Missouri private practice uses technology as opportunity
Image and article courtesy of the Missouri Chamber of Commerce and Industry
When computers started revolutionizing the medical industry, some physicians felt trepidation. For them, new technology meant new headaches.
But where some physicians saw hurdles, Dr. Tom Landholt, saw an opportunity. The Springfield-based doctor envisioned how medical providers could use technology to work more efficiently. He thought going digital could streamline medical practices. It might even lead to happier patients.
At the time, Landholt was employed by a large health system. He knew it could take years for his employer to make the transition, so he struck out on his own and established a private clinic.
“I was one of the early adopters of electronic medical records,” Landholt says. “I saw that technology could provide an excellent medical record while serving as a good business management tool. Embracing technology enabled us to lower costs and improve service.”
When Landholt opened his own practice, PatientCare Family Clinic, many doctors were entrepreneurs.
But today, there are fewer small private physician clinics, and doctors across the country are less likely to choose the entrepreneurial path. For instance, 57 percent of doctors were independently employed in 2000.
“When I went into practice, we were mainstream,” Landholt says. “Now, we’re kind of outliers.”
However, private practice is far from going on life support, and great opportunities remain for physicians who choose to strike out on their own.
From Chophouse to House Calls
In the 1970s, before he was Dr. Landholt, he was Tom, the manager of Steak & Ale, a steakhouse and bar in Springfield. He loved the job, despite the long, demanding hours. “It didn’t really even feel like work,” he says. The experience he gained as a restaurant manager was invaluable. He learned to lead a staff, maintain a facility, and deal with all of the other problems that arise at a restaurant. Most importantly, he discovered how to take care of his customers.
“It was a pretty well-rounded education,” he says. “If you can run a restaurant, you can run almost any business.”
Eventually, he realized restaurant management wasn’t the career that he wanted. He chose to pursue a medical degree because, as a doctor, he could connect with community members, an aspect of restaurant work that he also loved. Plus, the profession would be mentally stimulating.
When he became inspired to start his own practice, he was excited to put his restaurant experience to work.
“Having that background certainly colored my perceptions of how the clinic ought to be run,” he says.
Today, Landholt runs his clinic with his partner, Dr. Scott Turner. They employ two nurse practitioners and six support staffers. They handle about 10,000 visits each year.
Along with personally seeing about 25 patients every day, Landholt spends eight to 10 hours each week managing the clinic. He enjoys both roles. While he provides great care, his business management skills help keep turnover low and business growing.
“We’ve created an enjoyable work experience and an enjoyable health care experience,” Landholt says. “When you have the respect of your staff and your customers, you’re doing the right thing.”
Why Private Practices are Disappearing
Although Landholt’s clinic has grown, more and more physicians in Springfield are leaving private practices in favor of hospitals, and the same thing is happening in other places, too.
“It’s a nationwide trend, not just in Missouri,” says Tom Holloway, executive vice president of the Missouri State Medical Association. “Hospital systems are purchasing physician practices all over the state, and we’re seeing a lot of young physicians coming out of their residency training and going straight into hospital employment.”
In a study this past September, the American Medical Association found that the number of physicians who own their clinics declined by 8 percent from 2007 to 2012.
The decline comes as hospitals and health systems feel compelled to employ physicians in order to grow or maintain marketshare; having more physicians on staff ensures a steady stream of patients that use hospital services. Health systems also want more physicians on staff to gain leverage in negotiations with insurers and enhance savings with larger economies of scale.
Likewise, today’s physicians have their own pressures when seeking employment.
Medical School Debt
“Many young physicians coming out of their training are saddled with very significant medical school debt—perhaps $200,000 or more,” Holloway says. “The idea of taking on considerably more debt to launch a private practice is daunting to say the least. Given that, a growing number of these physicians find a relatively low-risk salaried arrangement with a hospital or a large medical group to be very attractive.”
Additionally, government regulations keep growing, and insurance contracts are increasingly complex. Landholt’s clinic tracks more than 500 different insurance plans, each with separate rules.
On the other hand, the numbers show private practices aren’t going extinct. The American Medical Association study found that 53 percent of physicians today are still self-employed.
“To paraphrase Mark Twain, the reports of the death of private practice medicine have been greatly exaggerated,” said Ardis Dee Hovin, president of the American Medical Association, in a press release.
Physicians who maintain their practices as private can benefit from being in control. “The physician’s loss of autonomy is the major sacrifice,” Holloway says. “Physicians accustomed to making their own decisions and then executing them often find themselves lost in hospital bureaucracies.”
For Landholt, maintaining autonomy has allowed him to respond to the ever-changing Springfield market and grow his practice.
Like other small companies, PatientCare Family Clinic has an evolving strategy. “We are always evaluating our business plan,” Landholt says. “We ask, ‘Do we have the right services, and are we matching them to what the community needs from us?’”
Better Schedules, Better Results
The clinic noticed that many of their patients are working mothers who want quick care for their sick children. As they sought doctors around town, these mothers were disappointed in having to wait days or even weeks to see many family practitioners in the Springfield area.
Sensing an opportunity, Landholt’s clinic gave its employees who make schedules greater freedom to converse with patients and determine the best time for an appointment.
“It turns out that a well-trained person answering the phone—taking cues from the patient can really set up a very efficient schedule as the day progresses,” Landholt says.
The strategy to see patients as they call has allowed his clinic to see 90 percent of patients the day they call.
“In fact, a lot of our patients think we are an urgent care, but we are a by-appointment clinic,” Landholt says. “It’s not that we are busier than the next doctor down the road; it’s just that management tweaks have helped us serve this market.”
The freedom that Landholt exemplifies is perhaps why private practices are far from disappearing, and why one day the trends might reverse or plateau.
“The private practice is not about to go extinct, and that is a good thing,” Holloway says. “Consolidation in a free marketplace is not healthy. When independent entities can compete based on cost and quality of care, the patients benefit.”
New models might also develop, allowing physicians to partner more closely with hospitals, receive some of the management benefits, and remain independent.
As Landholt saw the benefits of digitizing patient files, the doctors of tomorrow will find new reasons to choose the entrepreneurial path.