This article appeared in the August 21, 2019, edition of the Charlotte Ledger, an e-newsletter focused on local business news. Sign up for free here.

Nearly a year ago, a group of about 90 doctors with Mecklenburg Medical Group left parent company Atrium Health to launch an independent practice – Tryon Medical Partners.

It was one of the Charlotte area’s biggest healthcare stories of the year, as it defied the trend toward industry mergers and consolidations. The doctors pushed Atrium to allow them to leave by filing a lawsuit that claimed the hospital system was “self-serving” and “monopolistic” and run by a “bloated management bureaucracy.” They thought they could run an independent medical practice better and more cheaply, with more focus on patients.

Now, a year later, Tryon Medical CEO Dr. Dale Owen tells the Ledger his medical group — the largest primary-care practice in the Charlotte region, with 300 employees and eight offices — has big plans for growth. The experiment of separating from big medicine is attracting attention in national trade publications and from doctors around the country who want to replicate the experience.

This month, Owen discussed setting up the practice, his growth plans, the relationship with Atrium, the future of healthcare and what he calls the failure of hospital-controlled medical systems. Remarks have been edited for clarity and space.

Q: What has the last year been like?

What really has been the most inspiring is that these doctors have never wavered in their commitment to each other and to the patients and to what they know is right in medicine. The patients have supported us because they know we are doing it on their behalf.

About 94% of our patients have already registered with our group. We sent out 115,000 letters with Atrium, and we have 108,000 already. That’s a big deal.

Q: Did you have any projections before you did this about how many you thought you would keep?

We tried to stay away from that. We didn’t want to set expectations high or low. Because this is the first time this is being done in the entire country, we felt like there was nothing to base it on. I personally thought it would be extremely high. Others thought it would be 70%. Who know what the hospitals thought, but if they knew it was as high as it is, they might have taken a different stance.

Q: To serve those 108,000 patients, you had to set up a lot of offices in short order. You had just a few months to get things off the ground. What was that process like?

I can’t give you all the secret sauce, but I think it is being prepared first, knowing what your options are. No. 2, there is a sequence of events you have to put together to make it work right.

No. 3, architecture firms and contractors, they really partnered with us to make this happen.

The level of preparation and getting the real estate together, it took the most strategic effort and planning and everybody really working together. It was a massive undertaking.

Q: You’re a cardiologist. What’s it like being thrust into the business side of things when traditionally, I’m guessing, you’d been more on the medical side?

I’m still seeing patients at about 70% of the time I was before.

It is challenging, wearing both hats. But seeing the faces of the patients and how happy they are and how happy the physicians are, it’s very inspiring.

Q: How would you describe what y’all are doing as being different from what Atrium and Novant are doing?

Our goal is to get out of fee-for-service very quickly and move more into a value-based medicine platform. With the fee-for-service foundation that is wreaking havoc across the nation – especially in the Southeast and especially here in Charlotte – the incentives are all wrong. The incentive is to do more and refer more patients so you make more.

Interview continues below

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Q: What’s it like for the doctors, and what’s it like for them financially compared to where they were?

One of the coolest parts about this is not only are we the first group in the nation to do it, but we did it on our own backs. Patients need to know that we are all in.

We had a conscious effort not to have anyone else have an ownership stake in us. We don’t have any private-equity backing. We are 100% physician-owned and operated. We put our professional and financial careers on the line.

Q: What is your relationship like now with Atrium?

We look at this whole thing that happened as being in the rearview mirror. You have to learn form the past, but you don’t have to dwell on it. What we have to focus on is the future and direction of healthcare. I can promise you that North Carolina is at the epicenter of it, more so than any other state in the nation.

A small incremental change is now meteoric and exponential. We are nimble enough to be able to anticipate and make changes needed to react to what is important. That’s something you’re going to hear more about relatively soon.

Q: Do you still refer patients to Atrium?

We don’t have any problem. We are very much hospital-agnostic. We are looking for what is the best outcome for the patient. We have to prioritize that. If it’s a surgical need, it’s who is the best surgeon. Where they are becomes secondary to us.

Q: What you’re doing seems to cut against the grain of hospital systems consolidating and buying and merging. Are you at the leading edge of a movement, and what kind of reaction have you received around the country?

I’ll use the term somebody else used. They called it “the shot heard ’round the world.”

It’s pretty clear who is following us on our website. These folks are from all over the country.

Q: Are other practices following your lead?

As you might image, it is hard if you don’t have a critical mass as a referral source. One to 10 doctors leaving? Maybe that’s not earth-shattering to a hospital. Sixty-plus is a big deal.

As Atrium, we were the largest referral source in the entire county when we left, and we are afterward.

Q: What does medicine look like in a few years? Do you see people heading your way? Do you see more groups breaking off? Do you see your practice growing?

I’ve always said you can’t stand still or you’re target practice. We will be growing. We are growing. We will be growing more in the coming months.

As far as my predictions as to how things go, it is really important that other physician groups see that this succeeds and that it is a stable platform to jump onto or there’s a similar platform for their local area that they can jump onto.

It can’t be about what’s best for big business. It has to be about what is best for patients – always. Doctors have to lead this.

Q: How are you attracting new patients? What is it like being the scrappy little guy as opposed to being part of the big hospital system?

One of the telling signs is when one of the patients is a physician from one of the hospital systems. Their experience is phenomenal, and they talk about it.

We have our physicians organization. And we have our management-services organization (MSO), with a lot of our business brain trust. We have the ability to take that MSO out on the road. We can merge with other groups, we can manage other groups, we can consult for other groups.

Q: Are you doing much consulting with other groups?

We have been a lot of places and had a lot of talks with groups that want to do things: locally, this city, this county, this state, and lots of other areas around the country. They are trying to get themselves organized. The preparation for this took about a year and a half before we ever filed suit. There is a lot of preparation that goes on being the scenes.

Q: How important is growth to your financial model? Do you need to keep growing and keep adding patients and adding services?

I call it strategic growth. What is best for an area? Let’s say a 10-person group wants to come out. We help them decide whether to consult, manage or let them join us. What are their needs?

There’s a whole playbook to this, and I don’t want to share the playbook with you. Growth depends on what the group is and what the need of the population is in that area.

You have to base this on primary care. If you look at other developed nations throughout the world, the majority of them spend around 14% of the healthcare dollar on primary care. The U.S. is woefully behind at about 5 to 7%.

Because they don’t invest in primary care, primary care gets stuck seeing volume, which then creates more fragmentation because there is no time to see the patient appropriately and efficiently. That then creates the boomerang of more referrals, more hospitalizations and so forth, which is exactly what the hospitals want. They want to push volume. We want to push value and quality and outcomes.

Q: With what the state treasurer is doing with the state health plan, what made you want to sign on with that when the big hospital systems weren’t on board with it?

The taxpayers of the state are paying way too much for the care that is being delivered. It is bloated in administrative costs. The hospital-controlled system is a national failure, from a standpoint of providing value and outcomes at an appropriate cost.

The hospitals all talked, and they don’t want to do anything differently because they don’t want to be transparent with their pricing. They don’t want people to know what their pricing is.

The reason we did it and the reason we signed on was it was good for the taxpayers. It was good for the patients. We were not going to leave the teachers and other people out there stranded not able to see people. So that’s why we signed on. It’s a shame the hospitals didn’t see it that way.

What’s really been demonstrated in this process is who is on the right side of change for the value to the patient. That line has been drawn in the sand. Those who signed on demonstrated that that’s what they are in it for. The others are clearly not.

It forced everybody to raise their hand to be helpful or not. It defined who’s on the right side.

When the treasurer went to UNC Hospitals and to Atrium and asked for all the pricing, because he felt like he should know what the taxpayers were paying for, every single bit of pricing was redacted. You should have seen the black marks throughout the book. They didn’t so much as tell you what a Q-tip cost.

That’s like telling a buyer of a car that you’re not allowed to know if you’ve paid for air conditioning or not.

Q: That underscores how you’re doing things differently than things have traditionally been done?

You can’t keep doing the same thing the wrong way and expect a different outcome. Hospital-controlled healthcare is a failed system. It’s been demonstrated over and over and over again.

We are getting ready to announce significant growth in the very near future.

Fear is the main problem here. Fear of not having a hospital to go to. Fear of doctors leaving a hospital system because they don’t know a stable platform to jump onto. It’s all about control based on money and fear. This group didn’t listen to all of that. We did it our way. We can tell you it’s not something to be afraid of.

Q: Were there ever any threats?

[5 second pause] There was a lot of miscommunication. You might anticipate that some of it was international. Sometimes what you don’t tell somebody is really the issue. You tell them a little piece but don’t tell them the whole story. That happened to a lot of patients. We’re glad the patients saw through all of the PR and came home to the group of people who care about them and were willing to take a risk.

Q: When you talk about growth, are you talking about growth in physicians or practices or what?

All of the above.

Q: How do you compete with the big guys? I’m guessing you don’t have as big of a marketing budget. I don’t see big billboards on the interstates saying Tryon Medical Partners. How do you attract patients in the absence of a massive marketing budget?

We’re the doctors. Patients don’t follow hospital administrators. Patients follow physicians, people who really care about them and who went to school to prove it. That’s who they follow.

If you look at what we do, hospitals do great things inside their hospital. There are a lot of great people performing great medical care. There is a tremendously bloated administrative cost in hospitals.

We don’t do that. We are on the outpatient side of it. About 10% of healthcare is provided in the hospital, yet they are trying to control all of healthcare. They are trying to gobble up physician groups so they can garner all of their referrals.

When you’re a hospital system, do you think that you are lauded for referring to the hospital across the street? It’s essentially a captive referral system, which is why they try and grow bigger and bigger, so they can dominate markets.

We’re not going to play that game. We are better at the outpatient side, and that is where 90% of healthcare is practiced. And we’re better at it.

• atrium
• Charlotte
• healthcare
• hospitals
• medicine
• novant
• primary care
• tryon medical
• unc hospitals