Medical practice that sued Atrium for independence opens $2.8M surgery center

It’s been almost a year since a group of North Carolina doctors sued Atrium Health to go out on their own.

Tryon Medical Partners, the independent practice set up by those doctors, has now opened eight medical clinics in the Charlotte area and today is scheduled to open a $2.8 million gastrointestinal surgery center at its Ballantyne location.

The 88 physicians formally left Atrium last Aug. 31 and launched Tryon Medical Partners on Sept. 5. Since then, the practice has been busy establishing itself in the community.

“I am pleased that we have been able to fully stand up our medical practice serving almost 100,000 patients and open eight large clinics in less than six months,” said Dale Owen, M.D., the CEO of Tryon and a cardiologist with the practice.

Dale Owen
Dale Owen, M.D. (Tryon Medical

“It’s great to be independent from a hospital system and be able to spend more quality time with our patients—and fully leverage the medical marketplace to better control their medical costs,” Owen said.

The journey to independence

The road back to independent practice started in April 2018, when the doctors sued Charlotte-based Atrium to leave the hospital system. In July, the physicians dropped their lawsuit after the health system agreed to end their employment agreements and released them from noncompete agreements, so they could open independently.

For the practice, it was a return to its roots. The original practice was founded in 1936 on Tryon Street in Charlotte (hence the name of the new practice). It eventually became the Mecklenburg Medical Group and was the largest independent multispecialty group in Mecklenburg County until it was sold 25 years ago in 1993 to Carolinas Health, the health system that later changed its name to Atrium.

There were a number of reasons for the decision to separate from the hospital system, Owen said in an interview with FierceHealthcare. “We were running our own group, but not really,” he said.

RELATED: Atrium Health agrees to part ways with Mecklenburg Medical Group after physicians sue for independence

For instance, the health system removed the nurses that were part of the practice and replaced them with medical assistants, Owen said. And like many physicians, the doctors were asked to see more patients—four per hour, which left doctors about eight minutes to actually spend with patients during office visits, he said.

Those kinds of changes emboldened Owen to take a leadership role in creating an independent group that would be patient-centered, he said.

It’s been reported that the physicians decided to leave because new compensation contracts required that they take a pay cut. But Owen said salaries were never part of the discussions with doctors who were asked to get on board to establish the independent practice. “It never came up,” he said.

Landing on its feet

Of the 104 doctors that were part of the Mecklenburg Medical Group, 88 opted to join the new Tryon practice. “To make it happen, we had to lock arms and be one,” he said. For instance, 47 doctors joined in to man the phones at the practice when it opened. ”They are owners now. They can’t sit on the sidelines,” Owen said.

A joint letter from Tryon and Atrium was sent to 115,000 patients informing them of the change. Most decided to switch to the new practice, Owen said. An advantage for Tryon is that patients follow their physicians, not hospital administrators, he said. “There literally are patients who are cheering. They are saying, ‘you’re our doctors, they are not.'”

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The doctor-owned practice is built around 63 internal medicine doctors as well as 25 specialists in dermatology, endocrinology, pulmonary, gastroenterology, cardiology, and sleep medicine. It now has eight clinics—five in Charlotte and others in Pineville, Matthews and Huntersville, North Carolina—that total 160,000 square feet and the final floor at its SouthPark location just opened. The practice has more than 91,000 patients registered and has hired 300 medical professionals to support its doctors. The new GI surgery center will be staffed by 30 doctors and medical professionals.

Owen said the surgery center is an example of the practice’s ability to treat patients in its office in a state-of-the-art facility at a lower cost than what the typical hospital would charge for the same service. “This is due in part to the fact that our patients at this clinic will not be required to pay unnecessary hospital facility fees that add no value to their quality of care,” he said.

The practice accepts major insurances and is actively working on contracts with TRICARE, which it hopes will be approved by April, and hopes to have a contract with North Carolina Medicaid by May.

The practice is physician-funded and financed, which allows for nimble decision-making, Owen said.

A trend for practices?

Owen is among a group of doctors that think independent practices are seeing a resurgence after so many practices were acquired by hospitals and healthcare systems.

As of mid-2015, 1 in 4 medical practices was hospital-owned, according to one study. Hospitals acquired 31,000 physician practices, a 50% increase, from 2012 to 2015, according to the report. And 2016 marked the first year in which physician practice ownership was no longer the majority arrangement, with physicians evenly distributed between being owners and employees: 47.1% of doctors own their own practice, with the same percentage employed and 5.9% independent contractors.

RELATED: 1 in 4 physician practices now hospital-owned

Are others thinking of jumping aboard when it comes to independence? “I think they are already in the boat. They want to see us succeed so they can jump in,” said Owen, who has gotten many calls from across the country asking about Tryon’s formation.

“I think it’s ready to go in the opposite direction. I think it has to,” he said. “It has to be patient-centric where the hospital system is about the bottom line.”

Tryon last fall joined the Association of Independent Doctors, the nation’s leading voice for the practice of independent medicine. “We know what the formula is and we’re happy to share it,” he said.

“I don’t think physicians should be afraid of this,” Owen said about the return to independence. But going independent is not without risk and challenges. For instance, real estate can be a big issue and a possible barrier. Owen said the fact that his wife is a real estate broker helped the practice locate new offices in areas where doctors previously saw patients for Mecklenburg. Tryon built one building and has renovated seven others. Financing can be another barrier. “We are 100% physician-financed,” he said.

Owen said Tryon can provide patients with care more rapidly and with better value, driving down the cost of healthcare by no longer paying a middleman. “We do it more efficiently and at less cost,” he said.

Tryon doctors are free to make referrals to both Atrium and other healthcare systems. “We are a significantly disruptive force and we know that. But this was never about injuring a hospital system,” he said. Tryon plans to grow the practice with other doctors interested in operating independently.