Rheumatology Practice Merger Pros and Cons

More and more rheumatologists are finding it advantageous to work in a practice with multiple partners. With growing costs and the need to provide more and more specialty services, working for a large practice with other rheumatologists or physicians of other specialties may be necessary.

Herbert S. B. Baraf, MD, FACP, MACR, is one of those rheumatologists who found the expansion of his practice to be helpful and, at times, necessary, and is now one of 16 partners at Arthritis and Rheumatism Associates PC (ARAPC), with offices in four different locations in Washington, D.C., and Maryland.

“It does make a group’s demands—read that as survival—much easier, because smaller groups are finding themselves at a disadvantage,” says Dr. Baraf. “Whereas hospitals are buying up primary care, oncology and other practices, what I would call services that are central to their mission, rheumatology is not a high priority for hospital networks.”

Other rheumatologists find working in larger groups advantageous because of the protection it provides against economic forces, as well as the convenience of having the support of other doctors on a regular basis.

“I’ve always found it far more comfortable to practice medicine surrounded by other smart people,” says Douglas White, MD, who works as a rheumatologist in the Gundersen Health System, a multispecialty group consisting of 400–500 physicians, with locations in Wisconsin, Iowa and Minnesota. “I really like the safety net of having other people to talk to.”

Merging Practices

There are several scenarios that may put a rheumatologist in a position where they are looking for a professional partner—whether it be a rheumatologist looking to bring somebody on and make them a partner, two rheumatologists who are in different practices who decide to merge and create a partnership, or groups of rheumatologists who decide to merge and create a larger group.

For Dr. Baraf, all of these factors came into play. More than 30 years ago, he was one of two rheumatologists who were looking to expand, which resulted in a partnership with another rheumatologist in town whose practice of internists was breaking up.

“Both groups were trying to minimize risk and trying to get economies of scale by being larger,” says Dr. Baraf. “We had already committed to move into more space. This was somebody who would share the responsibility for that—and the rent—so that made us happy.”

Fourteen years later, they once again realized that expansion to more locations and a larger number of physicians was necessary to protect themselves from managed care, what Dr. Baraf refers to as “predatory pricing on services.” The practice then added three more offices and merged practices with yet another partner. This type of pattern continued until ARAPC had 16 partners.