When Louis Levitt graduated from the Medical College of Virginia more than three decades ago, the path for most orthopedic surgeons was to work for a hospital, join a private practice — or both. Like a lawyer’s pursuit of a partnership, you patiently worked your way from newbie to set-for-life status, enjoying the money and stability that went with it.
Levitt tried that.
“They wanted me to be patient, be an indentured servant,” he said of his time answering endless calls for an emergency room, making home visits and schmoozing senior physicians and hospital administrators.
He didn’t want to wait, so he quit to strike out on his own. Levitt opened a one-man shop at 19th and M Streets NW in downtown Washington, where he still practices — 33 years later.
Once a little solo practice, Levitt’s now has a thriving business with four fellow doctors, nearly 50 employees and 4,000 patients a month (including me, nearly 20 years ago). The business grosses $8 million to $9 million a year. Levitt’s office fills 16,000 square feet across four floors. It includes 10 physical therapists.
Like many professionals these days, Levitt, 67, needed to become an entrepreneur to survive.
“There is a certain amount of business one learns when one starts his own practice and builds it from scratch for 33 years,” he said.
Three years ago, Levitt and two other doctors organized the Washington region’s orthopedic surgeons into the largest U.S. practice of its kind. The company, with the focus-group-tested name of the Centers for Advanced Orthopaedics — the “Centers” — has 174 owner-doctors.
Its 1,500 employees include 300 nurses, physician assistants and physical therapists. It will gross around $200 million in revenue next year, making it No. 62 among the recent top 100 largest private corporations in the region.
Orthopedic surgeons are the people who handle bad knees, fractures, nerve issues and ligament tears. Orthopedists do well. Compensation for private-practice surgeons generally averages $400,000 and up, depending on specialty. Doctors who specialize on spinal work can earn more than $700,000.
“I became a physician because my dad was a doctor and he made it look enjoyable,” he said. “I went into orthopedics because it seemed mechanical, and fixing fractures intrigued me.”
Levitt also is a partner in several surgical centers begun 12 years ago that were designed to compete with hospitals.
“Starting the surgical center and overcoming obstacles convinced me that if you take the initiative and persevere, you can improve health care outside the hospital,” he said.
That gave him the confidence to go ahead with the Centers for Advanced Orthopaedics.
The Centers is a giant collective — dozens of individual physicians’ practices bound by a common infrastructure — that was formed in response to rapid changes to their business, not unlike the legal profession, which has seen huge dislocations in the past decade as clients demand lower fees and ask more questions about bills.
“Our efficiencies are lowering costs, which is a dirty word,” he said.
Levitt and his fellow physicians felt pressure from several places: Obamacare’s requirements for electronic record keeping, encroachment from hospitals and increasing demand from consumers and insurers to lower costs.
As he sees it, “modern medicine is all going to be driven by data and statistics.”
One big driver: the 76.4 million baby boomers (those born between 1946 and 1964) who will be needing their joints and bones fixed.
“The baby boomers are falling apart in record numbers,” he said. “The good news, we are in a perfect position to take care of them with empathy and kindness. We can also be more efficient and deliver health care at a lower cost.”
Its deeper purpose is to create a more market-driven, competitive practice that has the scale to buy everything from malpractice insurance to syringes more cheaply. It allows them to centralize the billing, scheduling and bill-payment system that processes close to $3 million a day.
“All the individual practices would be controlled and regulated,” he said. “Everybody paid the same way. All the checks through one company. The computers scrub all the bills and pass them through one electronic system.”
Other medical specialists have forged similar collectives. Capital Digestive Care, established in 2009, unified more than 50 gastroenterologists across the Washington metropolitan area.
“Economies of scale is a big advantage,” Levitt said. “I go to a vendor and I want a substantial discount because I am going to deliver 174 orthopedic surgeons who are going to buy from you. You better give me something better than what you are going to give me as a private practice. “
When they started the Centers, he and his fellow physicians combined back-office operations, including billing, purchasing, insurance, computerization and scheduling. They combined 14 computer systems under one umbrella. They hired a Philadelphia-based accounting firm to show them how to integrate and work under one tax ID.
Levitt and his doctors cut their malpractice costs nearly a third by shopping the business nationally.
The company took bids on supplies such as local anesthetics, rugs and the “table paper” you sit on while getting examined. They save more than 25 percent.
Levitt works four days a week at his downtown office. He spends evenings and Fridays running the Centers.
The native of Petersburg, Va., balances his businessman side with his physician side. He hires and fires, sets up retirement programs, buys supplies, meets a budget and cares for patients.
As a manager, he has to have the peripheral vision to see how decisions affect everyone in the office, directly or indirectly.
Case in point: “Most of my doctors live in D.C., so if they stay late to see patients, they are home in 15 minutes,” he said. “Most of my employees live outside the Beltway, so when we don’t close the office on time because physicians need to stay late, employees miss their [commute] window. It’s the staff that suffers.”
A new generation of patients demands that he master the digital universe. Levitt pays close attention to his online reviews.
“Millennials could care less if you are the greatest doctor in the world,” he said. “They presume you know what you are doing, and they want to get in and out at the least cost to them.
“If a patient waits more than 30 minutes in the waiting room to see the doctor, they will rate the doctor down online . . . or blow the appointment because they were angry.”
The huge shift of patients booking appointments online has forced doctors to hire reputational managers and grow more customer friendly to avoid bad online reviews.
Since more and more patients are finding physicians online, “reputation is very important,” Levitt said.
Levitt has a certain no-nonsense approach to management that comes from having to meet a payroll every couple of weeks. You can chalk some of that up to his wife, who owns a thriving furniture business in the Washington market.
“I would come home and ask her advice and what I should do, and I would go back to work the next day and say we should to this,” he said. “Everyone would think I was brilliant.”