Integrated Dermatology Experience?

[ballerdoc]

Hello All,

I am a resident and I am considering job offers, including working with Integrated Dermatology. Does anybody have any experience working for Integrated Dermatology? I know they have models where the physician can maintain part ownership or at least make management decisions. I was curious how great (or not so great) this type of opportunity is.

Thank you!

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[Skindoc83]

Stay away. They are structured in such a manner that you will never make bonus and you sacrifice most of your autonomy. If you’re looking to retire and want to offload your practice while making a little profit or just breaking even, these VC groups can be appealing. But for any physician starting out or in the middle of their career there’s no benefit other than being able to work in a competitive area. Their goal is to make enough profit that a bigger fish will come and buy them. This means they care little about patient care or what is most beneficial for you. They make the claim that through economy of scale they can buy supplies at much lower rates or negotiate much high insurance rates. But guess what? Most reimbursement rates are tied to Medicare and most markets have enough private practitioners that if you won’t accept the rate that a plan offers they will just drop you because there are dozens of other providers who will. And saving 2 dollars a pack for suture isn’t worth selling our field down the river or selling yourself short. These groups capitalize on physicians fears of running a practice. Like it’s the most difficult thing in the world. Giving up 30-50% of your collections so a company can supply an office manager and billers is a fools bargain. You’re a physician and can do better

 

[username456789]

I have no personal experience with Integrated, but I absolutely abhor everything they and similar groups stand for. And so should most everyone.

It’s a real shame what’s happening to our field (and medicine in general).

 

[dermie1985]

I'd echo whatever everyone says above. I'd try and avoid these groups if possible.

 

[ballerdoc]

Thank you all for your helpful input!

 

[Themmk]

Stay away. They are structured in such a manner tha t you will never make bonus and you sacrifice most of your autonomy. If you’re looking to retire and want to offload your practice while making a little profit or just breaking even, these VC groups can be appealing. But for any physician starting out or in the middle of their career there’s no benefit other than being able to work in a competitive area. Their goal is to make enough profit that a bigger fish will come and buy them. This means they care little about patient care or what is most beneficial for you. They make the claim that through economy of scale they can buy supplies at much lower rates or negotiate much high insurance rates. But guess what? Most reimbursement rates are tied to Medicare and most markets have enough private practitioners that if you won’t accept the rate that a plan offers they will just drop you because there are dozens of other providers who will. And saving 2 dollars a pack for suture isn’t worth selling our field down the river or selling yourself short. These groups capitalize on physicians fears of running a practice. Like it’s the most difficult thing in the world. Giving up 30-50% of your collections so a company can supply an office manager and billers is a fools bargain. You’re a physician and can do better

Just to bring some facts to the discussion - Intergraded dermatology is not backed by VC. You can read this AAD publication from earlier this year titled "PULLING BACK the CURTAIN on PRIVATE EQUITY." (A simple google search should bring it up). As outlined in this article, there are pros and cons of working for a private equity group. Nowadays it's hard to not cross paths with one of them when you are looking for a job. Do your own research about that company and ask plenty of questions. You shouldn't reject an opportunity solely based on other's opinions.

 

[doctalaughs]

Private equity vs backed by VC makes no difference. There are 3 differences between working as an straight employee (university, kaiser, VA etc) and working for one of these private equity groups-

1. Both situations make money off your billings in exchange for offloading some admin work (hiring, staffing, office managmenet etc). However, as an employee they dont pretend you are “a partner” whereas these groups do all sorts of things to trick you into thinking you’re more than an employee.

2. Most employed dermatologists are fairly equal whereas private equity is more of a pyramid scheme (few senior partners sell for millions whereas juniors get crumbs).

3. Ethics are more questionable for private equity (all the perverse incentives for normal private practice minus normal physician autonomy).

 

[Themmk]

Private equity vs backed by VC makes no difference. There are 3 differences between working as an straight employee (university, kaiser, VA etc) and working for one of these private equity groups-

1. Both situations make money off your billings in exchange for offloading some admin work (hiring, staffing, office managmenet etc). However, as an employee they dont pretend you are “a partner” whereas these groups do all sorts of things to trick you into thinking you’re more than an employee.

2. Most employed dermatologists are fairly equal whereas private equity is more of a pyramid scheme (few senior partners sell for millions whereas juniors get crumbs).

3. Ethics are more questionable for private equity (all the perverse incentives for normal private practice minus normal physician autonomy).

The main criticisms outlined by Skindoc83 regarding turning over for profits in a set number of years is more relevant for VC-backed PE companies. So yes, I think there is a difference between VC-backed and non-VC-backed PE firms. I know people who have received offers from PE firm such as Intergraded and from a small practice owned by a doctor. The offers contain very similar percentages of collection for compensation, and the PE firm offered an additional small % of practice profit. Whether you think that's "tricking you," you are still getting more money. I'm not personally advocating to work for a PE firm, my point is that this is not a black-and-white issue and like everything else, there are pros and cons.

 

[doctalaughs]

The main criticisms outlined by Skindoc83 regarding turning over for profits in a set number of years is more relevant for VC-backed PE companies. So yes, I think there is a difference between VC-backed and non-VC-backed PE firms. I know people who have received offers from PE firm such as Intergraded and from a small practice owned by a doctor. The offers contain very similar percentages of collection for compensation, and the PE firm offered an additional small % of practice profit. Whether you think that's "tricking you," you are still getting more money. I'm not personally advocating to work for a PE firm, my point is that this is not a black-and-white issue and like everything else, there are pros and cons.

If you are a controlling partner nearing retirement I agree there are definitely pros (big cash windfall).

If you are a young dermatologist, non-partner or “non-controlling” partner I disagree with you - there are only CONS. Dermatology is lucky in being 15 years behind other specialties in the PE/VC takeover but you can easily look at other fields like anesthesiology EM and pathology to see what this leads to. There’s nothing “pro” about it down the line.

 

[username456789]

If you are a controlling partner nearing retirement I agree there are definitely pros (big cash windfall).

If you are a young dermatologist, non-partner or “non-controlling” partner I disagree with you - there are only CONS. Dermatology is lucky in being 15 years behind other specialties in the PE/VC takeover but you can easily look at other fields like anesthesiology EM and pathology to see what this leads to. There’s nothing “pro” about it down the line.

Yes, unfortunately people continue to sell out our collective future with an “I got mine” mentality.

 

[reno911]

Private equity vs backed by VC makes no difference. There are 3 differences between working as an straight employee (university, kaiser, VA etc) and working for one of these private equity groups-

1. Both situations make money off your billings in exchange for offloading some admin work (hiring, staffing, office managmenet etc). However, as an employee they dont pretend you are “a partner” whereas these groups do all sorts of things to trick you into thinking you’re more than an employee.

2. Most employed dermatologists are fairly equal whereas private equity is more of a pyramid scheme (few senior partners sell for millions whereas juniors get crumbs).

3. Ethics are more questionable for private equity (all the perverse incentives for normal private practice minus normal physician autonomy).

I don't think that 1 & 2 are actually problems.

1. The pretense should be easy for anyone to see through with even the minimum due diligence. They're generally not straight up lying and there is a written contract to refer to. And even if you have that particular misperception and it bothers you, it's not like you would have found the straight employee job any better.

2. At the end of the day what matters is how much they pay you and how much work you do. If you're doing the same work and getting the same pay, it shouldn't really matter to you what is happen to the money you aren't getting -- whether it's being squandered through bureaucratic inefficiency, supporting less productive docs, or making some shareholder rich. In all cases, you're not the one getting it.

On the other hand, I think 3 is a big problem.

 

[doctalaughs]

I don't think that 1 & 2 are actually problems.

1. The pretense should be easy for anyone to see through with even the minimum due diligence. They're generally not straight up lying and there is a written contract to refer to. And even if you have that particular misperception and it bothers you, it's not like you would have found the straight employee job any better.

2. At the end of the day what matters is how much they pay you and how much work you do. If you're doing the same work and getting the same pay, it shouldn't really matter to you what is happen to the money you aren't getting -- whether it's being squandered through bureaucratic inefficiency, supporting less productive docs, or making some shareholder rich. In all cases, you're not the one getting it.

On the other hand, I think 3 is a big problem.

I suppose I agree with you on #1 theoretically. It should be quite obvious, and they aren’t flat out “lying” for those that see the situation for what it is.

For #2 the problem is somewhat indirect. If you, the doctor, is getting paid the same (or more they claim) AND shareholders are getting rich, then where is that extra money coming from? Sure, you can say the “evil” insurance companies — but that leads to higher premiums (and deductibles) for patients who are already getting hosed. Its similar to the arguments phama companies make for astronomical drug prices. Oh don’t worry - patients are fine because we “give back” with coupons and “assistance” programs out of the good in our hearts. Meanwhile premiums keep rising for patients - it cant have anything to do with that 55k/ year biologic drug.

I suppose its just one more middleman in an ever-bloated healthcare system.... but point #2 does matter.

#3 speaks for itself as you said.

 

[reno911]

I suppose I agree with you on #1 theoretically. It should be quite obvious, and they aren’t flat out “lying” for those that see the situation for what it is.

For #2 the problem is somewhat indirect. If you, the doctor, is getting paid the same (or more they claim) AND shareholders are getting rich, then where is that extra money coming from? Sure, you can say the “evil” insurance companies — but that leads to higher premiums (and deductibles) for patients who are already getting hosed. Its similar to the arguments phama companies make for astronomical drug prices. Oh don’t worry - patients are fine because we “give back” with coupons and “assistance” programs out of the good in our hearts. Meanwhile premiums keep rising for patients - it cant have anything to do with that 55k/ year biologic drug.

I suppose its just one more middleman in an ever-bloated healthcare system.... but point #2 does matter.

#3 speaks for itself as you said.

I thought you were claiming #2 was a problem for the doc with respect to compensation and working conditions. I can see how it is problematic for the patients and overall health care system, but that's a separate issue.

 

[MOHS_01]

I avoided this thread because I thought it was about the combined IM-derm residencies

I will just add to the pile and say that, in general, it matters not one iota VC vs PE vs “mega group” funding structure, the goal is the same: increase size to increase multiple. Free cash flow must be directed toward the managing entity for the multiple, and where do you think that comes from? It’s not the MA’s production... it’s not from the $2/box bulk suture savings... nor the $.38 per pack savings on gauze. There is but one line item with meat on the bone - and that is you, the clinician. The increased reimbursement they may enjoy is fleeting at best, and when this pricing power disappears, so too will any attractiveness. I see few redeeming qualities and much harm to the field in general. In short, never trust a suit.

Caveat emptor.

 

[tigers96]

I agree with most of what is being said and in general like to avoid PE/VC. The end game is a set ROI, package multiple practices and then hopefully resale. If not in the "package and resell" then they are typically only concerned about bottom line ROI than patient care or services that you offer. You may enjoy your current management with regards to autonomy and practice, but than can change very quickly if sold. You have no control of that. If you have a service you like to offer patients, but not producing enough it will be on the chopping block.

On the flip side, while I am alarmed at the rise of VC in dermatology, I think the tide will turn. I am not sure if many of these groups have been as successful as they thought they would be and a few have already closed down. And it sucks, because this tends to happen fairly quickly. When you propose to go for subsequent funding and the primary investors don't like the progress, they will cut funding and it's over. You walk into a meeting and may walk out a few hours later with no funding and the need to close down in days/weeks. There isn't a "phase out" plan when it comes to VC. Then a fire sale of all assets

 

[asmallchild]

I agree with most of what is being said and in general like to avoid PE/VC. The end game is a set ROI, package multiple practices and then hopefully resale. If not in the "package and resell" then they are typically only concerned about bottom line ROI than patient care or services that you offer. You may enjoy your current management with regards to autonomy and practice, but than can change very quickly if sold. You have no control of that. If you have a service you like to offer patients, but not producing enough it will be on the chopping block.

On the flip side, while I am alarmed at the rise of VC in dermatology, I think the tide will turn. I am not sure if many of these groups have been as successful as they thought they would be and a few have already closed down. And it sucks, because this tends to happen fairly quickly. When you propose to go for subsequent funding and the primary investors don't like the progress, they will cut funding and it's over. You walk into a meeting and may walk out a few hours later with no funding and the need to close down in days/weeks. There isn't a "phase out" plan when it comes to VC. Then a fire sale of all assets

I'm sure the CMS proposed 2019 fee schedule isn't going to help matters any.

 

[tigers96]

Yes, I am sure analysts expected to keep E/M bundled payments where they are if not grow slightly over time when they were pricing in multiples when making the offers to buy practices. The problem is.... medical reimbursement doesn't work like wall street

 

[dermathalon]

Whether you work in a managed care setup like a Kaiser or a large integrated group, you have already made the decision that partnership is not right for you. Otherwise, you wouldn't consider these jobs seriously. I think the problem is that you have to take advice from people that are like you. Most of the vocal derms on this topic are private practitioners who own their practice or are young and want a piece of the ownership. There are some academicians mixed in there as well who look a the ethics of things (but they curiously and conveniently leave out the other established systems that are also utilizing midlevels and engaging in algorithmic care). Also, the notion that everyone gets reimbursed at the same rate and that they will just send the patients elsewhere is just not true. When you are providing care for a large group of people, you can't just drop a large group and move all the patients. Its a logistical nightmare. To think otherwise is naive. And yes, you do get leverage on negotiations. To think you don't is just silly. Universities and large health care setups get much more than an individual private practitioner and can command certain contracts that a private practitioner cannot. I'm not a fan of VC backed firms, especially when ethics comes into play, but the managed health care institutions (such as Kaiser) are not such great deals either depending on what you want out of your career. For others, they are amazing deals. Take a good look at yourself and figure out where and what kind of setting you want to work in and then take advice from the people that pursued similar settings. You'll hear a lot of pros and cons but the X factor is which pros and cons actually matter to you rather than just looking generically at pros and cons. Not everyone wants to run a private practice and be an owner.

 

[ballerdoc]

Thank you all for providing highly enlightening advice. It really helps residents to hear advice from people other than those who are making the job offers.