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Analyzing DuPage Medical Group’s Success as a Multi-Specialty Practice Platform: 4 Key Points

Posted in Healthcare Services Investing

The next in our series of posts sharing key takeaways from panels at the Healthcare & Life Sciences Private Equity and Lending Conference discusses the success of DuPage Medical Group. It is authored by our colleagues Scott Becker and Diana C. Castro.

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Analyzing DuPage Medical Group’s Success as a Multi-Specialty Practice Platform: 4 Key Points

By Scott Becker and Diana C. Castro

Formed in 1999, DuPage Medical Group (“DMG”) has since grown into one of the largest and most successful multi-specialty physician groups in the United States with annual revenues of a billion dollars. At the 16th Annual Healthcare and Life Sciences Private Equity & Finance Conference in Chicago on February 21 and 22, a panel composed of Craig Frances, Managing Director at Summit Partners, who is widely regarded as a pioneer and godfather of healthcare private equity investing, Michael Kasper, Chief Executive Officer at DuPage Medical Group, and Scott Becker, Partner at McGuireWoods, presented an introspective look at DMG’s multi-specialty practice platform success story, analyzed various physician practice trends in the market, and discussed a wide range of healthcare investing issues.

Here are four key points from the panel discussion.

1. Physician leadership is key. In reflecting upon the characteristics that have contributed to DMG’s growth and continued success, Michael Kasper and Craig Frances identified physician leadership as an essential component, noting that it is critical for the physicians in an independent multi-specialty medical group to believe in the mission and objectives of the group.

2. A tilt in growth strategies towards organic expansion. In addition to engaging in platform acquisitions and aqui-hire strategies in the Chicagoland area, DMG is focusing its growth strategies on hiring physicians who share in the mission and values of DMG. To do so, DMG has invested resources to develop a pipeline of recent medical school graduates to join the organization and enhanced its recruitment efforts by, in part, emphasizing DMG’s partnership approach and opportunity to work outside of a hospital umbrella to physicians. DMG credits the focus on investing in physicians while they are still learning and training with a higher return on investment than other traditional growth strategies, especially given that consolidation opportunities in certain markets may be more limited.

3. A shift to value-based healthcare. In preparing for the future, healthcare providers should consider investing resources to prepare for value-based care models. Value-based programs are designed to reward physicians and healthcare organizations for the quality of care they provide to patients, as measured by higher-value outcomes and a reduction in unnecessary interventions. In order to adjust to succeed under value-based reimbursement programs, healthcare providers will need to implement changes in their operations and work strategies. Stressing the importance of value-based care in the future of healthcare, the panelists offered their opinion regarding the greater value to patients in the long term resulting from a shift to provider-based care, as opposed to increased consolidation for improved payor leverage.

4. The future role of telehealth, technology, and creating a transformative patient experience. In closing, the panelists forecasted the ubiquitous role that telehealth in the coming years and the important role that technology companies and social media platforms will continue to have in patients’ daily habits and health considerations by, among other things, encouraging people to consume healthier foods, engage in physical activity, and communicate with healthcare providers. With these changes in mind, Michael Kasper noted that DMG will continue to strive to create a transformative patient-centric experience for its patients by increasing its service lines, sites of care, and physicians who share in DMG’s values and deliver high quality care with excellent customer service.

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