Gaston County docs break from hospital to form independent practice
Brian Wysong has spent the past 13 years practicing medicine in Gastonia, mostly as an employee of CaroMont Health, Gaston County’s dominant hospital system. On Dec. 2, Wysong and six other doctors are opening an independent practice, Gaston Medical Partners, which they say will better serve patients and provide more freedom over operations.
But CaroMont, a not-for-profit that relies on primary doctors to make referrals, is hobbling their startup efforts by citing noncompete agreements that restrict Wysong and colleagues from practicing for a competitor within 20 miles.
“While these physicians are valued members of our medical staff, we have no desire to keep them [from] transitioning away from CaroMont Health,” says Costa Andreou, the hospital’s executive vice president. “However, we do believe they must honor the obligations set forth in their contracts.”
Gaston Medical is modeled after Charlotte’s Tryon Medical Partners, a group of more than 80 physicians that split in August 2018 from Atrium Health, the state’s largest health care system. The Gaston Medical physicians plan to hire a Tryon affiliate to help manage their new practice.
When Wysong joined the South Point practice in 2006, it was a private business that hired Winston-Salem-based Novant Health to provide administrative services. David Locklear co-founded the Belmont practice in 1981 and is among the seven physicians starting the new practice. South Point remains open with three physicians and several physicians’ assistants.
“When I first started there, for years people were happy,” Wysong says. “I would say in the past three to four years, it’s just been frustration, nobody really talking to each other and never knowing if you’re going to have a job tomorrow.”
Legal changes, including a 1992 federal law prohibiting doctors from self-referrals, pushed practices to be either independent or to join a hospital system. The changes ended the South Point-Novant arrangement, prompting CaroMont to buy the business in 2007.
“[CaroMont] basically said, ‘We’ll let you practice the way you practice,’” Wysong says. “‘… But we want to own you, and we want our names associated with you.’”
In recent years, South Point produced at least $120 million in annual revenue for CaroMont, officials say. The system employs about 250 clinic doctors across 57 locations, mostly in Gaston and Cleveland counties, and netted $603 million in operating revenue in the 2018 fiscal year.
South Point operated semi-independently under CaroMont ownership until about three years ago when the hospital system switched to the Epic Systems medical records service, says Michael McCartney, a family physician at the practice for 10 years. The shift centralized operations, reducing the doctors’ flexibility, he says. Verona, Wis.-based Epic is among the largest U.S. medical-records software companies, serving more than 250 million patients, according to its website.
Andreou says integration into a single system offers less expensive coordination between doctors and leads to better outcomes. “Our primary-care physicians are better able to coordinate care with physicians and other providers across one electronic medical record,” he says.
CaroMont centralized billing, scheduling, medical coding and lab work, Wysong says. “They said to us, ‘Let’s try these changes that’ll be better for everybody and if you don’t like them, you can always go back to the way things were,’” he says. “But the reality is once you go in that direction, there was absolutely no turning back.”
South Point’s turnover increased when the doctors lost control of staffing, while technical problems took longer to address when a technology employee was replaced, Wysong adds. The practice would incur extra costs when CaroMont added more staffers, often without asking the physicians, McCartney says.
“What’s good for the hospital doesn’t always mean it’s good for an outpatient independent family practice,” he says. “When those two things don’t see eye to eye, we would lose out. The hospital is always going to protect the hospital system.”
Andreou calls CaroMont’s approach “highly collaborative and community-focused. We place great emphasis on being clinically led, meaning physicians play a critical role in decision-making.”
Several South Point doctors agreed in mid-2019 to break off from CaroMont under a contract that allows both parties to terminate employment with a 90-day notice. The agreements prevent South Point doctors from practicing for a competing hospital or health care system within a 20-mile radius of CaroMont, soliciting patients or hiring current staff for two years.
The South Point physicians filed a lawsuit aiming to void the noncompete clauses, arguing Tryon isn’t a competing hospital or system. The closest rival facility is a gastrointestinal surgical center 23 miles from CaroMont, and Gaston Medical physicians won’t practice there. They also assert that CaroMont can’t restrict the doctors from practicing in the area because of potential harm to their 20,000 patients. Gaston Medical leased office space near CaroMont’s main hospital and filled 24 of 25 staff positions by mid-November. Thousands of patients have said they will follow the physicians.
CaroMont offered settlements in which the doctors would pay from $768,000 to $1.9 million to buy out their contracts — but still face provisions blocking them from working with other local hospitals for at least two years. “We have presented several fair and reasonable options that would allow the physicians to join Tryon Medical Partners, continue to practice in Gaston County and fulfill their contractual obligations,” Andreou says.
In September, CaroMont provided the Gaston Medical doctors’ patients with contact information for other area physicians. Still, Wysong expects most of the group’s patients to move with them, noting that Tryon Medical achieved a 95% retention rate after its split from Atrium. Many physicians listed by CaroMont already have full patient loads, he adds.
In mid-November, Gaston Medical asked the N.C. Medical Board to rule against CaroMont’s restrictive covenants, noting that the regulatory group’s policy prioritizes patients’ welfare, autonomy and continuity of care. A response is likely to be issued by mid-December.
The Medical Board defines that physicians should generally control their medical practices and prioritize patients’ interests, says Dale Owen, CEO of Tryon Medical Partners. “[CaroMont’s] charter compels them to uphold the rights of the patient first,” he says. “That’s not being done here.”
CaroMont’s Andreou says, “We remain committed to finding a solution that is best for all parties involved, most importantly, our patients.”
Other N.C. doctors are following the case closely, Wysong and McCartney say. Once physicians see there’s an opportunity to succeed independently, they expect more to make similar moves.
“We’ve been awoken over the last year, and we don’t want to go back to sleep,” McCartney says. “I think as more doctors hear about it, more and more people are going to be excited about blazing their own trail and taking care of patients the way they want to take care of patients.”
(An earlier version of this story incorrectly reported how many physicians remain at South Point and the timing of when the Gaston Medical physicians agreed to leave CaroMont.)