The session Small Fish in a Big Pond: Private Equity, Corporate Medicine and the Sustainability of Independent Rheumatology held at the inaugural Practice Innovation Summit focused on the challenges that come with surviving as an independent rheumatology practice in the current health environment.
Factors Behind the Sell
Dr. Feldman
Although rheumatologists typically want to focus on the doctor-patient relationship and clinical choices, they also must consider profit in today’s environment, said Madelaine Feldman, MD, FACR, The Rheumatology Group, New Orleans. “Unfortunately, we have to,” she said.
She brought up four business factors—the business itself, the patient, heart and soul, and doctor/patient relationships—and noted that if any one of these factors falters, it can affect the others. This is something that is happening more frequently in today’s health environment.
Other factors affecting today’s private practices include lower reimbursement rates, government regulation, personnel costs and issues, technology and higher overhead costs, Dr. Feldman said. “How long can we sustain that?” she asked.
Two other challenges physicians face are educational debt and a lack of business training, with business training more essential nowadays for independent practices, she added.
Pressure from insurers to follow care strategies, such as step therapy or prior authorization, put pressure on rheumatologists as well as patients.
Yet another factor eroding the stability of private practices is the role of insurance coverage when deciding which drug or drugs are available for a patient, Dr. Feldman said. Shared decision making used to refer to a discussion between the patient and doctor; nowadays, it seems more guided by insurance coverage.
Even with all these pressures, Dr. Feldman sees a silver lining.
“It has been said that novelty, creativity and service are the three things that get people up in the morning as they get older. I believe that the practice of rheumatology offers all three of these,” Dr. Feldman said. “Consequently, in spite of all of these pressures, we are extremely fortunate to be rheumatologists, the best specialty in the world.”
A Bigger Picture Look
Marco Fernandez, MD, president, Association of Independent Medicine and president, Midwest Anesthesia Partners, Naperville, Ill., provided a big-picture look at corporate medicine, from meetings with federal lawmakers in Washington, D.C., to advocacy within various states, to experiences with patient care when his mother was sick.
Dr. Fernandez is the founder of the Association of Independent Medicine, which focuses on preserving physician autonomy, promoting nonprofit and physician-led healthcare models and strengthening regulatory oversight. He founded the group in 2022.
One major concern among corporate medicine, according to Dr. Fernandez, is the vertical integration of insurance companies blending with pharmacies, provider-care services and more. This can lead to higher cost and fewer consumer choices, he said. Dr. Fernandez gave several examples of this type of integration, such as the following with CVS Health as the parent company:
- Insurer: Aetna
- Pharmacy benefit manager: CVS Caremark
- Group purchasing organization: Zinc Health Services
- Manufacturer: Cordavis
- Specialty pharmacy: CVS Specialty
- Retail pharmacy: CVS Pharmacy and Omnicare
- Provider: CVS Minute Clinic, Signify Health and Oak Street Health
These vertically integrated companies represent a consolidation of power and wealth that pervades over independent voices, Dr. Fernandez said.
“I get excited when I go to D.C. and meet with policy makers, then I leave [defeated] because I realize there is very little that we can do,” he said.
Another approach to make the playing field somewhat fairer for independent practices is through advocacy on the state level regarding corporate practice of medicine laws, he said. These are regulations that do not allow corporations or non-physician companies to practice medicine or employ practicing physicians, Dr. Fernandez said. Various states’ laws have nuances within this area.
Leveling the playing field also involves working with specialty organizations and groups such as the American Medical Association, he added. “No one is coming to save us. We need to do more, and we need to be proactive,” Dr. Fernandez said.
On the upside, Dr. Fernandez told the story of how a local hospital terminated a contract with his practice, which has about 38 anesthesiologists. “After nine months of negotiations, they decided to go in a different direction,” Dr. Fernandez said. However, the practice leaders pivoted, focusing on long-term contracts with ambulatory surgical centers (ASCs) and locums tenens work with local hospitals. The practice doubled its number of contracts with ASCs and has found success with their new business model, he said.
Independent practices that need more guidance can contact the Association of Independent Medicine and look into the Break Up Big Medicine initiative from the American Economic Liberties Project, Dr. Fernandez said.2,3
Concerns Over Private Equity Ownership
Dr. Feldman shared a few concerns that rheumatologists may have to consider when considering private equity ownership:
- Profit goals that may overshadow patient needs,
- Potential conflicts between revenue priorities and medical ethics,
- Higher costs and administrative fees that are passed on to patients and employers,
- A loss of locally owned, community-centered care, and
- Reduced physician control, with investors often dominating key decisions.
If considering a contract with a private equity or other corporate partner, make sure to consult with health-law counsel, tax/accounting advisors and a corporate practice of medicine specialist in your state before moving forward, Dr. Fernandez advised. Lots of moving parts need to be considered.
Vanessa Caceres is a medical writer in Bradenton, Florida.
References
- Kane CK. Policy research perspectives: Physician practice characteristics in 2024: Private practices account for less than half of physicians in most specialties. 2025. https://www.ama-assn.org/system/files/2024-prp-pp-characteristics.pdf.
- Association of Independent Medicine. https://www.associationforindependentmedicine.org/.
- Break Up Big Medicine. American Economic Liberties Project. https://www.breakupbigmedicine.com/.
