Dr. Vivian Ziltzer places her Starbucks order through her smartphone. “It’s magic,” she says. In a few minutes the baristas call her name, and she’s got a steaming cup of joe in front of her without waiting in line or having to turn down sales pitches for the new cinnamon croissant.
Ziltzer isn’t one to decline a good life hack. She knows technology is booming. But as a pediatrician who has owned her own Valley practice for the past 26 years, she knows the pitfalls of progress, too. Recently, she stopped seeing patients to focus exclusively on running the operations at North Scottsdale Pediatric Associates.
Technological pressures, rising costs of care and governmental regulations are pressuring private-practice doctors like Ziltzer to sell the farm, so to speak. The buyers: hospital giants like Banner and HonorHealth, which have the large-scale resources to weather changes in the healthcare industry and are gobbling up private practices in the Valley at a furious pace. The Mollen Clinic is one well-known, formerly physician-owned clinic that has merged with a larger healthcare group in the last year. Other recent acquisitions include Banner buying Southwest Women’s Health, Southwest Pediatric Endocrinology and Biltmore Health Primary Care; and Phoenix Children’s Hospital purchasing Arizona Pediatric Cardiology Consultants.
The pattern has been trending upward across specialities for the past four years or so. Ziltzer doesn’t see that as innately bad, but she intends to stay private as long as she can.
“It’s all about autonomy,” she says. “It’s about being able to make decisions on behalf of our patients without any outside influence.” Staying private allows her and the 13 other physicians at her practice to maintain control within their walls – over things as serious as which treatment to recommend to patients down to the trivial, like which magazines are in the waiting room.
“If you’re bought out by a large hospital… it just takes that much more effort to go up the chain,” Ziltzer says. If she has a problem employee, for example, instead of simply handing him a pink slip, a practice under the umbrella of a large group has to navigate a significant amount of bureaucracy to request his firing. “It becomes more of a business,” Ziltzer says. And most doctors, she says, just want to see patients.
Medical practitioners serve a vital need, but on the other side of the patient room wall is often a doctor trying to pay bills and employees, market to new patients and comply with technological demands and governmental regulations. That’s why Ziltzer says her ultimate goal now is to remain private, but to partner with other private practices so they can pool resources. “It’s economy of scale,” she says.
Dr. Mystie Johnson Foote is the CEO of Banner Medical Group, the physicians’ wing of Banner Health, which has 29 hospitals in Arizona and is the largest private employer in the state, with more than 47,000 employees. An OB/GYN by trade, Johnson Foote started her private practice, West Valley Women’s Care, after residency. It didn’t take long for her to realize she was treading the same waters Ziltzer is trying to stay above. “As the practice grew, it became very difficult for me to manage taking care of patients and also running the operations of the business,” Johnson Foote says. Eventually she started a family and felt the need for a better work-life “harmony,” as she calls it, and found she excelled on the business side. So she left her practice – which still operates – for Banner. Now, she’s on the buying side of the equation, helping Banner find Valley practices and physicians to add to its roster.
By the Numbers
64% Doctors placed into hospital jobs instead of private jobs by medical career placement firm Merritt Hawkins in 2014 (up from 11 percent 10 years earlier)
35% Cardiologists employed by hospitals in 2012, up from 11 percent in 2007
43.3% Doctors under 40 who owned a private practice in 2012, compared with 60% of doctors over 55
33% U.S. doctors that will remain privately employed by the end of 2016, according to estimates from management consulting firm Accenture
“A common scenario is, a hospital doesn’t have enough private practice physicians in a certain specialty to cover calls for the emergency department,” Johnson Foote says. “Banner Medical Group will then either hire or acquire to fill that need.” Those specialists may then create a need for additional primary care physicians, and the dominos fall.
As hospital groups continue to acquire, though, that game of dominos can start to sound more like Monopoly. But Johnson Foote says a monopoly is a statistical impossibility. “There’s a broad enough need for physicians and for the services that… we can’t do it all. Banner couldn’t be every single hospital in town,” she says. “It’s just too much for a single entity to take on.”
