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BackTable / VI / Podcast / Transcript #366
Podcast Transcript: Navigating OBL & ASC Business: Pitfalls to Avoid
with Teri Yates
In this episode, host Aaron Fritts is joined by Teri Yates, CEO of Accountable Physician Advisors, who offers essential guidance for successfully establishing and managing Office-Based Labs (OBLs). You can read the full transcript below and listen to this episode here on BackTable.com.
Table of Contents
(1) Top 3 Reasons OBLs & ASCs Fail
(2) Interpreting Revenue Cycles
(3) Choosing Personnel to Handle Finances
(4) Dealing with Troublesome Doctors & Staff
(5) Overcoming Analysis Paralysis in the Startup Phase
(6) Startup Timelines & Regulations
(7) OBL & ASC Market Breakdown: IR, IC, & Vascular Surgery
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[Dr. Aaron Fritts]
Today, we've got a great episode lined up. We're going to talk about some of the pitfalls of starting and owning an OBL and ASC. We previously discussed OBL and ASC practice styles and practice building a number of times on prior episodes with physician entrepreneurs, including Jim Melton, Krishna Mannava, Mary Costantino, Mike Watts, Nick Petruzzi and several others. Definitely, dive into our archives and check out some of those episodes with this one. This is a hot topic, as everybody knows who's tuning in. Today, we're going to talk to Teri Yates. Many of you who've been to OEIS in prior years have probably heard Teri speak at OEIS. She is the CEO of Accountable Physician Advisors. She's going to talk today with me about some key pieces of business development, what can and has gone wrong. I kind of want to treat this session as almost like an M&M where Teri can kind of tell us about the complications that docs have had in business and how best to avoid those pitfalls when they're either starting and or even just owning an outpatient-based practice. Teri, welcome to the show.
[Teri Yates]
Thanks, Aaron. I really appreciate the opportunity to be here.
[Dr. Aaron Fritts]
Yes, and so you and I met through Krishna Mannava and we've Columbus roots, Columbus, Ohio roots, so fellow Buckeye, definitely always like having fellow Buckeyes on the show. Tell us a little bit about yourself. How long have you been in this field and what sparked building Accountable Physician Advisors?
[Teri Yates]
I've worked in healthcare my whole career. It's all I've ever done. My business administration background and I was in radiology for 18 years. My last job when I was employed by someone else was as Chief of Quality, Risk and Compliance for a group of 150 physicians. The impetus for starting my consulting firm really had a lot to do with my own goals. I always wanted to be a consultant, but the timing of it was really determined by what happened with my career because the rad group that I was with had private equity investment and the company was not meeting some of the investor targets. They decided to lay off a third of the non-physician workforce.
I ended up about 10 years before my plan suddenly having this opportunity. I was looking for a job, but I thought, "Well, you know, I'm a type A, I'm a hard worker. I'll do a little consulting on the side while I'm looking for a job. Within a very short period of time, I realized this is my job, I'm ready. That's what caused me to jump in. It's hard to believe in 10 years where I started from and where we are. The beginning of this, I was a one-woman show working out of my spare bedroom. Today, in addition to the consulting firm, I'm also the majority and managing partner of a billing company and an ASC development company, so we've come a long way, my partners and I.
[Dr. Aaron Fritts]
Yes, and so you had this experience in radiology. When you first started with APA, did you come out just focused entirely on radiology or was it interventional radiology? How did you get that all started?
[Teri Yates]
Great question, and really, I assumed wrongly that the only people who would be interested in hiring me were radiology groups because I'd worked in that specialty for so long. My first clients were very, very large radiology groups. I worked with some of the biggest ride groups in the country in my first year or so, working on quality program development and peer review program design. Pretty early on, some colleagues knew of physician practices that needed help. I started diversifying and getting interested in helping. Anybody who had a checkbook and a pulse when you're starting a business looks like a good client, right?
I kind of stretched my boundaries and managed an ophthalmology group and then got into neurology. About three years in, I got hired by a vascular surgeon to set up his outpatient vascular surgery practice and OBL. At that time, I didn't even know what an OBL was, but I learned. Today, kind of fast forward, working with physicians at the end of vascular specialties, they're about half of our consulting practice. We still do work with other physician specialties, too.
[Dr. Aaron Fritts]
Okay. That was going to be my next question is, what types of practices are you working with, because I've only seen you at OEIS and in the context of endovascular care? I knew you worked with a lot of vascular surgeons like Krishna, but that was my question is, how has that been? Do you find that it's really good to focus on this one space or just the nature of the business, you kind of have to expand out and take what comes your way?
[Teri Yates]
We're at the size that we could decide what we want to do, and we could decide only to focus in this specialty if we wanted to. For us, we actually think we do a better job of serving our clients if we understand the entire physician space, because physicians who do this kind of work need referrals, so it also helps us be more tuned in to the market forces in general. I don't do very much work with primary care, because frankly, they don't like to pay a lot of money for consultants, but I do have a very large primary care network as a client because it keeps me in touch with what they do and what's important to them.
[Dr. Aaron Fritts]
Yes, so it sounds like your focus really, I mean, even if it was ophthalmology, it's the outpatient space where people can do in-office and ambulatory surgery center type procedures, right?
[Teri Yates]
That's 100% correct. I've spent my whole career stealing business from hospitals. I know I sound terrible, like I hate hospitals sometimes, but my husband works for a hospital, my son works for a hospital, my sister works for a hospital, but I've never gone over to that side of things. I've always been more interested in ambulatory care and supporting doctors to be successful in that space.
[Dr. Aaron Fritts]
Yes, I mean, a lot of people do not like going to the hospital, right? Patients included. The outpatient experience is much better, I think not just for the patients, but for the physicians. It gives docs the ability to have more autonomy and learn about business. I mean, that's the other amazing thing. It's like the learning doesn't stop when we get out of training, we don't get any business training. A lot of it is on-the-job training. I talked to Krishna a lot about that, like the challenges of that. He says that he's learned a lot from working with you.
(1) Top 3 Reasons OBLs & ASCs Fail
[Dr. Aaron Fritts]
I want to kind of jump into that to some of these challenges that you've seen over the years that docs-- the trouble they can get into and how maybe you've helped them get out of trouble. Without naming practices, obviously, we want to pull out some of these problems that people have had and learn from them. You've probably seen many practices go sideways. I think that would be a high yield for us to hear about. Let's start with this. What are the top three reasons that you've seen OBLs or ASCs fail?
[Teri Yates]
Well, the first thing I have to say, knock on wood, is that none of our clients have failed yet. In the 10 years that we've been doing this, we've worked with over 70 practices, including 25 practices that have an OBL or an ASC. Everything I'm going to tell you is based on what I've observed in the marketplace that isn't directly involved with our clients, and also things I've seen our clients do that could take them to that brink of failure if they don't turn it around, right? The first qualifier I should give you is, is that of the de novo OBL or ASC projects we've been involved in, where we're starting it from scratch, a third of them don't get past the feasibility study phase because we do our homework at the front end to help the physician understand if it's going to be success.
Our goal is never to take someone's money to help them fail. Sometimes the answer is, "You shouldn't do this," but once you get past that point, there certainly are pitfalls that anybody can experience. This is true in your OBL, it's true in a private practice. I mean, an OBL is just a place to do procedures. The best way to have a successful OBL is to have a successful private medical practice as the foundation. There's a lot of things that can go wrong. Some of the top things are not performing enough due diligence, getting into the project without really understanding where the referrals are going to come to, and if you're leaving a hospital, what are going to be the political pressures that could stop your patients from following you? Some of it is structural, right?
It's as easy as people are used to you being in the drop-down list for a referral in Epic, and if you are no longer part of the system, you're out, you're off the list. Understanding where your referrals are going to come to. Another thing that is very important is having an evidence-based pro forma developed. You need to not only have a very detailed revenue model created, but also really understand all of the expenses that go into running one of these, so you have a realistic projection, not only of how much money you're going to make in the long term, but how much capital you need to get the thing going in the first place. That's really important. People sometimes do undercapitalize because they may know all the things they have to buy and what those things are going to cost, but not really be thinking through how much money they have in the bank just to pay the staff until payments from insurance companies start flowing in. That's particularly risky if you overbuild and you don't start small with your practice. Now, the other thing that will really make one of these businesses struggle is if the owner does not understand and is not prepared to commit the right amount of time to running the business. You are becoming a business owner, you're running a small business.
I tell my clients, rule of thumb, you need to be willing to put in about 10% of your time, four hours a week, into managing your business, answering questions, or giving permission for projects to your staff, looking at your data, understanding your financials. That's hard because all of you like to practice medicine, and there are some physicians who enjoy the business side of things, but an awful lot of them don't. Procedures are your video game, surgeries are your video game, that's what I always say. I think, really, you have to commit in your mind that you're going to spend that time to run the business.
[Dr. Aaron Fritts]
The three, if I can rephrase them, is docs not doing their due diligence, really not understanding, hey, where are these patients going to come from? Having a solid, at least a plan for a referral base set up, right? Number two is having an evidence-based pro forma, knowing what you're-- have an idea of what your expenses are going to look like, a realistic projection of what the revenue's going to look like, what procedures you're going to be doing, all those things. Then, number three is committing some time, at least 10% per week into the actual business, not just focusing on patient care and the procedures.
[Teri Yates]
I should also say, another really big potential mistake physicians make is hiring someone who's not qualified to be the administrator. It's very common to see a trusted family member that may not have experience in this type of business or a friend who has good business acumen that doesn't understand healthcare. That is often a big factor.
[Dr. Aaron Fritts]
A pitfall, yes. Yes, seen that happen as well. Let's talk a little bit about navigating this thing. Let's say you have a doc come to you, and maybe this has happened, because it sounds like you guys are doing your due diligence on your side to make sure that these docs are equipped to, before you even sign on to take them on as a client, you want to make sure that they've checked these boxes. What happens maybe if they're not prepared to do this? What is your advice to them?
[Teri Yates]
Well, first of all, we do that for them. It's a collaborative process. For example, as Krishna is our example that you mentioned, he hired us and we guided him through this process of developing his pro forma, helped him understand the questions that we needed to ask. You don't have to do that alone, first of all. We're very reluctant to take on projects where somebody is skipping that step. We have had a couple of doctors come to us that really did, you know, they had an MBA and they-- when we looked at their business plan and we looked at their pro forma, we said, "You've done this right. Let's just skip this step and get right to it," but we always try to start with a feasibility study. That's a good point where you can take a pause afterward and say, "Is this a go or no go?," and then move forward with the rest of the project.
(2) Interpreting Revenue Cycles
[Dr. Aaron Fritts]
I'd like to hear more about how you educate docs about this, because the whole concept of revenue cycle management, right, what it is and how can we learn more about it? How do you suggest docs learn more about it so it doesn't all fall on you as the advisor?
[Teri Yates]
Yes, well, revenue cycle management is tough. If you'd asked me at the beginning of my journey, "Are you going to own a billing company?," I would have laughed at you because working with insurance companies is miserable. The reason we got into it is because it's a problem with all of our clients. It took us a while, but we were helping people and trying to improve things, but it didn't seem to matter if they were doing it themselves or they had an outside company. It was just always a problem. For me, I think the easiest way to teach a doctor about the revenue cycle is to show things to them visually, because it's a very complicated process.
If I do an assessment on an existing practice that has problems in billing, I'll have a flow chart of every step in this relay that starts at your front desk when they schedule the patient and they register the patient and continues through your documentation and your note and the claim submission process, the whole thing. I just put a flow chart together and show the physician each step in the process so I can say to them, "Okay, step three is where you're having a problem in your practice, and step six is where you're having a problem in your practice." That's the first thing, is break it down so people can understand it.
Then the other thing is it's an ongoing education process. If I'm involved in billing, because sometimes we're just doing assessment, right? If we're involved in billing, you have to also present the data to the physicians in the USA Today format, so that they can see it. Billing reports that come out of these systems are terrible for identifying trends. They're very difficult to understand and make sense of unless this is all you do all day long. We suggest to people, and we do this for our own clients, that whenever possible, you extract the raw data out of the billing system and put it into a data visualization tool like Power BI that you can use to make a lot clearer picture of whether things are going in the wrong direction or right direction, and use this as a tool to drill down and actually fix the places that are wrong.
[Dr. Aaron Fritts]
What's your makeup of customers or clients that are starting a practice de novo versus an established practice?
[Teri Yates]
I haven't counted that, but I guess it's about half and half.
[Dr. Aaron Fritts]
Yes, about half and half, okay.
(3) Choosing Personnel to Handle Finances
[Dr. Aaron Fritts]
The ones that are seeking out your advice or your services that already are in a practice, what are some of the major things other than billing that you see most commonly presenting to you that you need to kind of fix or help them fix?
[Teri Yates]
Well, they come to us many times because of billing, that's obviously one, but they also come to us a lot because they've got people problems. Either they're concerned about their administrator and they feel paralyzed because they don't know what to do about this person. He is the only one who knows how to process the payroll, has the logins for their bank accounts and they're really worried about that, or staffing and retention, right? That's a huge problem in healthcare right now. If they're seeing that they are repetitively having people quit or they can't recruit them in the first place, sometimes they'll come to us to say, "What's going on in my business that is making this an undesirable place to work?" Then the third thing is, is they come to us when they just want to grow. "How do we increase our referrals and build more revenue in the practice?"
[Dr. Aaron Fritts]
To touch on the finance stuff, one thing that I know a lot of practices can't afford to do, even medium-sized practices, is a lot of them can't afford to have like a CFO and so they're managing their own finances. It might be something that they're advising you guys on, but one question is, who should be privy to the finances, because you don't want-- practice manager might be privy to it, but you don't want a lot of people because, like you said, like with staff turnover and everything, that can be problematic. When you're advising on the financial side, who do you say should be in the room for those discussions?
[Teri Yates]
Yes, that's a great question. This is a touchy subject for physicians because a lot of them want to be very private about the financial side of their business, which is understandable. Also, you have to be careful who you share that information with because it's got to be someone that has maturity to understand both the revenue and the expense side of things. For my leaning, is more transparency than less, because I think if you want your management team, anybody who's at a managerial level, if you want them to understand what decisions need to be made, if you want them to push on the right things in the business, they need to understand why. It's not easy, but I encourage more transparency rather than less.
[Dr. Aaron Fritts]
Yes, and I imagine your approach, you would have to be going in there and assessing maybe who has those capabilities in the practice, right? You're probably talking to the practice manager, the head nurse, the head tech, that even maybe some MAs who are-- what's that assessment like? How are you assessing, especially for somebody who has people problems, people problems are really challenging, right? It's because a lot of us docs are like risk averse. We don't want to upset people. How do you help handle that?
[Teri Yates]
You know, there's a lot to unpack in what you just said. Starting at the beginning, when you're trying to evaluate how much information to share with what members of the team, remember it's not an all or nothing proposition. I strongly promote data-driven decision-making at every level in the practice.
That means there has to be different kinds of data shared with people throughout the practice. Everybody needs to know what's my number that matters. Is it the number of patients that I get scheduled every day or how long it takes me to get those patients scheduled? Is it my cancellation and no-show rate? Is it my throughput in terms of procedure room turnover? Everybody has numbers that should be transparent to them that really say this is what success looks like. You have to evaluate the people, but then decide exactly what information on a role-by-role basis to share and have a forum to discuss those things regularly. Now, the other part of what you said is, well, how do you solve people problems? Well, a big part of my personal consulting practice, because I have nine other consultants, so we all have areas that we love especially. I really like digging into the culture and leadership training, so I like to help develop those managers to have them be the best they can be for the practice, but the whole tenor of how people feel about their jobs comes down to how do they feel about the doctors and how do they feel about their managers? That's where I can push and provide coaching and training to improve the morale in an organization, which ultimately leads to better retention of staff.
(4) Dealing with Troublesome Doctors & Staff
[Dr. Aaron Fritts]
What happens when, I'm sure this hasn't probably happened to you, Teri, but what happens when the problem is the doctor themselves? Maybe you didn't realize that until you were already in contract with that group, or maybe it's a multi-physician group and it's just one or two of the docs.
[Teri Yates]
It's frequently that problem, right? It depends on what the nature of the problem is. It's very difficult for me to help someone who is a hostile individual. There's just some physicians that they're going to be throwing things in the office. They're going to be yelling at people. There's only so much I can do with someone that has a personality type like that. The more common problem is that the physicians are afraid to hold people accountable, and so they may stall. It may be because they're afraid they won't be able to replace that individual.
Like I said, it may be that they're afraid of the ramifications or the harm that person can create. You have to have the moral courage to say, "This is how we treat each other here. This is how we do things here," and then use that to determine whether people are measuring up or not. If there are people that don't fit with your values, you have to be willing to remove them for the good of the entire team.
[Dr. Aaron Fritts]
Then you're going to maybe the physician leadership and inviting them that, "Hey, look, this is not a problem that maybe somebody's got to talk to him and it may not be-- it might be the physician leader is the best person, right?"
[Teri Yates]
It's tough. Most of my doctors see me as kind of their personal business coach. Some of those are really hard, agonizing decisions. I mean, we just started working with a practice that has been around for, I don't know, 60 or 70 years through many generations of partners. I just had to help that practice understand that their administrator who had been their employee for 46 years was their biggest problem. Having to part ways with someone that you've had a four and a half decade relationship with, that's emotionally very difficult. Having me put it in objective terms and provide support through that process empowered the physicians to do what needed to be done, even though it was really hard.
[Dr. Aaron Fritts]
Yes, and it's good from the physician side to have somebody, I think, like yourself, who can draw from experience to say, "Look, this is my advice to you." It's not coming from another physician. It's not coming from somebody within the group. It's an outside voice who sees what's going on and can give some objective advice. I imagine that's super helpful.
[Teri Yates]
There's something very empowering about not being an employee when you have to do that, right? If I have to tell people, this is a kind of a weird way to put it, but I have to tell people on a regular basis that their baby is ugly. That's hard to do, but it's easier to do if you know that if they dislike hearing that and they don't want to stick with you after you've said it, life will go on. I'll just work with other people. It's no problem.
[Dr. Aaron Fritts]
Yes, but their problems won't go away. Their baby's still going to be ugly.
[Teri Yates]
Correct. Listen, I don't usually get fired for telling somebody that. I don't think I ever have. I have frequently have had people not listen to me the first three or four times I tell them that, but we joke, we shrug internally and say, well, we bill by the hour, so if I have to do it four times.
[Dr. Aaron Fritts]
Yes. No, it's hard to take. It's hard to take, especially when some people put a lot of work into it. The other thing I want to touch on is operational efficiency, room turnover, patient satisfaction, all those kinds of things. They seem like a no-brainer to help the bottom line. Where do you typically start when you're thinking about this and where this seems to be an issue for an existing practice?
[Teri Yates]
I think the hardest thing about being the doctor or the administrator is that things that you see every day, you can't see anymore. The exercise in many cases is to start and pretend like you're seeing things for the first time. I will say, look at a small number of patients and do an end-to-end analysis of what happens to that patient through their journey in your practice. Follow what happens when they were scheduling and talk to the people involved in it. Look at the registration process and how the medical assistant rooms the patient. Look at if a procedure is indicated, what the process is to get the prior authorization and follow them through their journey through your OBL and on procedure day.
The thing about it is there are probably 20 stupid or wasteful things that are going to happen along the way on that journey that your staff already know about, complain about or frustrated about, but either they don't feel empowered to tell someone in leadership about it or they don't think there's any alternatives, so they think it's a waste of time to bring it up, or they are telling leadership and someone that they're telling this to isn't prepared to make those changes.
(5) Overcoming Analysis Paralysis in the Startup Phase
[Dr. Aaron Fritts]
Yes, it's true. I wanted to touch real quick on the doc who is back in that planning stage, they're excited, whether it's them or a co-founder or a group of docs, they want to go out and do it on their own. They want to build an OBL. What I've seen happen, and I've had a couple of people that told me to ask this because they knew I had you coming on, was what do you do in the case of analysis paralysis where the docs, they're in that pro forma stage and they just can't get out of that pro forma. They're going back and forth about the numbers and they can't seem to get that momentum to take the next step. A, do you see that often, and B, what do you do for those docs that are stuck in that kind of stage?
[Teri Yates]
I don't see that often because our process for doing the feasibility study leads to an end point where it's so rigorous that they feel like I can do this or I can't do this at the end, because we've really got it nailed down. It doesn't take a long time to do that. I mean, usually like four weeks, right? For us, what I do sometimes see, especially with interventional radiologists, is everything looks good in the pro forma, but there are broader issues within the practice that interfere with moving forward. It's not only interventional radiology.
I mean, we did a feasibility for a vascular surgery group that they were really a vascular surgery section within a very large multispecialty surgery group that their board wouldn't sign off on building their OBL for four years. That's the longest pause I've ever had in one of these projects. They did eventually gain the support from their colleagues and build a coalition to get the project going. We've had a lot of very motivated IR physicians that convinced leadership to at least examine the situation, but when push came to shove, the DR members of the group were too afraid to alienate the hospital to move forward.
I get that because I was in radiology for a long time, but that's something that usually happens. We don't see people get stuck and just say, "I'm not sure if I can do this."
(6) Startup Timelines & Regulations
[Dr. Aaron Fritts]
Got it. Yes. I mean, and then there's other things that can kind of throw a wrench in the gears like construction. Right? I've seen that happen where they want to own it, they want to build it on their own, but for whatever reason, construction gets delayed, distractions happen. How often do you see that sort of stall a project?
[Teri Yates]
Well, a lot, especially for do-it-yourselfers. We know that on average, it's about a six to nine month project start to finish to start a new practice and turn up an OBL. ASCs are longer. We've seen that there are some people who try to do this themselves and they work on it for quite a while. Then at some point, they start to get nervous that, "What if I'm forgetting something?," and they'll call us. Those people, you know, usually I think they're doing it because they want to save money, but also they want control, which is appropriate, right?
A lot of the reasons that people are leaving hospital employment or leaving a group is because they want the ability to do it their way. The opportunity cost is problematic because they have to factor in how much money they're losing every week that they're not operating a successful business. You have to go in the right order with the steps, and I think that's key.
We talked about financial feasibility, but you've got to do a regulatory review before you start of what's required in your state. I can't believe how many people have not done that, that have existing OBLs. You have, in some states, accreditation requirements, in some states, healthcare facility licensure requirements. In almost all states, the state medical board may impose certain requirements. If you're giving sedation, there are office-based surgery rules. You have to understand that before you start. You should understand that before you start. Then, you're right, the real estate side of these equations can be very, very challenging, and you have to make thoughtful decisions about, "Am I going to lease? Am I going to own real estate? Does it make sense to own real estate as phase one? Is that too big a lift financially? Should I start shorter term with a lease?" All of those things require analysis and, you know, they're not easy decisions, but that's part of what we do is try to help people move through that and make the right choices and do it so efficiently.
[Dr. Aaron Fritts]
Remind me, what is it, I think Nashville has this, it's like a certificate of need or a proof of the patient population actually needs an OBL in that area.
[Teri Yates]
So that's pertinent to an ASC. I'm not aware of any states where there's a certificate of need in place for an OBL because an OBL is just your practice, right? It's just a part of your practice. Most of the regulatory standards that could affect an OBL, and in some states there are none, but most of them are more oriented around patient safety. In the ASC market, many states do have a certificate of need where you have to prove that there's a community need. You may be defending your application against hospitals that are contesting it. Some states, Ohio doesn't have any certificate of need. You can do what you need to do, but there are guardrails and safety standards. In some states, Tennessee is a very difficult place to build an ASC.
[Dr. Aaron Fritts]
Yes. I've heard of that bit, stalling people. Have you ever seen it where somebody actually builds something out and then they realize after the fact that they need a CON in that city?
[Teri Yates]
I've not seen that, but I will tell you, and this was just tragic. We got hired by someone to do their billing. It wasn't a consulting client, and they had a brand new OBL, and as I got to know them better, I learned that the architect they hired was not experienced in ASC design, and they hadn't done the proper regulatory analysis. They thought they were building an ASC. Their business plan was predicated on doing procedures that could be done in an ASC, and they found out halfway through construction, they would never be able to get accreditation. What they ended up with instead is a very expensive OBL with less patients than their original projection because some of those cases weren't OBL-appropriate. Brutal, right?
[Dr. Aaron Fritts]
Yes, that is brutal. Do you just help them plan for expansion or-- I mean, building a new, a fresh site or they just continue business as usual? I mean, I understand you didn't get hired as an advisor, but what would you advise them if that was the case?
[Teri Yates]
Well, obviously you have capacity in terms of location, but you can make some operational decisions in terms of how much of that capacity to staff, how much equipment to buy. In that case, if you don't have enough volume to meet the original capacity, then you start having to try to shrink down equipment and personnel and use what you can to do what you can, but it's a bad outcome.
(7) OBL & ASC Market Breakdown: IR, IC, & Vascular Surgery
[Dr. Aaron Fritts]
Yes. I wanted to ask you, actually, I meant to do this at the beginning. What is the breakdown that you see out in the OBL/ASC space of IRs, ICs, and vascular surgeons? Is there one that you see opening up more than the others? Have you noticed a trend recently?
[Teri Yates]
In my practice, we have observed a lot more vascular surgery and interventional cardiology practices than IR. I know there's some highly successful IR OBLs out there, but still, I think the problems with their DR relationships or hospital privileges and the exclusive contracts have limited that. I also would comment that I see a lot more progress on that front in the last year or two. In fact, we're working on an OBL for a physician group. It's radiology group right now. We also are seeing more integration of IR into existing vascular surgery groups. Two of my vascular surgery clients have hired IR physicians this year. I think the growth area may be a little bit more emerging for IR.
[Dr. Aaron Fritts]
Yes. The whole hospital privileges thing is super challenging and the bizarre, the strange relationship with DR. You've experienced a variety of different practice types. What's your outlook on the future and collaboration of the endovascular specialties?
[Teri Yates]
I expect to see more multi-specialty groups. I think it's inevitable because vascular surgery has a big demographic problem. They're going to need both integrated into their own practice and collaborative with other physician practices. They're going to need a lot more hands on deck to do the catheter work that can be done by other specialties. I was reading some data about this from the AMA. This is as of 2021. It might be a little different now, but there were just over 4,000 vascular surgeons and interventional radiologists, about 4,700 interventional cardiologists, but the difference is 44% of the vascular surgeons are over 55 years old, 44%.
Only 16% of the interventional cardiologists are over 55 years old, 26% of the interventional radiologists. Do the math. They're in a tough position demographically, and they're also not bringing out as many new doctors every year. It really points to the need for all of these specialties to be actively involved in providing endovascular treatment, in my opinion-
[Dr. Aaron Fritts]
-and working together. That's some great information, Teri, because I did hear something about how they weren't training as many vascular surgeons in residency, how the training programs had kind of shrunk down in size. Yet, IR was supposed to be starting to crank out more IRs, and so they were thinking that that was going to maybe lead to more endovascular care. Clearly, you still need open vascular surgery options, right? I mean, you need the comprehensive care. It's great to see practices like Jim Melton and Blake Parsons, Chad Laurich, Neal Khurana, Krishna and his new partner, Dr. Khayat, these multidisciplinary vascular surgery IR teams and sometimes involving ICs. I totally agree with you. I think that's the future.
I think that over time, IRs are probably going to start continuing to break off from diagnostic radiology and even come out of practice and join the vascular surgery group or just whatever, a collaborative group that was founded with both. I think that's the future. Unfortunately, we just had this New York Times article come out recently that was kind of just mudslinging towards the OBL/ASC space. There's bad players in every specialty, right? I didn't think that the article really helped the endovascular specialties. I felt like it hurt them. I just hope to see more collaborative efforts going forward. I felt like that it was a step back for us. Care to comment on the article and what your thoughts were?
[Teri Yates]
Yes. I mean, there's more I could say about this article than we have time for. It was very discouraging in a lot of ways, but I will say this. Obviously, one of the big takeaways has been the subsequent fallout that centered around interventional cardiologists and interventional radiologists and their ability to provide the whole continuum of care on their own, because patients sometimes need surgery. Sometimes, the first indication is surgery instead of endovascular therapy, and sometimes your patients that have endovascular therapy ultimately need a surgery at some point. It's been disappointing to see some of what's been written that seems very territorial and exclusionary.
I want to say that I feel encouraged by the fact that I don't think that seems to represent how most physicians I know feel. Just even yesterday, I was at an OEIS regional chapter meeting, there were probably at least 20 docs, including Dr. Mustafa, talking about the article and what the call to action should be in light of that. The prevailing theme throughout was, we should not be demonizing each other. We need to be working together to provide quality care for patients. I find that most of the people I know looking to find ways to work together, instead of battling over turf, encouraging and optimistic. I just wish that that was more visible.
[Dr. Aaron Fritts]
Yes, totally agree. Well, any final thoughts, Teri, anything that we didn't get to that I didn't ask you about that you want to get across to the audience?
[Teri Yates]
I think we've covered a lot today, and I think the main thing that I would want physicians to understand is that it's possible to be successful in private practice. It's possible to be independent. There are a lot of people that think that consolidation is inevitable, that there's no path forward for the future other than hospital employment or employment by a private equity firm, but there are people that are well-suited to own their own businesses. Those are the people that we are really excited about helping do that, but it's not inevitable.
Private practice is not dead. That's what I want people to know.
[Dr. Aaron Fritts]
Yes, I think that's great because there are some programs out there telling everybody that they should just be hospital employees, which I think is bad advice. I'm speaking of some ENT practices that I know that-- they make it seem like private practice is a doomsday scenario, which is not true at all. I think that it offers autonomy, it offers new challenges, it offers so much more than a hospital-based practice. Also, honestly, yes, you have to work hard and work on the business side, but you're not tied to the hospital, which is nice.
Hospital privileges are important, for sure, and you want to make sure that if anything goes wrong, patients have good care, but you're not slugging away in the hospital, which takes a toll over time. I know a lot of happy people that are out in the OBL space, and I like that we're seeing more of them collaborate, multi-specialty. Thank you so much, Teri, for sharing your wisdom, and I appreciate you coming on, and hope to see you again either in Columbus or at another OEIS meeting.
Podcast Contributors
Teri Yates
Teri Yates is the CEO of Accountable Physician Advisors.
Dr. Aaron Fritts
Dr. Aaron Fritts is a Co-Founder of BackTable and a practicing interventional radiologist in Dallas, Texas.
Cite This Podcast
BackTable, LLC (Producer). (2023, September 18). Ep. 366 – Navigating OBL & ASC Business: Pitfalls to Avoid [Audio podcast]. Retrieved from https://www.backtable.com
Disclaimer: The Materials available on BackTable.com are for informational and educational purposes only and are not a substitute for the professional judgment of a healthcare professional in diagnosing and treating patients. The opinions expressed by participants of the BackTable Podcast belong solely to the participants, and do not necessarily reflect the views of BackTable.
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