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Doctors welcome competition from hospital systems

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Dr. Peter Carrazzone, a managing partner at Vanguard Medical Group and president of the New Jersey Academy of Family Physicians.
Dr. Peter Carrazzone, a managing partner at Vanguard Medical Group and president of the New Jersey Academy of Family Physicians. - ()

Competition is about to heat up in ambulatory and outpatient care, and independent doctor networks say they’re prepared.

During the past year, large hospital systems including Hackensack Meridian Health, RWJBarnabas Health and Atlantic Health System have scheduled openings of their own primary- and specialty-care offices for the first time. Officials see it as a means of offering patients a more complete continuum of services, ranging from primary and ambulatory care to acute hospital care and aftercare.

Atlantic Health launched the Atlantic Alliance, a physician-led clinically integrated network, and plans to open an additional 10 satellite offices that will provide both primary and specialty care. RWJBarnabas also plans new outpatient care offices, while Hackensack Meridian recently acquired Edison-based JFK Health in part due to its extensive network of ambulatory care centers.

The moves represent significant competition to independent hospital networks offering multispecialty outpatient care. The three biggest such networks in the state are Summit Medical Group, Advocare and Vanguard Medical Group, which produced an estimated $1.3 billion in combined revenue last year.

“Our intent is not to compete with these groups but to allow our patients access to their physicians in a more central location with specialists and other services such as labs, pharmacy, imaging and surgery, readily available in those locations,” said Thomas Biga, president of RWJBarnabas’ hospitals division.

“[Ambulatory and outpatient care] allows you to provide care at a more affordable cost, and it’s easily accessible,” said Bob Garrett, co-CEO of Hackensack Meridian, which has over 180 outpatient care facilities in the state. “The idea is to provide quality care in ambulatory settings that are less costly. That may compete with some of the private networks. But I think it’s really important that we provide that access as health care moves more towards ambulatory care. We have a responsibility to increase that care.”

Dr. Peter Carrazzone, a managing partner at Vanguard and president of the New Jersey Academy of Family Physicians, said he welcomes the new competition.

“I’m grateful that these hospital systems are finally getting around to recognizing the importance of primary care,” he said. “Primary care is really the most important cog in the value-based-care medicine system, so I’m happy that they’re finally seeing the light.”

Carrazzone said health networks hold competitive advantages in their independence and experience.

“When hospitals own doctors, there’s an automatic drive to use that hospital, and that might not be in the best interests of the patient,” he said. “There might be a better hospital 4 miles away that might have better, more talented doctors. The pressure within the system to keep that patient in that network is not necessarily good for that patient.”

Value-based care initiatives allow independents to offer health care at lower costs, he added.

“We’ve already been doing what they’re trying to do,” he said. “We are already the lowest utilizers of ERs and hospitals, and that drives down our health care costs. Simultaneously, we’ve been able to get specialist costs under control without sacrificing quality. The most important thing we have is a culture of stewardship with our patients, meaning that we try to be very conscious of cost. I don’t think our competitors have that same outlook.”

Dr. Jeff Le Benger, CEO of Summit Health Management, the management arm of Summit Medical Group, which is the largest network of independent doctors in the state, also said he’s unworried about competition.

“I never worry about competition,” Le Benger said. “We have our game plan. We have our structure that we have to follow.”

Like Carrazzone, Le Benger said that the shift toward ambulatory care will be good for New Jersey health care.

“As far as I’m concerned, what the hospital systems are doing is elevating the bar in the state by moving toward outpatient care, because that’s where health care should be moving to, and the ambulatory sector,” he said.

“What’s most important here is that hospitals are realizing [growth] is no longer about laying down brick-and-mortar,” he continued. “It’s no longer about just hiring physicians and supplementing the bedding and ancillaries in their hospitals. Health care is about creating a network of physician that takes care of a population. That’s what’s directing the health care dollar.”

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Vince Calio

Vince Calio


Vince Calio covers health care and manufacturing for NJBIZ. You can contact him at vcalio@njbiz.com.

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