Business Spotlight: All in the Head

When Springfield Neurological and Spine Institute LLC was formed by a group of doctors in 2001, the goal was to provide quality neurological care to the community. The doctors believed they could serve the community more effectively as a group than individually.

Nine years later, the company is one of the largest private neurological practices in Missouri, adding doctors who treat neurological subspecialties and, as of a Jan. 1 acquisition, is exclusively partnering with CoxHealth, which is considering building a neuroscience center.

“We hoped to put together a group of us that was large enough to establish a foundation,” says Dr. Mark Crabtree, a founding partner of SNSI with Dr. John Ferguson, a 40-year Springfield doctor. “I think we have achieved that.”

The doctors expect the partnership with Cox will grow SNSI’s footprint across the region. The 80-employee clinic serves patients from about a 100-mile radius of Springfield, mostly from doctor referrals and from hospitals in Carthage to the west, Osage Beach and Rolla to the north and east, and Harrison and Mountain Home, Ark., to the south.

Expanding farther, Crabtree says, would have been difficult as an independent firm.

Professional service agreement
Although the CoxHealth acquisition wasn’t official until the start of 2011, Crabtree says groundwork was laid eight years ago, when a primary affiliation with Cox was established.

Until 2003, SNSI partnered with both St. John’s Hospital and Cox before a difference in medical philosophy led to a breakup with St. John’s, says Brian Williams, SNSI president since December 2002. Williams helped form The Bank and served as president of its Battlefield Road branch before being recruited to SNSI.

SNSI managing partners are Crabtree, Ferguson, Thomas Briggs, Wade Ceola, Edwin Cunningham, Charles Mace, Chad Morgan, Salim Rahman, Robert Strang, Ted Lennard, Jeffrey Woodward and Michael Workman.

“Integration was the next logical step,” Crabtree says. “Cox shares the exact vision we do.” The acquisition is a natural progression of the partnership, said Cox president and CEO Bob Bezanson.

“This integration will help us to better coordinate patient care as well as increase efficiencies and quality while controlling cost,” Bezanson said via e-mail. “By working closely with our Ferrell-Duncan Clinic partners and others we hope to develop a neuroscience program that will have a national reputation.”

SNSI’s vision, Williams says, has evolved since its founding. The aim is to provide efficient, nonfragmented care by using the resources of Cox.

“Along with Cox, we want to provide a multidisciplinary approach to neuroscience,” Williams says. “It has evolved from neurosurgery to neurosciences. We wanted to add nonsurgical services. Now, we want to engage other services and clinics.”

Under a professional service agreement, Cox purchased SNSI, its imaging center and its assets for an undisclosed amount, Williams says. The physicians continue to work for SNSI while other staff members are now Cox employees, similar to Cox’s arrangement with Ferrell-Duncan Clinic.

“In my professional opinion, over the next several years we’ll see a lot more consolidation of services in the entire industry,” Williams adds. “American people, the government, the people paying for health care – employers – are demanding improved quality at reduced cost.”

The purchase included medical equipment such as X-ray and C-arm fluoroscopy machines. Cox also assumed lease liabilities for SNSI’s MRI machine and a CT scanner, Williams says.

The value of the building and land is $3.1 million, according to Greene County assessor data.
Joining Cox will offer SNSI the chance to expand, offer research opportunities and participate in teaching endeavors, Crabtree says.

“We basically had reached a very stable plateau with the size of our group and what we had to offer,” Crabtree says. “Those are things that a large private practice neurosurgery group has difficulty achieving.”

The clinic’s services include brain, spine and nervous system treatment, including neck soreness, back pain, extremity numbness, ruptured discs, headaches, seizures and tumors.

A shrinking group
The nine neurosurgeons at SNSI are among 3,200 neurosurgeons nationwide, Williams says.

The extra schooling required – four years of college and three years as a resident – deters many potential neurosurgeons, Williams says, and the highly specialized doctors face a greater risk of malpractice lawsuits.

Annual premiums for neurosurgeons average up to $300,000 in some states, according to the American Board of Neurological Surgeons. In 2005, neurosurgeons paid $28 million in malpractice claims.

Although neurosurgeons face historically high insurance premiums, Williams says recent tort reform legislation in Missouri actually has brought a decrease in what SNSI pays.

Williams noted that SNSI’s surgery rate is well below the 60 percent national average.

SNSI treats 19,000 patients annually; of those, 3,000, or 16 percent, are treated with surgery, Williams says. Of those surgeries, which account for the majority of SNSI’s revenue, 70 percent are for spinal treatment and 30 percent are for brain procedures.

About half of SNSI’s revenue comes from Medicare reimbursements, he adds, followed by 35 percent from managed care insurance; 10 percent from workers’ compensation; and 5 percent, self-pay.[[In-content Ad]]