NOMS Healthcare: Bradley Smith, CEO

by HCE Exchange on August 19, 2010

Eight years after a group of physicians embarked on what turned out to be a more-difficult-than-anticipated merger of 42 independent practitioners, NOMS Healthcare has just opened it newest facility, consisting of 110,000 square feet of space, to accommodate most of their Sandusky, Ohio offices. The multi-specialty physicians group now has 24 full and part time offices in a five county area. The group has 47 physicians, approximately half of which are primary care and half of which are specialists along with 12 mid-level providers.

Now that the infrastructure changes have been put in place to continue the expansion of the group NOMS physicians are focused on anticipating and meeting the changing needs of its community. When area employers, patients and managed care companies started asking for alternatives to hospital based outpatient services, such as imaging, urgent care and women’s health services NOMS responded by looking at how their physician group could help.

Options in Healthcare for the Community

“What we’ve found is that maintaining a lot of small offices scattered all over the region are increasingly difficult to manage,” says Bradley Smith, CEO. “It is very hard to maintain optimal levels of communications throughout the organization. We don’t feel that we are able to provide the scope of services to our patients as we would if we were to consolidate.”

The new facility will include a womens center, mens health center, internal medicine, and family practice, orthopedics, ear, nose & throat, podiatric medicine & surgery, general surgery, gastroenterology, obstetrics & gynecology.  Imaging services will be relocated to the new building with all new digital equipment. An urgent care program, an extension of existing family practice, is going to be further developed with services offered into seven days per week and will include occupational medicine as well, giving the community an alternative to the hospital emergency room, something desperately needed in rural Ohio where the nearest metropolitan area is an hour away in either direction.

A dermatology group and a local physical therapy group will also have a home in the new facility. The later group will provide physical, occupational and speech therapy and, together with NOMS, will be joint venturing a fitness and wellness center. The physical therapy department will be able to use the fitness center to rehabilitate clients, and the facility will be available on a membership basis, as well. The fitness and wellness center will include a therapy pool, cardio equipment, strength training equipment, spinning classes, yoga, pilates and an indoor/outdoor track. “By consolidating and having a lot of physicians in one location, we can create some synergy,” says Smith. “Everything we do is centered around improving our service to patients, by creating better access, higher quality, and increased value. “We believe this facility is a monument to this goal.”

The building will also house a community conference room where physicians will host lifestyle management programming such as diabetic education and cooking classes. “We’re very excited about the opportunity to consolidate offices, improve communications, and offer more advanced services to our patients,” says Smith. “What we’re trying to think about is what makes a better environment for patients, and we think we’re essentially going to take the expectations for how healthcare is delivered on an outpatient basis to a whole new level.”

Over time, one of the areas where Smith has been particularly successful is in leading NOMS physicians to a more standardized system of practice management. “It’s very easy for us when one office is short staffed. We find someone from another office, move them, and experience 90% productivity that first day,” he says. He expects consolidation will take them further along the path to efficiency, and looks forward to similar, though smaller projects in the future for NOMS healthcare providers outside of the Sandusky area.

Diversification

Perhaps what really makes NOMS unique is that they don’t just operate medical practices. They have their own IT division that sells services to other independent organizations. The group hosts the local health department’s practice management and electronic medical record software, and they host billing and payroll processing applications for other physician practices

“One of our primary goals it to diversity,” says Smith. “If we have to create something or do something to support our own company’s needs and it results in excess capacity, we might as well sell it or consult on it,” says Smith. “This helps us mitigate the risk of variations in reimbursement. If every year we go through changes with Medicare … while our other sources of revenue pale in comparison to what we generate in medical practice, at least it gives us a little buffer if we have a downturn with respect to reimbursement.”

Doing Right Things for the Right Reasons

NOMS has faced a lot of resistance from area hospitals because, “Quite frankly,” according to Smith, “We are developing a lot of services that are superior.” As well, they are producing those services at a lower cost.

In the beginning it was difficult for 42 physicians who were accustomed to their independent practices and their own way of doing things to gel, but their efforts and the time they have spent has paid off. “When they came together, they may have thought that this was going to be easy. At that time the newly formed group hoped to leverage their size to negotiate better contracts, but other than that they intended to function as autonomously as possible,” says Smith. “The reality was that it really doesn’t work that way.”

“If you want to be a functional, efficient, multi-specialty group practice, you have to act like one. You do what’s best for greater good. It has taken a while to develop that culture,” Smith says. He knew that his physician group had reached that pinnacle when the largest payer in the area proposed to cut their reimbursement rates a couple of years ago.

“We held a shareholder meeting and every single physician in our group attended. We talked about the contract issues and we talked about the risks. If we resisted this and we terminated our contract, it meant a potential loss of business in excess of  $5.5 million per year. It was about 22% of our business,” Smith says. “So it was a tough decision to make, and this is when I knew we were a group. They took a unanimous vote to terminate that contract if the management care company continued to pursue the idea of reducing our reimbursement rates.” The group was very proud of the quality service we offered and could not justify a rate reduction.

The battle between NOMS and the payer were played out in the press. The organization found that they had some very vocal patients and they were fully in support of NOMS. “They went to the paper. They went to the managed care company. They went to their employers. Our patients were incensed by the assault from the managed care company, and that really made our physicians come together.

They realized that the patients believed in them and they wanted them to remain as their healthcare provider.’ That’s when I knew we were supporting the type of culture we had set out to create.”

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