As nearly 100 doctors abandon Atrium Health, some experts see the start of a trend

The surprise exodus of nearly 100 Atrium Health doctors intent on leaving the hospital system has some industry experts saying it could be the start of a trend in Charlotte and elsewhere.

In bucking a nationwide movement of hospitals gobbling up independent doctor practices, the Charlotte physicians have criticized Atrium's practices as bad for patients, including a claim that doctors are ordered to make referrals to Atrium-owned or managed facilities.

For consumers, experts say that doctors breaking away from hospitals could mean lower costs, because patients often pay less for treatment at an independent practice than a hospital system — with its larger negotiating power over insurers.

Some doctors across the U.S. have become discontent after years of being employed by hospitals, which can impose patient quotas and leave doctors with limited control over business decisions, according to experts.

"I wouldn't be surprised if more large, multispecialty physician practices found ways to remain independent of, or break free from, hospitals," said Barak Richman, a Duke Law School professor specializing in health care policy. He added that such a move isn't an option for every practice, though.

"Only certain physician practices will have the capacity to break away from a hospital system as dominant as Atrium," Richman said. "The administrative burdens of running a practice are high, and few physician practices have the resources to do that effectively."

For its part, Charlotte-based Atrium said it remains an attractive employer that continues to hire talented workers, and it is not aware of any other doctors groups with plans to leave. Its physician turnover rate was 5 percent in 2016, below 7.3 percent nationally that year, the latest for which Association of Staff Physician Recruiters figures are available, Atrium said.

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Atrium CEO Gene Woods, who took over in 2016, said the doctors departing this year make up a relatively small portion of the 2,000 physicians employed by the system.

"I think there is some value focusing on the fact that 1,900 of those physicians have stayed and more are coming," he said, adding that the system typically loses about 100 doctors in a given year.

But what is unusual here is the large group of doctors planning to leave Atrium are all in the same practice, Mecklenburg Medical Group, which provides primary and specialty care in areas including cardiology, dermatology and sleep medicine.

Their departure comes as Atrium has been making company-wide changes, from staffing models, to how patients are cared for, to the way doctors are compensated.

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Atrium has repeatedly said such efforts are designed to grow services for patients, reduce patient costs or improve care. But the sweeping changes have also been cited by other doctors who have left in recent months.

That includes about 10 pediatricians in south Charlotte who didn't renew contracts because of changes Atrium made to their compensation, the system said. In some instances, the changes resulted in higher pay, but pay was cut in others, according to Atrium. The move was part of a plan to standardize different compensation models Atrium inherited when it acquired the pediatrician practices, the system said.

Last year, seven rheumatologists who worked for Mecklenburg Medical Group also left to form their own independent practice, according to Atrium. It said the rheumatologists indicated they wanted to leave because of compensation changes.

In a lawsuit filed last month to free themselves of non-compete agreements, the Mecklenburg Medical Group doctors accused Atrium of making changes detrimental to patient care and physicians' "ability to adhere to their ethical and medical duties."

Atrium has denied its changes will harm patients.

"We can't force people to want the same things that we want," Woods said. "It actually quite frankly would probably be an anomaly if every single physician decided that they were going to sign on to the new way of doing things."

It's also not clear if Atrium would waive non-compete restrictions for other doctors in the future. The non-competes had banned the Mecklenburg Medical doctors from operating near Atrium facilities if they left, a restriction that would have made it difficult for them to continue practicing in the region. Atrium said it evaluates non-competes on a case-by-case basis for doctors who express a desire to leave.

Consolidation trend

Across the U.S., independent doctors practices have been rapidly disappearing, in large part because of acquisitions by hospitals and in some cases by insurance companies. Factors often cited for such sales include difficulties independent practices face to stay profitable, as well as doctors' desires to be relieved of burdens associated with running a business.

U.S. hospitals employed 42 percent of physicians as of July 2016 — up from 26 percent four years earlier, according to findings released in March by the nonprofit Physicians Advocacy Institute.

During that period, every region in the country reported a rise in hospital-owned practices, with increases in some places topping 200 percent, the report said.

James Robinson, a health economics professor at University of California, Berkeley, said the consolidation trend is also cyclical.

What often happens, Robinson said, is hospitals will buy practices they see as floundering and then implement changes, which doctors sometimes become frustrated with.

"Right now we're seeing a lot of acquisitions," he said. "That will be followed by a wave of divorces for sure."

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Hospitals might also determine that doctor practices do not generate enough revenue to offset the cost of running those businesses, said Jane Orient, spokeswoman for The Association of American Physicians and Surgeons.

"And physicians may find the work conditions oppressive and the work unsatisfying as they become assembly-line workers instead of their patients' doctor," she said, adding, "The Charlotte action is the first I have heard of, but I hope it will be the beginning of a trend."

Meanwhile, recent Atrium surveys of some of its physicians and advanced clinical practitioners — positions that can include physician assistants and certified registered nurse anesthetists — show a mix of views on working for Charlotte's dominant hospital system.

According to a 2016 internal Atrium report obtained by the Observer, some respondents felt valued and appreciated by system leaders. But others complained about poor communication, lack of autonomy and that the system's priority seemed to be on its bottom line rather than patient care.

Scott Rissmiller, deputy chief physician executive at Atrium, said the results came from an informal spot survey and focus groups. He emphasized that a small population of employees were involved, and some questions received less than 200 responses.

Atrium has continued to show improvement on its official employee survey scores, which are in the top 25 percent for similar U.S. health care systems, Rissmiller said.

"We work hard at it and continually ask hard questions to look for areas to improve," he said.

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What's in it for consumers?

Patient advocates calling for more independent doctor practices say it would be good for consumers by introducing more competition for hospital systems and providing a lower-cost alternative.

The Physicians Advocacy Institute report said Medicare paid more when patients were treated in a hospital than by an independent doctor. For cardiac imaging, for example, Medicare paid $5,148 at a hospital — nearly 80 percent more than at physician-owned office.

But when doctors at hospitals go off on their own, patients can also face difficulties.

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For one, patients might find those physicians are no longer in their insurance plans, said Michael Thompson, a professor in the Department of Public Health Sciences at UNC Charlotte. Also, patients might need to travel to new, further locations to continue seeing their same doctors, he said.

"The transition can be very disruptive, confusing and upsetting to patients, if not well communicated," Thompson said.

That's a concern for Norman Cook. The 80-year-old Charlotte resident is worried about where his long-time doctors in Mecklenburg Medical Group will relocate.

"All my doctors are leaving," Cook said.

"I live within a mile and a half of their current facility," he said. "There's no doubt it will be less convenient for me, without question."