Retinal Consultants of Arizona is a multisurgeon retina-only practice based in Phoenix and covering the entire state of Arizona outside of Tucson. Since I joined the practice in 1994, it has grown along with the city of Phoenix. From a clinical practice with three physicians, three offices, and about 12 employees 15 years ago, the practice now includes eight physicians, more than 20 offices, and more than 120 employees.

As significant as the growth in these numbers has been for the health of the practice, perhaps more significant has been the expansion of the practice's areas of interest. In addition to our busy clinical practice, over the past decade and a half we have added a strong clinical research focus and an interest in outpatient surgery centers.

This evolution has introduced significant opportunities for the practice that we did not enjoy until relatively recently, through participation in nonmedical business models such as interaction with industry and investment in real estate. These additions have allowed the practice to grow as a profitable business while continuing to provide our patients with the best possible care. Our fervent hope is to continue to grow financially while we also continue to perform outstanding clinical, surgical, and clinical research work.

INTRODUCING OTHER BUSINESS MODELS
In general, medicine is a terrible business model. If approached properly, however, medicine can be a profitable business. As a managing partner, that is how I have tried to position our practice.

Under a fee-for-service model, clinicians are akin to very well-paid bricklayers; if they see a lot of patients they make more money, and if they see fewer patients they make less money. In a purely clinical practice, from the day you get out of training until the day you retire, you are basically doing the same job; no asset is being developed or appreciated.

Although this is not a good business model, a medical practice can add peripheral, supporting business models that are good. We have added three profitable business models peripheral to our main practice, all of which provide good passive income. Our clinical research is run as a separate business, providing dividends and appreciation of assets (as well as less tangible but equally valuable benefits to the practice, the physicians, and the patients, as discussed below). Our real estate holdings, bought at the right time and in the right manner, provide significant asset appreciation. In addition, some of our partners individually own ambulatory surgery centers (ASCs), which provide dividends and asset appreciation.

I hold the view that one can offer good patient care and good economic profitability—that a good business model is not only compatible with medicine, but is necessary. One should not shy away from the business of medicine. If you pay attention to business and do well, you can practice the way you think is best for your patients.

CLINICAL RESEARCH FOCUS
In order to maintain growth in our diversified practice, we have recruited a certain kind of physician. Rather than physicians who are interested only in clinical care, we have deliberatively recruited people who want to excel in all three areas of our practice, as surgeons, clinicians, and clinical researchers. Theoretically, everyone who comes through a good retina fellowship is trained to do clinical research, but to do it correctly, one has to have passion and be committed to the work.

There is nothing wrong with a purely clinical practice, of course, but our goal is to be known as a major clinical research center as well as a superb clinical practice. In my opinion, participation in clinical research not only enhances the reputation of the practice on a national and international scale, it also enhances patient care. Patients receive better care when they come to a center that can provide them with multiple options, including the very latest treatments. For the physicians, participating in cutting-edge research provides more intellectual stimulation and keeps us up to date on developments in our field. So our focus on clinical research enhances the practice and our patient care in several dimensions.

ASC
In our practice model, ASCs are owned individually but are intimately related to the practice. I currently operate in only one ASC, Spectra Eye Institute, a single-specialty facility founded about 6 years ago. I have had interests in other ASCs in the past but have sold my shares. All my partners participate in ASC ownership.

We see patients all over the state, and any who need surgery are referred to our Phoenix-area ASCs. Patients are much better off getting surgery in our ASC than in a hospital because we have the best equipment, the most competent and highly specialized staff, and the most efficient organization.

Obviously, good retinal surgery can be done in a hospital. Some of the finest surgeons I know operate only in hospitals. But in our situation, given our case volume, the ASC setting works better. Similarly, of course it is possible to achieve efficiencies in a multispecialty ASC. However, I believe it is easiest to achieve the kind of focus we need in a single-specialty ASC. Ophthalmology is very different from other fields. A good scrub nurse who has assisted in general surgery can also do plastic surgery, but for someone with only general surgery experience, ophthalmology— let alone retina—is foreign territory. There is a reason we are no longer eye, ear, nose, and throat physicians. The more focused and specialized we are, the better the care we deliver.

In addition to allowing us to achieve superior care, an ASC can also be profitable if run properly. This is another example of an area where profit and good patient care coincide.

EXPANDED REACH
In addition to expansion into other business models, our practice has also expanded its geographic reach. Starting with three locations in 1994, we now have more than 20, and we cover the entire state, except Tucson. Therefore, in our new recruits we must look not only for excellent surgeons and clinicians who are dedicated to clinical research, we must also search for candidates who are willing to travel.

We use leased private planes and professional pilots to take us to far outlying areas— Flagstaff, Lake Havasu, Show Low, Kingman, Yuma and other cities around the state. We also serve some American Indian reservations, in locations such as Tuba City and Sacaton. Most flights are an hour or less each way. We fly to the location, a car picks us up and takes us to the office, we see our patients, and we go back to the airport and fly back. This is much more efficient than driving these vast distances.

We own almost all of the core office buildings we use in the Phoenix metro area, but in the outlying areas we either lease buildings or have a rental arrangement with a provider there.

Several years ago we were early adopters of a NextGen (Horsham, PA) electronic medical records (EMR) system. It was not easy to integrate EMR into the practice, but now that it is up and running it works well and makes a lot of procedures more efficient. The system is installed across all of our major offices but is yet to be integrated in some of the satellites. Ultimately we will be able to take laptops to our far-flung offices, and they will become fully integrated into the EMR system.

SLOW PHYSICIAN GROWTH
The growth in our number of physicians, from three to eight over 15 years, has been disproportionately slow compared with other aspects of the practice. We started with 12 employees, and now we have more than 120. We started with three locations and now have more than 20.

The reason the growth in the number of physicians has been disproportionate is that we are very careful about whom we select. We believe that we place greater demands on our physicians than most other practices. We have an extremely busy clinical practice, so they have to be great physicians; we have a high volume of surgery in our ASC, so they have to be excellent and efficient surgeons; we have many offices in outlying areas, so they have to be willing to travel frequently; we place great value on our clinical research focus, so they have to be willing to devote time and energy to that. That is quite a list of requirements. When we find the right people and they join our group, they become valuable assets to the practice, and they stay with us.

We have never merged with competitor practices. Our practice is different from others in the region because of our emphasis on clinical research. Rather we have looked for the very best new retina people we could find and brought them in. This allows us to remain distinguished and maintain our national and international reputation.

Our practice will no doubt continue to change because change is necessary for survival. Change can come about due to science or social factors. Look at how retina practice has changed since the introduction of antiangiogenic drugs in 2005. We have adapted to the challenge of monthly intravitreal injections, but what will happen if a drug with increased durability is introduced? Will we be saddled with a bloated infrastructure that drains our profits? How will we adapt to that? If we have legislative changes—as we surely will— that reduce payments, how will we adapt to that? These things, when they happen, will happen quickly, so we must be poised to adapt as quickly as possible to new scenarios.

The best way to be ready to adapt to changes is to have a diversified practice, just as you want to have a financial portfolio diversified with bonds and stocks, large cap and small cap, domestic and international. We have tried our best to diversify so that we do not depend on our core business alone. That way, when something changes with the core business we still have other business interests to sustain us. For example, if the government imposes major cuts on reimbursement for office procedures, but fees for surgeries such as vitrectomy are increased, our interest in an ASC may offset some of the revenue losses we experience in the office.

There is a belief embedded in the medical field that business and medicine do not mix. To the contrary, I think they go hand in hand. I firmly believe you can maintain better patient care and greater profitability at the same time. In fact, I think the two are essential to each other. Business can help us provide better patient care by keeping the practice profitable, so that we can do what we believe is best for our patients.

I learned this lesson many years ago from my colleague and friend Paul Tornambe, MD, who has a great practice in San Diego. He told me, “To do good, you have to do well.” I thank Paul for teaching me that lesson, which has shaped my core philosophy and the strategic positioning of the practice.

Pravin U. Dugel, MD, is Managing Partner of Retinal Consultants of Arizona and Founding Member of the Spectra Eye Institute in Sun City, AZ. He is a Retina Today Editorial Board member. He can be reached at pdugel@gmail.com.