- Young podiatrists break trend by opening own practice
- Bank financing easier for physicians and medical professionals than lawyers, accountants and architects because of Medicare
billing - Partners expect to turn profit first year
Anthony LaLama and Stefano Militello, two 34-year-old podiatrists, worked several years for an established podiatry practice before deciding last fall to branch out on their own. But opening a new physician practice isn’t the easiest for young physicians, and nowadays not that many venture out on their own early in their careers.
LaLama and Militello were not discouraged. They have been accustomed to working 80-hour weeks, splitting time with surgeries in hospital operating rooms, outpatient surgery centers and seeing patients in their offices. But starting up a medical office brings with it many of the same challenges that face all small-business owners.
On Nov. 1, Militello opened Premier Foot & Ankle, a 2,000-square-foot clinic located at the St. John Medical Center professional building at 17900 23 Mile Road in Macomb Township. He had previously sold his partnership share with Warren Podiatry. LaLama, who was an associate at the practice, joined him in February.
“To break out on your own, it takes a little bit of confidence in yourself,” said Militello, who is from Shelby Township and received hisdoctorate in podiatric medicine at the Ohio College of Podiatric Medicine in Cleveland. He completed his residency at St. JohnMacomb-Oakland hospitals.
“We decided to open the practice because we wanted to be the new face of medicine,” said LaLama, who is from Sterling Heightsand received his doctorate in podiatric medicine from Kent State College of Podiatric Medicine in Cleveland. He completed his surgical training at Providence Hospital in Southfield.
“Medicine has changed a lot over the years and we want to treat patients how they should be treated,” said LaLama, adding that he and Militello try and spend more office time with their patients to go over options and answer questions.
Ewa Matuszewski, CEO of Medical Network One, a Rochester-based physician organization, said young physicians face many challenges in financing and opening their own practices. But it is less difficult than other non-health care professionals, including lawyers, architects or accountants.
“Banks will finance physicians and health care professionals, especially if they come in with more than one year of billing from payers,” Matuszewski said. “Financial institutions still view health care professional risk as less than other professionals.”
Matuszewski said a recent trend is for young employed physicians to break away from hospital employment, especially after the first year or two. She said it is still uncommon for young physicians to break away from established medical practices as partners, as LaLama and Militello did.
“Many millennials are breaking away from health systems because they want to be accountable for their own activity and patients,” she said. “Transparency is so important to younger people.”
One factor is young physician partners or associates in a practice don’t have full access to a group’s balance sheet, she said. “Sometimes you see the expenses of the practice site. You know your own patient volume, but you don’t know the bigger picture,” she said. “If you really want to buck the trend and innovate, you set up shop on your own and determine your own destiny.”
How they organized the business side
First, Militello said he and LaLama sat down with a financial planner to discuss all the financial and legal aspects of opening a new practice. They put together a cost estimate office furniture and equipment, looked into staffing needs and found an open office at the medical center.
“We were told to contact a loan director at a bank, get an accounting firm and talk with a lawyer,” Militello said. “We took out a loan from Huntington Bank, maybe used half of it, and took out a line of credit. We haven’t used it yet.”
Militello said the partners were challenged early on to generate suicientcash flow. “We expect to do better than break even first year,” he said.
Besides monthly office rent and staffing expenses, the podiatrists have medical malpractice insurance premiums and annual hospital medical staff membership dues to pay — not to mention student loans, which for doctors average more than $200,000. They use a cloud-based electronic medical record system, which is free only because there are small advertisements on the side of the screen. But the practice management system they also use for billing, which also is cloud-based and connected to the EMR, costs about $350 per month.
“We have small staff to keep our costs down,” Militello said. Besides the two podiatrists, the clinic has a physician liaison for marketing, a medical assistant and a business manager, who also does insurance and patient billing.
“We were pleasantly surprised how much we could accomplish in so short a time,” Militello said. “We opened without any hiccups.” But as for all physicians, billing insurance companies can be a headache with the number of claim rejections, resubmissions and just the general 30 to 45 day wait period to be paid. If the claim is rejected, add on another 30 to 90 days for an appeal. “We were luckyenough to hire an office manager who knows how to do that,” said LaLama.
Medicare accounts for about 50 percent of insurance claims with private insurance covering the rest. “Our clientele is mostly the older generation,” Militello said. “They have Medicare and secondary coverage.”
Setting up the practice
During the first several months, Premier had a patient volume of about five patients per day. Lately, the two podiatrists see 10 to 20 patients per day and hope to eventually reach 20 to 40 patients per day by working closely with primary care doctors and getting good reviews from other patients on social media.
“We have three rooms for patients and room for another podiatrist in two or three years once we are at capacity in our current office,” said Militello, adding that he and LaLama are hope to eventually expand to another clinic location in another five to seven years and add resident trainees. “We can expand here, but we probably would work in split shifts,” he said. “We both spend a lot of time in surgeries.”
Both doctors work four-hour shifts each week at a St. John wound care center, mostly debriding non-healing wounds. Debridement removes dead, contaminated tissue or other foreign material from a wound. The process helps to reduce the number of germs, toxins or other substances that inhibit healing. LaLama works at the St. John Providence center and Militello works at the St. John Macomb center.
“We both do surgeries, anywhere between two to 10 per week, anything below the knees,” Militello said.
Surgeries range from foot or ankle fractures, Achilles tendon repair, bunion surgery, flat foot reconstruction or ankle fractures.
LaLama specializes in foot and ankle reconstruction, diabetic limb salvage, sports medicine injuries and wound care. He is on the medical staff of St. John Providence Hospital in Southfield and St. John Macomb Oakland Hospital, Warren Campus. Militello specializes in diabetic limb salvage and reconstruction, foot and ankle trauma and wound care. He is on the medical sta of St. JohnMacomb-Oakland Hospital, Henry Ford Hospital and Beaumont Hospital Troy.
“At the hospital, we see them for infections or fractures or diabetic wounds,” Militello said. “We try to see patients right away to help out primary care doctors. Hospitals want lower length of stays, so we come in earlier. The sooner we do surgery, the sooner they get out of hospital.”
by Jay Greene
