit, about half the time was spent 0:08:33.880 --> 0:08:36.319 with the electronic medical record and getting all of the 0:08:36.960 --> 0:08:41.000 UH shot records in and putting in data and so forth, 0:08:41.559 --> 0:08:43.840 that only half of the time was actually spent with 0:08:43.880 --> 0:08:48.600 the patient. UM and so that was not very fulfilling 0:08:48.640 --> 0:08:51.680 for patients nor physicians. With less time to deal with 0:08:51.679 --> 0:08:55.880 patients problems, doctors referred them to specialists. And so if 0:08:56.200 --> 0:09:00.120 patient might come in with the typical uh list of 0:09:00.160 --> 0:09:02.320 three or four things they wanted to talk about, and 0:09:02.360 --> 0:09:05.239 you really only have time to deal with one efficiently, 0:09:05.920 --> 0:09:08.440 and so you wind up creating all of these referrals 0:09:09.640 --> 0:09:14.560 to handle all of the other portions of what they 0:09:14.640 --> 0:09:18.400 wanted to have accomplished. UM and a lot of these 0:09:18.440 --> 0:09:22.400 referrals are really silly. They just weren't needed. The physicians 0:09:22.440 --> 0:09:24.480 just needed more time to be able to spend with 0:09:24.559 --> 0:09:27.280 the patient, to be able to handle these issues and 0:09:27.360 --> 0:09:30.600 stop these referrals. But they didn't have any incentive to 0:09:30.640 --> 0:09:33.120 do that because they were paid based on how many 0:09:33.160 --> 0:09:36.360 patients they saw. This feeling of being on a hamster 0:09:36.400 --> 0:09:40.599 wheel turning through appointments is common among doctors. It contributes 0:09:40.640 --> 0:09:44.120 to a pervasive feeling of physician burnout. That's why Dale 0:09:44.120 --> 0:09:47.400 began thinking about breaking away from the hospital system, trying 0:09:47.400 --> 0:09:51.000 to close the distance between himself and his patients. He says, 0:09:51.120 --> 0:09:55.040 it's time for doctors to take back their autonomy. So 0:09:55.120 --> 0:09:58.959 all of this and this push of volume, patients didn't 0:09:58.960 --> 0:10:03.560 feel fulfilled for positions didn't feel fulfilled. And then we 0:10:03.720 --> 0:10:10.320 got to a point um where after they changed how 0:10:10.360 --> 0:10:12.880 we were practicing and push more volume and so forth, 0:10:14.040 --> 0:10:19.120 we just said we'd have enough. Dale wants to move 0:10:19.200 --> 0:10:21.959 toward a system where doctors get paid more for keeping 0:10:22.000 --> 0:10:25.560 patients healthy and out of the hospital. He wants doctors 0:10:25.600 --> 0:10:29.359 to spend more time with patients and avoid unnecessary referrals 0:10:29.400 --> 0:10:32.880 to specialists. And this is part of a bigger movement 0:10:33.080 --> 0:10:36.559 that's shaped the health care industry for the last decade. 0:10:37.320 --> 0:10:39.920 And the visits are getting shorter and shorter and shorter 0:10:40.000 --> 0:10:42.800 because you gotta you gotta see more and more patients 0:10:42.800 --> 0:10:45.600 because I'm going to get paid on a per visit basis. 0:10:46.240 --> 0:10:48.840 As far as ad says, the traditional way of paying 0:10:48.840 --> 0:10:52.960 for healthcare favors big hospital systems. And the more market 0:10:53.040 --> 0:10:55.240 power you have, the more clout you have, the more 0:10:55.440 --> 0:10:58.120 bigger market share you have, the tougher you negotiate with 0:10:58.120 --> 0:11:00.600 the plan, and the more you get paid for doing 0:11:00.760 --> 0:11:04.800 the same thing right. Alladate is trying to get doctors 0:11:04.840 --> 0:11:08.679 off the hamster wheel. The company works with independent physician 0:11:08.720 --> 0:11:11.120 groups who together take care of more than half a 0:11:11.160 --> 0:11:15.480 million patients. These doctors have all agreed to contracts that 0:11:15.520 --> 0:11:18.080 will pay them more if they can reduce the total 0:11:18.160 --> 0:11:22.080 cost of their patient's care. He says these contracts can 0:11:22.080 --> 0:11:25.520 tilt the balance of power away from big hospital systems 0:11:25.640 --> 0:11:29.679 in favor of leaner, more nimble, independent groups that can 0:11:29.760 --> 0:11:34.400 reduce unnecessary costs. If you're just independent primary care providers 0:11:34.400 --> 0:11:36.319 who can act in the patient's best interest and think 0:11:36.360 --> 0:11:38.559 about just what do I need to do to keep 0:11:38.600 --> 0:11:41.800 this person from going to the emergency room of being hospitalized, 0:11:41.920 --> 0:11:46.640 And turns out primary care is the answer. Dale wanted 0:11:46.679 --> 0:11:50.240 to do the same thing. His practice joined the hospital 0:11:50.280 --> 0:11:54.400 system in the because they needed leverage with inferrors to 0:11:54.480 --> 0:11:57.720 negotiate rates. But if he could change the way the 0:11:57.760 --> 0:12:00.480 doctors got paid, they wouldn't need to be part of 0:12:00.480 --> 0:12:06.200 the hospital system anymore. As Dale contemplated leaving in he 0:12:06.280 --> 0:12:09.880 spent months going around the country to meet with insurance companies, 0:12:10.160 --> 0:12:14.000 hospital systems, and other physicians. He wanted to understand what 0:12:14.080 --> 0:12:16.880 it would take to survive as an independent group, and 0:12:16.920 --> 0:12:18.880 they taught me a lot, But it was really about 0:12:19.960 --> 0:12:23.640 could we create the critical mass and if we could, 0:12:25.679 --> 0:12:28.760 did we have the resolve to lock arms and go 0:12:28.840 --> 0:12:32.800 do this. Back in Charlotte, he started recruiting his colleagues 0:12:32.840 --> 0:12:36.160 to join him in an exodus from atri M. In secret, 0:12:36.280 --> 0:12:39.040 they began to pot a course to independence. And so 0:12:39.080 --> 0:12:44.400 I met with about sixty five physicians individually first and 0:12:44.520 --> 0:12:47.880 in everybody's homes and playing patty cake with babies and 0:12:47.920 --> 0:12:53.000 things like that, and and to an individual, everyone was 0:12:53.040 --> 0:12:56.120 on board, but the hospital system did not make it easy. 0:12:56.640 --> 0:12:58.960 All the doctors had contracts with atri M, and those 0:12:59.000 --> 0:13:04.319 contracts had not compete causes. We had significant restrictive covenants 0:13:04.520 --> 0:13:10.840 in our contracts that prevented us from going out and competing. 0:13:11.200 --> 0:13:14.680 And after months of talks with hospital management, Dale says, 0:13:14.760 --> 0:13:17.640 it became clear that they wouldn't release the physicians from 0:13:17.640 --> 0:13:21.880 their noncompete causes. The doctors each pitched in five thousand 0:13:21.880 --> 0:13:25.240 dollars to hire lawyers, and they sued to ask at 0:13:25.440 --> 0:13:30.040 M to release them from the contracts. And I'm literally 0:13:30.559 --> 0:13:37.479 negotiating on Easter Day, okay with the with the hospital system, 0:13:37.520 --> 0:13:40.439 and realized they're just not going to move off of 0:13:40.480 --> 0:13:44.920 a particular position, and we weren't either. So we went 0:13:44.920 --> 0:13:48.960 ahead and filed the next morning The lawsuit argued that 0:13:49.040 --> 0:13:53.080 the non compete causes were invalid. The doctors also accused 0:13:53.120 --> 0:13:57.160 the health system of quote monopolistic and anti competitive actions. 0:13:58.480 --> 0:14:01.520 A few months after it was fild, Atrium agreed to 0:14:01.600 --> 0:14:05.000 let them split off. Atrium didn't comment on the lawsuit. 0:14:07.400 --> 0:14:09.560 The doctors had just a couple of months to set 0:14:09.640 --> 0:14:12.240 up the new independent practice. There was a lot they 0:14:12.280 --> 0:14:15.280 needed to do. It's it's literally everything that has to 0:14:15.320 --> 0:14:18.320 be done. They couldn't keep their offices, equipment, or even 0:14:18.360 --> 0:14:21.200 the name of the group. All of that belonged to 0:14:21.240 --> 0:14:24.920 the hospital system. They decided to name the new group 0:14:25.040 --> 0:14:28.640 Tryon Medical Partners, after the street where the original practice 0:14:28.680 --> 0:14:32.760 was founded. They had to hire office staff, line up financing, 0:14:32.920 --> 0:14:35.960 and outfit new clinics spread across the city of Charlotte. 0:14:36.280 --> 0:14:41.200 And so we're standing up eight buildings office sites, i 0:14:41.240 --> 0:14:44.280 should say, and one of them has four floors, so 0:14:44.400 --> 0:14:50.360 essentially eleven offices. And we were literally painting at three 0:14:50.400 --> 0:14:54.200 in the morning before it opened at seven. Doctors did 0:14:54.200 --> 0:14:57.400 the kind of work that doctors don't normally do. Um 0:14:57.440 --> 0:15:02.720 We had physicians putting in paper, towel, sand, and toilet 0:15:02.720 --> 0:15:05.520 paper rolls. They also sent out joint letters to a 0:15:05.560 --> 0:15:09.320 hundred and fifteen thousand patients. The letters were carefully negotiated 0:15:09.400 --> 0:15:11.720 with the hospital system to let patients know about the 0:15:11.760 --> 0:15:15.320 breakup without swaying them one way or another. They could 0:15:15.360 --> 0:15:17.920 continue to get karat a t M with other physicians, 0:15:18.040 --> 0:15:21.720 or follow their doctors. The doctors had a sense of 0:15:21.760 --> 0:15:25.800 camaraderie and shared purpose that helped see them through snaffhoos. 0:15:26.000 --> 0:15:29.160 With the transition, the freight elevator went out in their 0:15:29.200 --> 0:15:31.400 main building as they were trying to build out four 0:15:31.480 --> 0:15:36.280 floors of clinic space, delaying the opening. The steel, the 0:15:36.480 --> 0:15:40.520 wall board, um, anything and everything. They couldn't bring it up, 0:15:40.520 --> 0:15:44.440 and so they were literally people plumbers carrying stuff up 0:15:44.480 --> 0:15:47.960 ten flights of stairs. Try And officially opened on September 0:15:49.400 --> 0:15:53.680 with just two offices. It was a big gamble. Dale 0:15:53.720 --> 0:15:56.240 didn't know how many of their old patients would follow 0:15:56.280 --> 0:16:01.160 the doctors. Karen Stall, Tryon's chief operating officer, says, they 0:16:01.240 --> 0:16:03.720 didn't have to wait long to see if that bet 0:16:03.760 --> 0:16:06.880 would pay off. We thought we had time. We were 0:16:06.880 --> 0:16:09.520 going to ramp up. We could build our team pretty 0:16:09.600 --> 0:16:14.400 readily over the latter part of eighteen um no way 0:16:14.640 --> 0:16:18.600 our phones exploded we had issues with the phones that 0:16:18.640 --> 0:16:21.840 were selected to begin with. They could not manage the 0:16:21.920 --> 0:16:25.520 volume that was coming in. Doctors shared the space by 0:16:25.560 --> 0:16:28.960 working in fifths, so we worked seven am to one 0:16:29.360 --> 0:16:34.280 pm in one shift of eleven and then two pm 0:16:34.440 --> 0:16:38.840 to eight pm was the second shift of different eleven physicians. 0:16:39.440 --> 0:16:41.440 So that's money through Friday, and we did the same 0:16:41.440 --> 0:16:44.760 thing on the weekends and split them up as well. Eventually, 0:16:44.880 --> 0:16:47.880 the new group opened to nine clinics in and around Charlotte, 0:16:47.960 --> 0:16:51.440 including an endoscopy center in a newly built three story building. 0:16:53.640 --> 0:16:56.320 On a cold day in mid November, Dale is pointing 0:16:56.320 --> 0:16:59.280 at our Neon sign above Tryon's main office in Charlotte's 0:16:59.280 --> 0:17:02.120 South Park neighbor instruction building. The try On Medical name 0:17:02.160 --> 0:17:05.320 glows inflorescent lights from the top of the ten story building. 0:17:05.920 --> 0:17:08.000 That was That was a heck of job getting that 0:17:08.080 --> 0:17:11.480 thing that's on there. Dale gave me a tour of 0:17:11.480 --> 0:17:15.119 a couple of Tryon's clinics. He banters with patients and staff. 0:17:15.520 --> 0:17:18.080 One long time patient observes that he smiles a lot 0:17:18.080 --> 0:17:21.480 more than he used to. Dale says the group runs 0:17:21.560 --> 0:17:25.400 more efficiently outside of the hospital system. In one example, 0:17:25.560 --> 0:17:28.240 he said they were able to save costs on real 0:17:28.359 --> 0:17:31.560 estate because doctors didn't need as much office space. We 0:17:31.600 --> 0:17:36.120 felt like we had too much physician office space and 0:17:36.119 --> 0:17:38.959 that it was probably the least you last space in 0:17:39.000 --> 0:17:44.159 the entire organization, and so they shrank offices and streamed 0:17:44.280 --> 0:17:47.560 the number of exam rooms and our footprint just on 0:17:47.680 --> 0:17:50.520 the rent and so forth. It's saving three million dollars 0:17:50.520 --> 0:17:53.680 a year. The group's leaders say it can save all 0:17:53.760 --> 0:17:57.640 kinds of money that's just wasted in bigger organizations. Frankly, 0:17:58.040 --> 0:18:01.680 being in the system, they don't hair about waste, they 0:18:01.680 --> 0:18:05.480 don't look for efficiencies. They are too big. Karen still 0:18:05.680 --> 0:18:08.840 Try and chief operating officer, spent sixteen years as an 0:18:08.840 --> 0:18:12.879 administrator at Atrium. So in the system setting, you're moving 0:18:13.000 --> 0:18:18.639 the Titanic, it takes months and months to get anything changed, moved, 0:18:18.720 --> 0:18:22.760 or accomplished. In an independent practice setting like this, we 0:18:22.800 --> 0:18:24.960 can do that on a time and Dale says that 0:18:25.000 --> 0:18:27.840 they can be more competitive. He estimates that he can 0:18:27.920 --> 0:18:30.800 lower costs of medical care by ten to fifteen percent 0:18:30.960 --> 0:18:35.720 compared to a hospital owned group. So when a physician 0:18:35.720 --> 0:18:38.960 group leaves a hospital system, then the overhead of the 0:18:39.000 --> 0:18:43.040 hospital system is no longer having to be covered financially. 0:18:43.320 --> 0:18:46.600 Dale wouldn't discuss how much doctors are now compared to 0:18:46.640 --> 0:18:49.800 when they worked for the hospital, but all the physicians 0:18:49.920 --> 0:18:52.119 did put in their own money to fund the group. 0:18:52.920 --> 0:18:56.240 Dale won't say how much, but that investment helped secure 0:18:56.240 --> 0:18:59.120 a bank loan that the group is liable for. We 0:18:59.200 --> 0:19:03.480 have skin, feet, and eyeballs in the game, and Dale 0:19:03.560 --> 0:19:06.399 says that makes them apt to be more efficient. He 0:19:06.480 --> 0:19:08.440 gave me an example of one way his group could 0:19:08.440 --> 0:19:11.679 reduce costs. He says, in a hospital system, there's a 0:19:11.680 --> 0:19:14.840 lot of implicit pressure to refer patients to specialists or 0:19:14.880 --> 0:19:18.160 other care inside the system. When they were part of Atrium, 0:19:18.200 --> 0:19:20.719 the doctor's got regular reports about how many of their 0:19:20.720 --> 0:19:23.960 patients were getting referred to competing hospitals. I think that 0:19:24.040 --> 0:19:29.040 we've already started to see that some of these um 0:19:29.480 --> 0:19:35.720 unnecessary referrals and downstream spend are already decreasing. It's it's palpable. 0:19:36.000 --> 0:19:39.919 In a statement to Bloomberg News, Atrium said that of 0:19:40.000 --> 0:19:43.600 Tryon's patients have returned to the hospital system for some 0:19:43.720 --> 0:19:47.480 form of care. The statement also said that Atrium is 0:19:47.520 --> 0:19:50.840 the community's safety net hospital with a mission to treat 0:19:50.880 --> 0:19:54.720 all patients regardless of the ability to pay. It said 0:19:54.760 --> 0:20:00.399 the health systems doctors are integral to the mission. Doesn't 0:20:00.440 --> 0:20:02.840 want to portray hospitals as the bad guys, but he 0:20:02.880 --> 0:20:06.880 says they've become too inefficient. It's it's not that the 0:20:06.920 --> 0:20:12.320 hospitals themselves are failed entities. That's not the issue. I 0:20:12.359 --> 0:20:14.720 love hospitals. I've got a lot of great friends in hospitals, 0:20:14.840 --> 0:20:17.919 do great work in hospital. But we can't ignore the 0:20:17.960 --> 0:20:21.119 fact that administrative costs of the past ten and fifteen 0:20:21.200 --> 0:20:26.800 years of increased. It's difficult to get hard numbers to 0:20:26.840 --> 0:20:30.160 see how Tryon compares to the hospital system in terms 0:20:30.160 --> 0:20:33.280 of the prices they charge. But here's one sign of 0:20:33.359 --> 0:20:37.280 Dale's willingness to compete on price. Last summer, the state 0:20:37.359 --> 0:20:40.639 health plan proposed linking its payments to doctors and hospitals 0:20:40.880 --> 0:20:44.240 to the prices that Medicare pays. It would have meant 0:20:44.240 --> 0:20:46.719 pay cuts for a lot of providers because the payments 0:20:46.760 --> 0:20:50.240 would have been lower than what commercial health plans typically pay. 0:20:50.840 --> 0:20:55.919 Deal cheered the plan on, while hospitals statewide opposed it. Ultimately, 0:20:56.080 --> 0:20:59.639 the state treasurer backed away from the proposal after hospitals 0:20:59.640 --> 0:21:03.000 refused to sign On. The Tryon group is also attempting 0:21:03.000 --> 0:21:06.280 to go around insurance companies and contract directly with employers. 0:21:07.160 --> 0:21:10.440 They call it Tryon Direct. The plan will offer unlimited 0:21:10.440 --> 0:21:13.359 primary care visits to employers in exchange for a fixed 0:21:13.400 --> 0:21:17.040 monthly fee. The doctors have signed up three employers so far. 0:21:18.400 --> 0:21:22.280 Dale and his colleagues say they're just beginning, and try 0:21:22.280 --> 0:21:25.600 And has big ambitions to expand in Charlotte and beyond. 0:21:26.320 --> 0:21:30.560 The company's chief strategy Officer Gas Engaged, told me that 0:21:30.600 --> 0:21:33.919 he envisions a practice with potentially thousands of doctors and 0:21:34.040 --> 0:21:39.119 millions of patients all over the country. It's too early 0:21:39.200 --> 0:21:42.639 to say how far Tryon will expand its reek, whether 0:21:42.640 --> 0:21:44.920 it's a pipe dream to think that they can replicate 0:21:44.920 --> 0:21:47.600 what they've done in Charlotte in other cities or regions. 0:21:48.560 --> 0:21:51.040 Dale predicts that more and more doctors will split from 0:21:51.040 --> 0:21:54.760 health system owners around the country. He says he's hearing 0:21:54.800 --> 0:21:57.720 from physicians who want to join all the time. We 0:21:57.840 --> 0:22:02.480 have dozen of physicians knocking on the door right now 0:22:02.720 --> 0:22:07.320 trying to get in of all different types of specialties 0:22:07.359 --> 0:22:11.480 and surgical specialties and so forth like that, from both 0:22:11.480 --> 0:22:14.840 this county and other counties. Dale believes that try and 0:22:14.880 --> 0:22:18.000 will be more competitive if the healthcare industry really does 0:22:18.040 --> 0:22:21.280 shift from paying doctors for how many services they provide 0:22:21.520 --> 0:22:23.840 to paying for how healthy they can keep their patients. 0:22:24.920 --> 0:22:27.679 But most healthcare is still reimbursed on a fee for 0:22:27.760 --> 0:22:30.760 service basis, and there are a lot of factors that 0:22:30.920 --> 0:22:35.720 still point toward more mergers, more consolidation, and bigger hospital systems. 0:22:36.800 --> 0:22:39.640 Trium could be just a footnote in a marketplace where 0:22:39.640 --> 0:22:43.399 the winning strategy for decades has been bigger is better, 0:22:44.359 --> 0:22:46.800 but Dale sees the company as part of a broader 0:22:46.840 --> 0:23:01.760 transformation he hopes will soon sweep the American healthcare industry. 0:23:04.200 --> 0:23:07.280 And that's it for this week's prognosis. Thanks for listening. 0:23:13.920 --> 0:23:15.800 Do you have a story about healthcare in the US 0:23:16.000 --> 0:23:18.440 or around the world we want to hear from you. 0:23:19.119 --> 0:23:22.280 Find us on Twitter at Fake Cortes or at jay Taws. 0:23:23.560 --> 0:23:25.800 If you were a fan of this episode, please take 0:23:25.800 --> 0:23:28.560 a moment to rate and review us. It really helps 0:23:28.560 --> 0:23:31.679 new listeners find the show, and don't forget to subscribe. 0:23:32.960 --> 0:23:36.440 This episode was produced by Laura Carlson in tofor Foreheads. 0:23:36.960 --> 0:23:40.320 Our story editor was Rick Shine. Special thanks to Darrelle 0:23:40.320 --> 0:23:44.119 Dillard and health Care Team. Later Drew Armstrong. Francesca Levie 0:23:44.240 --> 0:23:47.040 is head of Bloomberg Podcasts. We'll be back next week 0:23:47.119 --> 0:23:48.760 with the new episode. See it then,