American College of Physicians: Internal Medicine — Doctors for Adults ®

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Managed care and the generation gap

How two generations—in one practice—face change

From the March 1997 ACP Observer, copyright © 1997 by the American College of Physicians.

In the Philadelphia area, it has been said, patients prefer the parish type of practice—the small private practice of one, or maybe two, physicians working out of the neighborhood. That makes the story of general internists Seymour Siegel, FACP, and Joel M. Glassman, MD—15-year partners in the affluent railroad suburb of Jenkintown—a common one.

Theirs is an amiable partnership that has worked well, despite the fact that they are from different generations and at different points of their careers. While Dr. Siegel anticipates retiring in a few years, Dr. Glassman eagerly awaits the 25 professional years ahead of him. They are successful and continue to be busy, even as their largely senior clientele begins flocking in droves to HMOs.

The problem is that everyone insists that the parish style of practice will be difficult to maintain into the future. It's not very efficient for managed care, the reasoning goes, and managed care is here and growing. That argument is not just hype; Medicare HMO enrollment in the five-county Philadelphia region topped 26% in December 1996, according to HCFA.

The pace of acquisitions and mergers in the area, which started only about three years ago, continues unabated. Both hospitals where Drs. Siegel and Glassman work want to buy them, a third has made them an offer and two others have called to feel them out. So far, the partners' answer has been a clear "no," but the flurry of activity—and fears about the future—have produced a tension that didn't exist between them in the past.

"I might have been more agreeable to selling out at this stage of my career where I might retire anytime in the next number of years," Dr. Siegel said. "But my partner is a lot younger and is not ready to sell out." It is an opinion that Dr. Siegel said he respects.

Dr. Glassman's biggest fear about selling the practice is becoming an employee, of working for someone else. "If they own you, they can change your hours, they can change your location, they can change whom you work with, they can change your salary," he said. "And once your contract is up in five years and it's time to renegotiate, they can say to you, 'Dr. Glassman, you didn't make as much money over the last five years and I'm going to have to cut your salary.' Or 'You're costing us too much money and now we have two new doctors coming in who are going to cost us a lot less. See you later.' And then where do I go? I've sold them my patients."

Both men agree that nobody is offering them enough money to change their lifestyles. "Nobody wants to offer me an outrageous sum of money, particularly by the time I pay taxes out of it," Dr. Glassman said. "To be honest with you, that kind of money would be unrealistic."

The internists have explained to potential suitors that their age difference means each has different needs and desires for partnership, but so far no one seems to have been able to come up with a proposal to address the issue.

Meanwhile, Dr. Glassman isn't looking to burn bridges. He has contributed money to help physician networks at various hospitals get off the ground, and he recently joined a loose network of independent physicians that hopes to bargain for better managed care contracts for its doctors. So far, though, he has seen little more than promises.

Only in the last few years have the partners begun contracting with U.S. Healthcare. As Dr. Siegel explained, they put off working with the giant HMO for a long time because they felt the discounts were too deep. "But we decided to take them now because of the future," he said. "My partner felt that it was the way to go, and I guess I agreed, although you wonder how many of our patients we would have lost if we hadn't joined."

What's the worst that can happen? For Dr. Glassman, the beginning of the end of practice as he knows it occurs when he gets squeezed by managed care companies to the point that his profits can not sustain the practice. "Then, I will have to go to Abington and Einstein [hospitals] and say I'm crying uncle," he said, "and beg to join their staff and take less compensation because I'm the one who needs them.

"Right now I'm not getting squeezed to that degree," Dr. Glassman said. The practice did suffer a 10% drop in business last year, but both doctors said that it was due to more than just managed care. For instance, a consultant didn't refer them as much work as he had in the past, Dr. Glassman said, and the two physicians opted to work fewer hours.

"If I lose a few bucks, OK," Dr. Glassman said. "But if I lose too much, then I'll have to make a different decision, and I'm not at that point. When all is said and done, it's a lot easier to stay here with Seymour, do our own thing and wait and see."

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