Colorado Springs independent medical practices become a rare breed - Colorado Springs Gazette

Dr. Vinh Chung, co-founder and co-owner of Vanguard Skin Specialists, believes doctors and lions have something in common — both would rather have freedom than security.

"If you are a lion on the African savanna, you are powerful and king of the jungle," Chung said. "You will live 23 or 24 years and most die from lack of food or water or infection. The lion in a zoo will live longer, but the lion wants to live in the wild. Physicians didn't get into medicine to be a lion in the zoo. Security is alluring, but we believe some things are more important — purpose and autonomy."

Vanguard retains its autonomy as one of the largest independent medical practices in the Colorado Springs area, growing from a small office subleased from another dermatologist to nine southern Colorado locations with 10 doctors and 110 employees. The practice has turned down purchase offers from a variety of potential buyers as it continues to grow, planning a 10th office and expanding into related medical specialties.

But practices such as Vanguard have become a rarity. There are very few independent practices left in Colorado Springs, said Debbie Chandler, CEO of Matthews-Vu Medical Group, the largest independent medical practice in the Colorado Springs area.

She cited the acquisition of Dublin Primary Care, one of the largest remaining independent practices, by UCHealth this year and last year's acquisition of the assets of Colorado Springs Urological Associates, the area's largest urology practice, by private equity-backed Solaris Health Holdings as the latest examples of consolidation among medical practices.

Independent practices once dominated the local medical industry, but in the past 10 years the two major local hospital systems — Centura Health and UCHealth — health insurance giant UnitedHealth and national practices financed by private equity funds have been buying up both primary care and specialty practices; such acquisitions help the hospital systems lower overhead costs, get more financial clout in negotiating contracts with Medicare and private insurance providers, and gain more resources for technology and other costly equipment.

Mike Ware, CEO of the El Paso County Medical Society, estimates about 70% of the more than 1,000 practicing physicians in the county are working as employees of hospitals, healthy care company UnitedHealth or a private equity-funded group.

UCHealth now operates 15 primary care and more than 30 medical specialty clinics in the Colorado Springs area, acquiring Dublin Primary Care in April and opening a urology clinic this year. Centura operates eight primary care clinics, many in locations where it also offers imaging, physical therapy and other medical services. Health care company Optum acquired Colorado Springs Health Partners and Mountain View from kidney care giant DaVita in 2019.

Acquisitions of physician practices nationwide accelerated during the COVID-19 pandemic with nearly 74% of all physicians working for hospitals or large corporate-owned practices, according to a study by the Physicians Advocacy Institute, a Chicago-based group that pushes for "fair and transparent" payment policies by government agencies and private medical plans. Much of that growth came from acquisitions by corporate practices backed by private equity investors.

Chung said many physicians sell their practices or go to work for hospital- or corporate-owned practices out of fear of flat to declining reimbursement rates from Medicare and Medicaid, and a need for economic security. He said the growing administrative burdens, legal compliance, technology and other challenges make it difficult for sole practitioners to operate efficiently.

Vanguard CEO Leisle Chung, who is Vinh Chung's wife. noted that Medicare reimbursement rates for physicians haven't changed since 2001, which means that inflation has eroded about 20% of the income practices receive from the federal health care program.

"Our practice is at a size where we can handle the administrative burdens of a medical practices, but it would be hard to start a solo practice today with the requirements for billing, prior authorization (for many procedures) and using electric health records," she said. "Our size also allows us to be included in networks (of doctors and hospitals) that smaller practices are excluded from. I have a lot of respect for primary care practices that have remained independent. The (profit) margins are so thin, that is what is driving a lot of the consolidation."

Here is a look at how Vanguard, Matthews-Vu and two other major Colorado Springs medical practices — AgeWell Medical Associates and Colorado Springs Orthopaedic Group — have remained independent by finding a niche or strategy that has allowed them to survive and thrive:

Matthews-Vu Medical Group

The practice, which specializes in serving patients regardless of income, spent $1.3 million last year to buy a former 10-screen theater to convert into its southeast Colorado Springs hub. Matthews-Vu plans to spend $2.2 million remodeling the 27-year-old theater, which closed early in the pandemic and never reopened, into clinics for pediatrics, urgent care, internal medicine and family practice that will open next month. The new location near Academy and Fountain boulevards will replace a nearby office at 1050 S. Academy Blvd. and has more than twice as much space as the current location.

The practice, which has 65 medical providers and 225 employees at four locations, also is looking for a fifth location in western or southwestern Colorado Springs that would open late next year, Chandler said. Matthews-Vu, which opened its own lab early in the pandemic, also plans to open a pharmacy next month at its Woodmen Road headquarters for both prescription pickup and delivery.

Matthews-Vu handed over management of its 15-person call center to Reliant, a Florida company , amid a struggle to hire and retaining employees for the center. The center will have a "hotline" to all four of the practice's offices; the practice also has installed a new telephone system to streamline patient support so patient calls don't get transferred excessively, Chandler said.

Dr. Richard Vu and wife Dr. Shabnum Matthews-Vu came to Colorado Springs in 2004 and started a practice in an office they shared with another doctor near the former Penrose Community Hospital. The practice grew steadily, moving to an office near Woodmen Road and Powers Boulevard in 2007 and later adding offices in Rockrimmon, downtown and southeast Colorado Springs. The practice specializes in treating patients on government plans such as Medicare for senior citizens, Medicaid for low-income and Tricare for active and former military and their families.

Chandler said the practice has been approached almost weekly about selling, but it plans to remain independent.

Vanguard Skin Specialists

The dermatology practice's locations include three in Colorado Springs as well as offices in Canon City, Castle Rock, Parker, Pueblo and Woodland Park and a satellite clinic in La Junta. Leisle Chung said Vanguard is looking to open a fourth Colorado Springs location as its patient rolls continue to expand.

"Our patient base has grown because Vinh gives his cell number to patients, and he puts himself on call to take after-hours calls from patients," Leisle Chung said. "He also made the commitment to referring providers to get the patients they referred an appointment quickly. Our focus is on providing great patient care, so if we get more patients, we add another provider to make sure we can provide great care to them. If a patient is driving several hours to see us, we open locations closer to them."

Vanguard also has expanded into women's health care, offering functional and aesthetic gynecology and plastic surgery services, and is studying whether to add allergy, rheumatology and ear, nose and throat care as additional medical services, Vinh Chung said. However, he said he doesn't want the practice to grow just to generate more revenue; any expansion must further Vanguard's mission and vision of making a positive impact on its patients, the community and the world.

That mission is carried out in several ways, the couple says, from treating patients like family to expanding into underserved areas to battling the horror of sex trafficking in Cambodia. All the retail profits from Clara, Vanguard's skin care line, go to support charities that help women and children both locally and around the world. Some of the profits also go to provide clean water in Rwanda and to support a clinic in Haiti.

AgeWell Medical Associates

The practice is among a small number nationwide that serve only patients 60 years or older, primarily those on Medicare. That niche typically requires doctors to spend much more time with patients than is typical for younger persons.

AgeWell owner Dr. Jeffrey Kulp said he and his staff of a physician assistant and four nurse practitioners spend at least 30 minutes with every patient. The practice has grown so much in recent years that he and Lori Trivelli, the administrator, hope to add a second location sometime in the next two years to supplement its only office near the historic Union Printers Home in central Colorado Springs.

"We want to allow our providers enough time to talk with, examine and recommend treatment, so our appointments are long by existing standards'" Kulp said. "We spend 60 to 90 minutes with new patients on an initial visit and 75 minutes for an annual wellness exam. A lot of primary care practices expect their doctors to see patients in 15 minutes. It is difficult to address multiple chronic conditions and make recommendations for diagnostic tests and treatment in that amount of time. In our practice, we take as much time as is required."

AgeWell is reimbursed by Medicare under a special program that shares savings the practice generates by  catching problems earlier than might otherwise happen with shorter visits.

Kulp started his medical career in Philadelphia and came to Colorado Springs in 1990 as a contract physician with the Memorial Hospital system, operating Colorado Springs Senior Medicine adjacent to the city-owned senior center until the practice separated from Memorial in 1997; it became AgeWell in 2007. The practice built its office at 2350 International Circle in 2012 and had been part of a Centura Health contracting group with insurance plans until 2020, when it joined Aledade, a Maryland-based contracting group for independent practices.

AgeWell is reimbursed by Medicare under a special program that shares savings the practice generates through reducing medical costs for its patients before .

"As an independent, we can make changes on the fly in real time. We don't have to ask for someone's permission, and our staff and patients appreciate that," Trivelli said. "There is a lot of opportunity in the niche that we are in."

Colorado Springs Orthopaedic Group

The practice has become one of the largest medical specialty groups in the Colorado Springs area by becoming a one-stop shop for patients who need orthopedic care — operating its own imaging facilities, an operating room for outpatient surgery, physical therapy and its most recent expansion – a walk-in urgent care clinic for bone, muscle and joint injuries.

Colorado Springs Orthopaedic, owned by 16 of its 18 physicians, was started in 1994 with the merger of four orthopedic practices and has grown to two locations and about 200 employees. CEO John Braun said the practice probably will open a third location as Colorado Springs grows, but has no interest in expanding beyond the city. He said the group remains committed to remaining independent .

Doing so, he said, "allows us the freedom and flexibility that being employed (by a hospital) or private equity doesn't have. We can treat patients with the best possible treatment because we are not beholden to anyone by ourselves," Braun said. "We are able to adapt more quickly and can provide services the community needs because we don't have the bureaucracy" of a hospital system or large corporate practice.

Colorado Springs Orthopaedic is a member of The OrthoForum, a group of 4,000 independent orthopedic practices that that offers members chances to buy supplies at a lower cost and opportunities to share best practices and advocacy