Monterey (Calif.) Spine and Joint became part of Montage Health, and 13 of its 14 surgeons joined the health system. Spine surgeon Sohrab Gollogly, MD, is remaining independent.
Dr. Gollogly began that practice more than 22 years ago with his colleagues, he told Becker’s. At its peak it had 180 total employees and was the region’s largest orthopedic practice.
However a combination of events over time put pressure on costs.
“In my entire 20 year practice, there was nothing but relentless downward pressure on physician based reimbursement via CPT code, insurance companies got closer and closer to Medicare, Medicare continued to either stay stable or reduce the rates, and then there were inflationary pressures on costs,” he said. “The cost of employees went up. The cost of paper for the copying machine went up. And it was just at a point where the overhead kept creeping up further and further.”
The COVID-19 pandemic doubled the cost of real estate prices, leading to plans for the health system acquisition and Dr. Gollogly’s decision to continue practicing independently.
“The writing was on the wall,” he said. “We spent about a year negotiating with the hospital, and it was fair and reasonable. But my big specialty interest is endoscopic spine surgery … So for me to go and join [a hospital] I would give up a lot of freedom to the things that are important to me. My goal for the next 15 years of my career, which is going to take me through the end of my career, is to focus exclusively on endoscopic spine surgery.”
Taking private equity and/or joining an orthopedic management service organization was also a consideration, but Dr. Gollogly said federal loans from the COVID-19 pandemic helped keep the practice afloat when private equity interest rates were lower.
While Dr. Gollogly’s hospital affiliations haven’t changed, he’s now working as an out-of-network practice. Looking at the future, he said he was concerned about how the practice acquisition would affect how physicians interact with their community.
“That’s a practice that we built with a lot of blood, sweat and tears,” he said. “At the end of the day, there were just simply too many structural problems that there was no way for us to overcome … We provided a really good service with a community choice for musculoskeletal care, and I know that the access to the physicians for the patients in the community will change.”
