Last week, PCC hosted the first Pediatric Supergroup Conference in New York City.
For two days, pediatricians from across the country convened to learn from and with each other. Formal sessions were presented by subject matter experts, with topics ranging from navigating EHR selections, conversions and mergers, to the legalities of supergroup formation, to a primer on how to include self-funded employers in your client base.
One of the most dynamic segments of the conference was when the attendees themselves were given time to tell their own stories, to share their journeys to becoming successful supergroups. The sharing of tips related to what worked, pitfalls to avoid, and considerations to keep in mind throughout the process were invaluable to everyone in the room, particularly those in the beginning stages of formation. Many sentiments were echoed between those who shared, underscoring the importance of specific topics to keep in mind when involved with a supergroup at any stage. The following are a collection of the common themes that emerged from this dialogue.
Things To Consider Before Joining A Supergroup:
Why Do It? The Benefits of Forming a Supergroup
Banding multiple practices together to form a supergroup can provide many benefits, some of which include:
- The ability to stay independent as a pediatrician in a time when many practices are being bought out by hospitals
- Pooling resources to continue providing high quality care despite rising costs
- Increased negotiating leverage with insurance companies
- Overhead reduction due to shared costs
- Volume discounts for supplies
- Ability to stockpile vaccines with group purchasing power
- Increased market exposure due to larger size
- Opportunity to utilize the different strengths of each member to benefit the whole group. For example, one partner is great at IT, another is interested in HR, another likes marketing, and yet another is great with finances and negotiations.
Likemindedness Is Key
Likemindedness was a word that made an appearance in almost every story. Attendees emphasized that this trait was the key to their success as a group. Likemindedness manifested as having similar desires, such as wanting to remain independent and retain autonomy in practice, having the willingness to listen to each other and spend time building trust, wanting to put the effort in to plan present and future outcomes, and having the ability to compromise for the good of the group. More than one person talked about going into a supergroup not just as a way to increase revenue, but thinking of it as a way to provide the best quality of care possible through the sharing of talents and resources. One doctor mentioned that for him, likemindedness was working with others who had a service mentality and not a 9-5 mentality. Similarly, someone else said that if you don’t have a service mentality going into a supergroup, then it’s harder to remain autonomous and happy once you are part of one. Yet another pediatrician made the point that likemindedness is not literally about agreeing on everything, but moreso, having similar values and vision for the practice. In fact, many attendees shared that the debates and discussions that arose from differing opinions and personalities often led to the best consensus in the end, after people remained willing to listen and engage in the conversation.
Take Your Time At The Beginning
Many of our attendees mentioned taking at least one to two years to form their supergroup. Taking the extra time to plan wisely at the front end led to better success later on. One pediatrician emphasized that you can’t be afraid to spend money on lawyers, consultants, and accountants in the beginning, saying that if you skimp on this kind of expert advice at the start, you will pay for it in the end. Developing an agreed-upon business model is essential. Many supergroups are set up as “groups without walls,” meaning they are multiple autonomous practices in separate locations, but are aligned financially, with centralized billing under one Tax ID number. Others were separate practices that came together under one roof when they became a supergroup. There is no “right” way to be a supergroup, but the important thing is to take the time to carve out the vision of how you want it to look, rather than start the process without fully thinking it through. As one doctor noted, “It takes effort. It doesn’t happen just by wishing for it.”
Some of the things to decide on before forming a supergroup are:
- Will you remain in separate locations or come together under one roof?
- Will you all convert to using the same EHR system, and if so, which one will you choose?
- What is your plan for future growth? Do you want to expand to new locations? Do you want to work toward PCMH? Do you want to continue to add additional practices?
- How will you address Human Resources decisions, i.e. employee benefits, vacation time, retirement plans
Expect Culture Shock
Going from an individual practice to a supergroup is a big change. Suddenly everyone has a new and bigger set of coworkers. Sometimes roles and expectations shift. Everyone who spoke mentioned the experience of company culture shock when their supergroup formed. Most people concluded though, that this is not a sign you have made the wrong decision. Merging separate practices and personalities comes with an adjustment period, and it will behoove you to remain sensitive to others throughout the process. Many pediatricians spoke of the need to get past the “us versus them” mentality that had a tendency to rear up when practices merged into a supergroup. One doctor said that compromise was key in this instance. To paraphrase one attendee, you take one doctor’s warm and fuzzy bedside manner and the other doctor’s rigid, always-on-time manner, and move past those extremes to allow the middle ground between to form the new company culture of the supergroup. Another pediatrician commented that in forming their group, they had to let go of trying to hang onto the way they had always done things and work together to “build unique processes that are ‘us’ and not ‘I’ or ‘me’.” Someone else shared that it took almost two years after formation for the company culture to smooth out. During that time, emphasizing communication between coworkers and building the quality and strength of management were key tools to success.
Things To Consider Once You Are Part Of A Supergroup:
Consider Adding Ancillary Services To Increase Revenue
Several supergroup members spoke about offering additional services to boost cash flow such as:
- Lactation Consultation
- After-Hours & Holiday Appointments 365 Days A Year
- Travel Medicine
- Obesity Initiatives
One doctor shared that the profits generated from these services went a long way in making up for the increased overhead involved in being part of a supergroup.
Consider Enlarging Your Footprint
Many supergroups we heard from started on the smaller side and grew to include more practices within the same city, or even across an entire state. Time and again, pediatricians commented that one of the smartest things they did as a supergroup was to enlarge their footprint. One supergroup started with two practices, and grew to include 9 offices across 4 counties. Another started with 7 practices in 12 locations and expanded to 9 practices in 15 sites within the same large city. Yet another supergroup has member practices who are hundreds of miles apart, spanning a whole state. In this instance, the large geographical bandwidth was the result of wanting to identify and work with other likeminded practitioners. Expanding your footprint brings more visibility to your supergroup, and provides more access points for patients to utilize services, hence contributing to the growth of the practice.
One pediatrician who spoke about enlarging your footprint suggested identifying growth areas in cities, and either expanding into those neighborhoods or bringing in existing practices from there. The reason behind this came from noting patterns in demographics over the years. The observation was that young families who are starting out often move into more affordable up-and-coming neighborhoods. When this happens, pediatric practices in those areas are flooded with business for about 10-15 years as families have children. After about 15-20 years, the market is saturated and business slows as children grow up and move on. In order to prevent an eventual slow-down, it is prudent to enlarge your supergroup by expanding into areas of new growth, where families have young children to bring into the practice.
Consider Centralized Services
As a supergroup, consider centralizing your:
- Human Resources
- Accounts Receivable
One pediatrician shared that their supergroup took all the best billers from each practice and placed them together in a centralized location. Over time, their billing department became so efficient, with days in A/R in the single digits, that this became a selling point when approaching new practices about joining the supergroup.
Additionally, when you omit these services from each individual location and put them all together, it means an overall reduction in costs.
Consider Your Future
Once you establish your supergroup, the work is not over. Successful supergroups are constantly evaluating themselves and planning for the future. Many supergroup members talked about having regular ongoing meetings to assess their progress, as well as annual strategic retreats where they have the opportunity for intensive focus. Attendees at the conference mentioned various topics to address when planning for the future. Here are some things to consider based on their comments:
- What is your plan for growth? Will you expand to new locations? How many practices would you like to have join your supergroup over time?
- Will you remain specialized in pediatrics, billing under a single taxpayer ID, or will you expand to include other specialties and multiple tax ID’s?
- Will you remain a supergroup without walls or come together under a single roof, or vice versa?
- Are you interested in adding telemedicine as a part of the services you offer, and if so, how will you implement it?
- Are you planning to increase the number of ancillary services you offer?
- How will you continue to grow your client base? Would you consider adding self-funded employers as clients and what is your plan for initiating that?
- With constant offers to sell out to hospitals, where does your group stand on its commitment to remain independent over time?
After two days of thought-provoking talks and shared information, the consensus seemed to be that this was just the beginning of an ongoing conversation. As more and more pediatricians choose supergroups as an antidote to hospital buy-outs, these discussions are imperative. We need the voices of experts, as well as the voices of the members of supergroups themselves, sharing what they have learned in order to help others who are at the beginning stages.
As two pediatricians shared when speaking about their overall experience with supergroups,
“In the end, doing this has been a dream come true” …. “We are better together than in competition.”
We look forward to continuing the conversation.