The Physician-Owned Practice That Private Equity Can't Buy With Dr. Bradley Block

If you join another practice, they might call you partner, but ultimately you're not really a partner. You're not an equal share partner. We are partners. And I can't take credit for this model because this was started long before... I stepped in it when I joined this. I was very lucky that this practice existed because I joined it right out of residency and now I'm looking to give back. But I can't take credit for the visionary model that they had in creating this clear path to full equity partnership. And they sacrificed a lot, because when they retired, the founding partners retired, they left with nothing. I mean, they did extremely well when they were here, but there was no buyout. There was no buyout. They just retired and the next day they were gone.

Thanks so much for having me. I've seen you in this space for a long time. And it's really an honor to be invited on your show, really, to be amongst the giants that you've interviewed. Thank you so much.

So, when I first joined practice, I was single. My office is on Long Island, and so I would drive from Manhattan to Long Island, because as one of my friends from residency liked to say, the suburbs is where youth goes to die. So, I was young and single, so I wanted to live in Manhattan, but it was a heck of a commute. And after going from residency to being an attending and having no time whatsoever in residency, to have all this time I was burning in the car commuting, I was like, oh, my God, I need to be productive with this time. So, I started consuming podcasts. And then I started looking for podcasts for the questions that I had. And the question that I had that really came up most often was how can I be faster with patients. Because I would see my partners being able to be efficient seeing four, maybe even five patients an hour, and still go home somewhat on time. And yet, I would struggle with three patients an hour. I had no idea how they were able to get through their day as more efficiently than me. So, I looked for communication podcasts and there was none for physicians. The communication podcasts were geared towards sales, executives, dating. Dating was the biggest one. And so, I created my own podcast because I wanted to take these communications experts, because they were out there, and focus their expertise with my lens on the physician-patient interaction. In order to figure out a way not to just do it quickly, but in such a way that the patient experience wasn't sacrificed and maybe even augmented. So, now I could come up with systems for optimizing the patient interaction, so that I was respecting the time of the person in the waiting room, of the person who was trying to get appointments, and the patient in front of me. So, there are experts out there that could teach that, or at least I hoped there were, but I didn't have a platform. I didn't have a venue, a way to email a stranger and be like, "Hey, can I have a conversation with you?" So, I created the podcast. It was really just for me.

Well, I think as with most things, we're 10 years behind. Personal computers, people had them in their houses in the mid-80s. And we didn't start having them in our exam rooms until 15, 20 years ago. We still use fax machines and beepers. There are these professional influencers out there. And it's been a space that's been established for a long time. And we're just kind of getting into it now, because I think people were so afraid of backlash from putting themselves out there. Everything always has to be perfect when you're in medicine. And so, if you're going to misspeak, if you're going to say something that maybe ends up being misconstrued or maybe you weren't as sensitive to a subgroup out there as you could've been, and then you get raked over the coals for it. So, I think people were afraid to put themselves out there. Because so many of us are employed, not me, but so many of us are, you don't have to worry about them. In fact, when I started the podcast, I had to run it by my practice. And so, they were like, "Yes, send us the episodes," because they wanted to make sure I'm not seeing things that are off the wall. And then after a couple of episodes, I realized they're not listening to this. So, then I just stopped and I kept going, but you're afraid of getting called into HR. But now we're realizing, because so many people are out there putting out good information, that it just kind of snowballed from there. But we were late to the game. There's also the pushback against misinformation. In COVID, we saw how dangerous misinformation can be. And there are a lot of great physicians out there now. And thank God for them, because that was something that never interested me. And I feel like sometimes people feel guilty that they're not doing it. And to them I would say for the people who enjoy it, do it. If you don't enjoy it, don't feel bad about it. Just figure out what lights you up and do more of that. Part of it is we're late to the game and we're just coming to it now. And the other is the pushback against all the misinformation out there. It makes us so mad. And that is a powerful motivator-

... to go out and put out good information. And there are some extraordinarily talented physicians who are out there, putting out their information. And sometimes some of them will make a misstep and then they get raked over the coal. So, there's risk involved.

Decorum.

So, it's inherent in our model. So, our model is that when you join, let's say you finish your residency and fellowship, although I don't want to imply that you have to do a fellowship. I haven't done a fellowship. Most of the otolaryngologists haven't done a fellowship. We're going to give you a contract and it's going to make very clear how you can become partner. And if you do those things, then you become a partner who has just as much equity as me, as one of the founding partners of whom there are actually very few at this point. There's no buy-in, there's no buyout. And at this point, somewhere around 170, it's always changing because we might have just promoted someone to partner and we might've had someone retire. And so, when you have 170 partners, it doesn't work the same when private equity wants to buy your practice. Because if you had five at the top with 50 physicians, then those five stand to make a chunk of change. And they're probably going to exit in a couple of years. But when you are mostly partners, which is what... We have more partners than non-partners because that's our model. Our model is to make you a partner and we have very little attrition. Getting 170 physicians to agree-

... on a good deal like that, that's going to be tough because you're going to have some physicians who just became partner and they're not even 40 years old yet. And you have another physician who's a partner and she's 70. Those two people are going to want very different things from a deal. And also, we have partners that make twice as much as other partners because they really hustle, whereas someone else that's like, "You know what? I don't want to hustle. I want to enjoy my life." And so, a good deal looks very different to a... So, then getting everyone to agree on it is part of the problem. The other part of the problem is that why would we sell. Why would we possibly sell? What could they possibly do for us that we don't already do for ourselves? The only thing that I've seen out there from private equity is that they roll practice up and turn them into us, right?

What, are they going to make us more efficient? No, no, no. Because of economies of scale, we are efficient. We have an efficient leadership system. We are able to negotiate good contracts with insurance companies because of our size. We benefit with purchasing because of our size, with hiring, all of that. If you want to join our practice, you can just put your head down and see patients and go home and that's fine. But we also have a number of committees that advise the board. You can be on the board. Actually, we're self-insured, so if you want to get involved in that aspect. You're really interested in the EMR, we're actually going to be going to Epic soon, you can get involved in that. So, you can get involved in part of the practice. I was recently elected to the board of the practice. So, you can get as involved as you want or not at all, but you'll still own the same amount. And so, what could they possibly do for us that we don't already do ourselves? And the decisions that we make as a board, because we all practice full time. So, I'm not going to make some decision that is going to make my life harder just to make a couple of extra bucks. In fact, it might make sense to lose a little money if it's going to make my life much better. And so, the decisions aren't just financial. And so, when you have someone who's practicing full time, making those decisions, it's going to be very different than someone who's running a private equity run company, who is trying to squeeze blood from a stone.

I think it's the clear path to full equity partnership. I think where else... If you join another practice, they might call you partner.

Yeah. So, there's a way that they do it, where they call you partner without actually giving you equity. Or they give you some minority share, but the person who... And I can understand that. You founded a practice from nothing. You took out loans. You visited a bunch of doctor's offices.

You took risk.

Yeah. You did that. You're not going to want to give that up so easily. And so, you take on a partner, you give them a 5%, a 10% share. But ultimately, you're not really a partner. You're not an equal share partner. We are partners. And I can't take credit for this model because this was started long before... I stepped in it when I joined this. I was very lucky that this practice existed, because I joined it right out of residency. And now I'm looking to give back, but I can't take credit for the visionary model that they had in creating this clear path to full equity partnership. And they sacrificed a lot, because when they retired, the founding partners retired, they left with nothing. I mean, they did extremely well when they were here, but there was no buyout. There was no buyout. They just retired and the next day they were gone.

But the legacy that they've left in creating this practice, and the way I see it is I have a responsibility to help manage this practice in such a way that it is available for future graduating residents in the same way that it was there for me.

We have a great place to practice. And it's a big responsibility, not just for the people that are practicing now, but for the future of otolaryngologists and private practice in general.

Would we need to find that type of synergy in cross referrals in order to make it work? I don't think it's critical. I really don't, because I think that we have a model on how to run things efficiently in such a way that is sustainable. And certainly, there would be nuances to different practices. Like dermatology, for instance, they do some cosmetic. And we have facial plastic surgeons in our practice who do cosmetics. We have some, but they have different equipment. They've got different overhead. They might require different support staff. A lot of lasers, dermatology. People say doctors are bad at business, and I say for two reasons. One, we're not interested. And two, we haven't been focused on it. So, this is all attainable knowledge, that if we just decide to do it, we can do it. I think we've got this model that is appealing if you want to stay not employed, if you want to stay in practice and not work for a health system and not work for private equity.

It's not really a struggle, actually. That's not really a challenge for us. We're able to handle the volume. Now, you have a handful of doctors that have a particularly long wait time, because they're super specialized and they've got people coming to see them from far and wide. But we've got a large share of general otolaryngologists, sometimes called comprehensive otolaryngologists. I don't really love the term comprehensive otolaryngologist. We're general otolaryngologist. We're generalists. We're not specialists, therefore we're generalists. I don't know what comprehensive means.

It is. It is. But let's be honest, we're general. And so, if you see one of the generalists, if it's a very niche problem, we might have to send you to one of our super specialists. For instance, if you have a cholesteatoma, I don't drill out mastoids, so I'm going to be sending you to one of our neurotologists. But I'm going to be working you up first and teeing you up so that everything's done by the time you get to them. I might even be explaining how the surgery works and some of the risks involved. I'll go over your imaging. But we've got enough physicians that it's really not a wait time. In terms of getting you an audiology visit, oftentimes we can do same day audiology, so if you come in and you've got an ear complaint. It's actually something that I'm working on now in the practice in order to make sure that scheduling is more efficient, so that if you do come in with an ear complaint, we are able to get you a hearing test at that visit almost all of the time-

... without overwhelming our audiologists. Which sometimes also happens, because we do see a large volume of patients and so then they've got to do a large volume of hearing tests one day. But then the next day, everyone comes in with sinus problems, they don't need to do any hearing tests. So, we're trying to figure out a way to help them not get overwhelmed on those days. So, it's a logistical problem in terms of allergies.

Exactly. Which I am currently working on, actually. I owe someone a phone call, so we're working on that. But from the patient's perspective, we're almost always going to be able to get that hearing test the same day. And if we're going to get it a follow-up, it's because it's not critical we get it the same day. And also, same goes with allergies. Sometimes people come in with a complaint that it seems like they have allergic rhinitis. They need to be worked up for allergies, but they saw me, so I'll make sure it's not chronic sinusitis. I'll suck them on nasal steroids and then I'll refer them to the allergist. I'll make sure they're off their oral antihistamines so they can actually get allergies, skin tested at the time. You're always adding value during those visits, but it might not be all wrapped up in the same visit.

It's really driven by the primary care physician or the patient themselves. They pick the doctor. Or they just say, join ENT and allergy, and then it's based on the patient's schedule. Like, "Oh, when would you like to be seen?" But most of us see most things. It's not like an academic practice where you've got your head and neck attending, and you've got your otologist, and your laryngologist, and your rhinologist, and your peds. Most of us see most things and most of the things that we see can be handled by everybody. And if you've got such a complicated problem that it needs to be seen by a subspecialist, then fine, we'll send you on what I was just describing. Our patients come to us undifferentiated for the most part, and then we take care from that. And most of the time you get taken care of by whoever happens to see you because you don't need a tertiary level academic center quite type care.

So, most otolaryngologists do not like seeing dizziness. Most don't. I happen to love BPPV, because people come in terrified that they've got something awful going on.

And they leave cured. They leave cured. They're like, "Oh, my God, you're a magician." Yep, it's magic. And then they send all their friends thinking that I'm going to help all them with their dizziness, that they think is vertigo, but it's not vertigo. And then they confuse positional vertigo with postural dizziness. Dizziness is complicated.

Dizziness is complicated.

And of the subset of dizziness that I feel is the most unsatisfying for everyone involved would be disequilibrium. With just like, I just feel off. I just feel off because they're really suffering.

But without any more specificity, there's vestibular rehab to help you with your balance. But disequilibrium is just... that's the toughest. But give me a BPPV any day.

As long as it's not some weird subset of superior canal cupulolithiasis, because classically it's posterior canal canalithiasis. But there's some subsets out there that you're like, "Well, the nystagmus is horizontal, but it's only on one side." It can get pretty hairy.

Oh, VNG. Yeah.

The calorics are brutal.

Actually, the academy guidelines for BPPV is if the symptoms are classic and you elicit the vertigo. You elicit it on Hallpike and you treat it, you don't need to do anything else.

Oh, okay. Got it.

I don't know how this model happens again, because it took a big sacrifice on the part of the founding partners to be able to-

... share heir equity. Get it started and be able to share that equity in this way. I don't see many others following that model.

When I talk to people who are in other specialties, because I'm never going to lead any otolaryngologist or allergist away from my practice, but I spin it in that way. I said, if you're going to join a practice, a private practice, one of the things that you need to ask them is how much is equity worth to them. Because you took risk. You sacrificed financially in order to create this thing. That has a monetary value. And so, if you decide ahead of time what that monetary value is, you agree upon it, then there's a path to equity, but you have to ask that question before you're wrapped up in it. Because if you've been working there for five years and now you're a partner, but you're not really a partner because you don't have that equity stake, you're already in too deep. It's too late. If you're interviewing for a practice, one of the things I learned is the interview, actually, the negotiation begins when you're interviewing to be in the practice. That's when you're learning what they really want out of you. And that's where your leverage really is, because once you get that contract, they know you're joining them. Your leverage is gone.

You're not walking away because you're already in too deep. So, in the same way, if you've already been practicing there for a while, you're not likely to walk away. And so, before you even begin, figure out how much that equity is worth and try and create a path. It might be a very long path, but it has a monetary value to that person, and so it might be worth it to... Now, some people just want to be employed, and that's fine with them. And in fact, in our practice, even if you're a partner, you can treat it like you're employed because you just see your patients and go home. You don't have to get involved in the management. But I think that's the reason it's unlikely, is because it's going to be hard to just pass away, but you know what? Yeah. Everyone, you get equity, you get equity, everyone gets equity. That's unlikely. That being said, there's going to be a point in time when there's the blow-back against private equity and the blow-back against all these employed physicians. And they look for something better.

Yeah. And we're out there. We're out there. If you're feeling it. You were bought by private equity like you are a commodity that was purchased with the sale of your practice. And you don't appreciate that and you don't like the way that they're treating you, come talk to us.

ENTA and we're looking.

Capitol Hill. Capitol Hill, because those big health systems have lots of money for lobbyists and we don't. And they get all this money from facility fees, and so they're able to influence reimbursement in ways that we are not, that we're at a big disadvantage. And so, if we would be on equal footing with them somehow, in terms of being able to lobby Capitol Hill and navigate how policy decisions are made, we'd be in a much better place.

For us. There was something that President Obama said when he was talking about the Affordable Care Act decades ago. I mentioned something about use tonsillectomy as an example. And all the otolaryngologists went... because we're actually reimbursed. We're not incentivized to take out tonsils. We're not incentivized to do really most surgeries, because our time is better spent in the office than it is in the operating room.

So, we're not incentivized to spend time in the operating rooms. But again, question from the beginning, you got to decide what lights you up.

And if you're seeing stuff, if thyroids light you up, you got to keep doing them. You got to keep doing them. I love seeing kids. I love seeing kids. I do tubes, tonsils, and adenoids, tons of them because I love seeing kids. Do kids pay well? No, but I enjoy my job.

So, we're incentivized to stay in the office, not go to the operating room, which is preposterous. I mean, should we be incentivized to do surgery? There is a conflict of interest there and I understand that. But at the same time, one of your joints gets infected. Holy cow. The complexity that goes into these types of surgeries, and the care required, and all the explaining beforehand, and the workup, and everything, to get reimbursed poorly, it's just a crime. But the health systems are able to find a way to recoup through all of their facility fees. Now, I understand this is all very complicated because they do take care of populations of the uninsured and they got to eat the cost. And they take a lot of Medicaid where they're not reimbursed very well. So, I do, but nobody's really sad for the health systems, right?

They've got ways, they've got levers that they can pull that we just don't have. So, that's the magic wand is equal footing on Capitol Hill somehow.

So, I'm still on social media, but I'm not active. Actually, because I stopped the podcast in April, I am not really posting because I had people that took snippets and really did my postings for me. So, I still have the handle of @succeedinmedicine on Threads and on Instagram. And I'm on LinkedIn as Bradley B. Block, middle initial is B as well. So, they can find me there if they want to message me and have an interesting conversation, because I like having interesting conversations.

Graham, thank you.