The Business of Medicine

The local landscape of medical businesses has changed dramatically over the past few decades. We visit some local practices with newer business models that are working well both for physicians and the people they serve.

There was a time when, if you got sick, you went to the doctor. If you got really sick, you went to the hospital, where you might be visited by a specialist. Period. Today, however, a wider range of options are available to consumers, since several innovative business models have sprung up in the northern Illinois medical marketplace over the past few decades. Some are so innovative, they’ve garnered national attention.
Although the changes have occurred gradually, they’ve dramatically altered the way that many local practitioners do business. Just a few of the trends: Stand-alone, full-service surgical and specialist centers; on-demand emergency services outside of the hospital ER; independent doctors sharing administrative staff and business locations; and medical centers that emphasize disease prevention and wellness as much as treatment.
Here, we take a look at just a few of the innovative practices that have changed the local landscape as it pertains to the business of medicine.

Rockford Orthopedic Associates

In 1967, when orthopedic surgeons Norman Hagman, MD, and Fred Nathan, MD, founded Rockford Orthopedic Associates, they took a hard look at the community’s needs and assessed how they would grow in the coming years. Their foresight paved the way to the current staff of 21 physicians working out of a state-of-the-art facility at 324 Roxbury Road, Rockford. Rockford Orthopedic provides university-level sub-specialized musculoskeletal health care for its patients in the northern Illinois region.
The ability to be competitive depends in part on size, differentiation and technology. By 1999, Rockford Orthopedic had recruited about a half-dozen specialists and recognized the importance of bringing on a management leader to work with physician leadership on business growth and strategic focus.
“I joined Rockford Orthopedic from the insurance industry,” says CEO Don Schreiner. “I had managed several HMOs for 18 years, but could see what the group visualized for its future and was very enthusiastic about helping to bring that vision to fruition. The practice had a keen awareness of market demand and what opportunities it presented for growth.”

At the time, patients were leaving the area to seek treatment from specialists in Madison, Wis., and Chicago, says Schreiner. Rockford Orthopedic set its sights on meeting the demand for specialty care and offering a one-stop, coordinated  approach to that care. Growth was necessary, in order for Rockford Orthopedic to provide full-service care; to benefit from the resulting efficiencies; and to work with insurance companies that recognized its value.
“We recruit continuously in sub-specialties and focus on what’s currently under-resourced or not available here at all,” says Schreiner. “By sub-specialties, we mean specialists who undergo the additional training to attain cutting-edge skills and to focus on specific areas of the body.”
While a significant number of orthopedic surgeons treat most bone and joint injuries, not so many focus specifically on sports-related injuries of the knee; injuries or disorders of the hand; or hip diseases and injuries. Schreiner says Rockford Orthopedic has on staff the only pediatric orthopedic surgeon within a 50-mile radius, and is currently in the process of adding a surgeon disciplined specifically in lower extremities.
Another focal area is trauma, a crowded field for a community of Rockford’s size. Two Level-One trauma centers already operate in town, but Rockford Orthopedic has found a niche for its three orthopedic trauma specialists, who treat patients from as far away as 150 miles outside of Rockford.
“No hospital in Madison or Chicago has three fellowship-trained trauma surgeons, and we’re kept very busy,” says Schreiner.
He compares Rockford Orthopedic to the Honda automotive company, whose core business is the engine. Rockford Orthopedic’s core business is its specialized physicians.
“Honda took its core business and expanded it to many different product lines like autos, lawn mowers and generators, but each is powered by the Honda engine,” says Schreiner. “We’ve enhanced our core business through ancillary diagnostic and treatment services, which enhance our expertise, facilitate the flow of coordinated treatments and overall offer the patient a higher standard of care. We provide MRIs and comprehensive therapy on site. We have a separate surgical center, carry durable medical equipment, conduct clinical research and invest in highly-trained physician assistants.”
Rockford Orthopedic’s focus on sub-specialty extends beyond orthopedic surgeons, to include physical medicine and rehabilitation physicians; rheumatology; podiatry; family practice sports medicine and the full spectrum of musculoskeletal conditions.
“All of these seemingly separate fields are adroitly coordinated to treat the whole patient and provide care for all bone and joint conditions, whether through conservative or surgical treatment,” says Schreiner.

New technology has proven to be a key factor in Rockford Orthopedic’s success, too. The practice assembled a talented staff and embraced electronic medical records (EMR) practice management software and digital x-ray more than five years ago – when many of these technologies were just gaining notice.
“Some medical facilities still don’t utilize this technology because of the cost of implementation,” says Schreiner. “By incorporating this technology early on, we’re now recognized nationally as a leader and often host visitors from throughout the United States as well as Europe, who come to see how our program is run.”
With EMR in place, Rockford Orthopedic is well-positioned to focus on another aspect of its mission: to be on the cutting edge of research, treatment, product development and medical education.
“We’ve developed proprietary outcome measurement systems that allow us to collect data based on more than 100,000 patient visits annually,” says Schreiner. “The power of collecting this data is that it will allow us to identify what is quantifiably the most effective treatment plan based on specific conditions. In the near future, we’ll be able to predict a patient’s outcome based on demographics such as age, gender, diagnosis and treatment plan and identify the most successful course of care by individual patient. This type of research is pretty much unheard of outside of major university medical research centers.”
Technology also has created a more sophisticated and savvy health care consumer, says Schreiner. Rockford Orthopedic is addressing the greater public demand for information through several channels, including patient education seminars, Facebook updates and blogging efforts.
“Our Web site is becoming a key channel for providing patient education as well,” says Schreiner. “We’re working to make our site a strategic resource for diagnosis and treatment education – we use physician video explanations to help patients better understand the treatment and healing processes.”
Internal education also is vital to success, Schreiner notes. Not only do Rockford Orthopedic physicians develop and advance their skills through continuing education, but the clinic and doctors also serve as teaching resources for both medical students and surgeons seeking to learn advanced techniques.
“We now have orthopedic surgeons from Rush University’s residency program on rotation here to gain expertise by seeing how procedures are done,” says Schreiner. “Rockford Orthopedic is consistently ranked as one of the top two facilities by the Rush residents for sub-specialty fellowship training. In addition, our surgeons travel across the country speaking and regularly publish papers in their respective sub-specialties. We also partner with the University of Illinois College of Medicine and are looking at developing a family practice sports medicine fellowship in the future.”
Bringing to life the vision for sub-specialty expertise and a coordinated full-service approach to patient care has helped the practice to become an orthopedic leader in northern Illinois. And in addition to quality care, patients enjoy other benefits from Rockford Orthopedic’s business model.
“We offer value by having all of the treatments and surgical procedures housed at one site, which helps to keep overhead down while providing coordinated care that doesn’t overlap and cost extra,” says Schreiner.

Physicians Immediate Care

Until relatively recently, patients who needed immediate care had two choices. They could call their primary physician and hope for an open appointment or go to the nearest hospital emergency room. That changed when the gap between these options was filled by Physicians Immediate Care, a system of strategically-located clinics created by CEO and director Dr. John Koehler.
“After I trained in emergency medicine in Grand Rapids, Mich., from 1983 to 1986, I came to Rockford and worked in SwedishAmerican Hospital’s emergency room,” says Koehler. “We thought it would be a good idea to provide intermediate emergency care. On April 27, 1987, we opened the first Physicians Immediate Care clinic on Morsay Drive in Rockford.”
Each location has a physician or physician’s assistant, along with reception, clinical and X-ray staff members who can assist with minor emergencies. Multiple treatment rooms, and a trauma room for more severe cases, allow the staff to attend to a variety of health issues. Each clinic can treat cuts; fractures, including casting capabilities; eye injuries; internal infections and more. The set-up is ideal for patients requiring quick care for illness or injuries not serious enough for major emergency treatment.

“It’s an in-between solution that’s not only fast but also cost-effective,” Koehler says. “Establishing and maintaining the system hasn’t been easy, and it’s had its ups and downs, especially recently. With the number of job losses in the region, patients have less insurance coverage overall. But we have loyal patients, for which we are very thankful, and we’ll continue to add clinics, as we see the need arise.”
Along with offering fast emergency assistance, Physicians Immediate Care works with various organizations to provide occupation-related services like drug testing and safety checks, as well as routine physicals required by schools or employers.
Over the past 24 years, the concept has really taken off. Clinics now serve 17 locations in the Stateline Area, the DeKalb-Sycamore community and the Chicagoland area. An 18th clinic is scheduled to open soon, but its location is still in development, says Koehler. The suburban landscape offers the perfect chance to provide greater access to health care and emergency care, he says. Given the impending changes to the nation’s health care system, clinics like Physicians Immediate Care are likely to become even more important, he adds.
“I think the future will see a lot more urgent care centers, staffed with mid-level physicians, and offer a lot more access than your typical emergency room,” says Koehler. “In this day and age, everyone wants things immediately, and since we offer more easy-access formats to get help when you need it, this is a growing field. Our clinics are open late at night, and our new East State Street location in Rockford is open until 10 p.m.”

Advanced Pain Intervention

Advanced Pain Intervention runs on yet another stand-alone clinic business model. Dr. A. P. Rosche, M.D., FIPP, opened his practice in a multi-discipline medical building at 534 Roxbury Road, Rockford, about five years ago.
“My patient base is 60 percent secondary and 30 percent tertiary referrals. About 10 percent are walk-in,” Rosche says. “From a business standpoint, I am a multi-specialty pain consultant who helps patients deal with unresolved pain issues. It’s a decision-making process involving spinal injective care in a therapeutic and diagnostic fashion.”
A Hillsboro, Ill., native, Rosche studied medicine at Southern Illinois University School of Medicine. As a board-certified anesthesiologist and pain medicine specialist, he has a fellowship in interventional pain practice. He opened Advanced Pain Intervention after researching the region’s key demographics, infrastructure and location, and sharpened his focus on blending pain management with other specialty medical practices.

“Sharing common business space, staffing, files and computer capabilities with other separate practices saves on overhead,” Rosche explains. “I really didn’t want to learn how to train a medical receptionist while training one.” Organizing the structure took some time and tweaking.
“We had to make some adjustments,” Rosche says. “I hired my own scheduling nurse, but we still share a receptionist. When I started, I didn’t know for certain if this would work out. Experience has taught me a lot, and I continue to make management decisions.”
Patient flow has not been a problem, Rosche says. He sees an average of 200 patients per month, and most fall into two age categories.
“We have the weekend warriors in their 30s, and then we have those going through the degenerative aging process,” Rosche says. “We like to think that we’re unlike any other practice in this market: small, comfortable, personal and close to home.”

NorthPointe Health and Wellness

Unlike other clinics, which focus on a specialty field, NorthPointe Health and Wellness campus in Roscoe was designed to serve a population segment. A satellite facility for the Beloit Health System (BHS), NorthPointe began with demographic research that indicated 20 percent of patients came from northern Illinois, says Tim McKevett, senior vice president.
“We wanted to better serve our Illinois patients and to develop services for what we felt was an under-served region,” McKevett says. “Our first step was to assess the patient base and to create a comprehensive vision with the BHS board. Then we conducted market research to determine not only the feasibility of developing NorthPointe, but also the target population, in order to make a prudent investment.”
BHS learned that it reached about 70,000 people in northern Illinois and that there was an estimated short-term growth potential to 80,000. Rockton, Roscoe and surrounding communities, says McKevett, are expected to be among the highest-growth areas in the state.
“We surveyed the target residents, who told us they needed quality, personal health care that was also cost-effective, convenient and of value. They also indicated they would support a fitness and wellness facility,” says McKevett. “Once we knew what they wanted, we developed a business model that included Immediate Care, on-site laboratory and imaging, specialty services, physical therapy and a comprehensive wellness center. Future plans may include ambulatory surgery and a free-standing emergency room.”
McKevett adds that demographic studies also pointed to what he termed a “sandwich” population, predominately younger residents, but with families caring for elderly members. That factor prompted BHS to develop an assisted living facility on the NorthPointe campus.
“NorthPointe Terrace offers 24 apartments, which are currently full and have a waiting list,” McKevett says.

NorthPointe’s cornerstone service is a comprehensive Immediate Care center staffed with the same board-certified emergency physicians who work in Beloit Memorial Hospital’s emergency room. It features the same diagnostic technology as the hospital ER, including CT and MRI capability, and underwrites the center’s 25 primary and specialty physicians who staff NorthPointe Clinic.
“NorthPointe is half medical with half fitness and wellness,” McKevett says. “We’re two years ahead of where we anticipated, with a membership of 4,000. We’re constantly gauging consumer satisfaction. NorthPointe rates in the top 3 percent, nationwide, in member satisfaction in medically-based fitness facilities.”
McKevett says that NorthPointe remains 20 percent ahead of predicted achievement for all three of its years in existence. Additionally, BHS and NorthPointe have established strong, positive partnerships with the Roscoe and Rockton boards, as well as a good working relationship with Hononegah High School. NorthPointe provides pool time for the Hononegah swim team and sports medicine specialists to care for the school’s athletes.
“Financially, NorthPointe could stand alone, but we have no intention of separating from Beloit Health System,” McKevett concludes. “Not only does it support our northern Illinois patients, as first conceived, but it also supports BHS’s mission to provide the finest possible care throughout the Stateline Area.”
One thing is clear: Patients are benefitting from the foresight, planning and expertise brought to the local medical marketplace and its “better mousetrap” evolving business models.  ❚