Crains New York - November 26, 2012 - (Page 4)

IN THE Health care’s shrinking dollar MARKETS squeezes small-time doctors by Aaron Elstein Practices sell out as big hospitals and insurers angle for edge amid reforms BY GALE SCOTT Trying to stem losses at his primarycare practice a few years ago, William Latreille faced a choice. He could sell his upstate office to a hospital, becoming its employee. Or he could sign an insurance-company contract that paid him more but dictated how he practiced medicine. “I was really in the red,” he said. Dr. Latreille’s circumstances have become increasingly common for New York doctors. Private insurers and government, as part of health reform’s cost-cutting, are changing the way they pay for care. Rather than reimburse for every service a doctor performs, they have begun to pay lump sums per patient, forcing doctors to more efficiently manage the health of patients, especially those with chronic illnesses. To adapt, doctors have been forced to change the way they practice. They have to stay open longer, use electronic records, keep better tabs on patients with chronic illnesses and make other changes ‘Physicians reached the tipping point,’ said one doctor aimed at keeping patients healthy and out of expensive hospitals and emergency rooms. Many, like Dr. Latreille, cannot compete. Instead, they’ve sold out. “Physicians reached the tipping point, with shrinking reimbursements and higher expenses,” said Dr. Louis McIntyre, a White Plains orthopedic surgeon who with his partners sold their practice to White Plains Hospital last year. Five years ago, about half the doctors in New York were in private practice. Now they are in the minority: About 70% are employed either by a hospital, a health system or a large doctors’ group, according to the Medical Society of the State of New York. Private practices, though, aren’t simply vanishing. They are coming under the control of hospitals and insurers, either by being acquired or by entering into contracts that force doctors to follow new rules. North Shore-LIJ, for instance, See DOCS on Page 14 BRUCE BENT AND BRUCE BENT II were cleared of civil fraud charges brought by the SEC. cohnreznick.com I Why SEC whiffs on prosecutions FORWARD THINKING CREATES RESULTS. J.H. Cohn and Reznick Group are now CohnReznick. When it comes to success, it’s not just what’s now—it’s what’s next. With partner-level service and an unprecedented combination of deep industry expertise, experience and insight, CohnReznick helps move your business ahead. Always driving. Always delivering. That’s forward thinking. That’s CohnReznick. t’s been a bad few weeks for the Securities and Exchange Commission’s efforts to hold prominent Wall Street executives accountable for actions that contributed to the financial crisis. A Manhattan jury in mid-November cleared Bruce Bent and Bruce Bent II, the father-son heads of money-market fund company Reserve Management, who the SEC charged with misleading customers after their fund appropriate place to rule on that charge, since the transaction occurred overseas. The judge also dismissed a charge involving a Dutch bank. The SEC appealed the ruling involving the German bank, which a judge denied last week. The commission nonetheless has a shot at victory against Mr. Tourre. Still alive is the heart of the SEC’s case, which alleges that Mr. Tourre misled investors and ACA Management, the firm that helped select the mortgages put into the security that was designed to flop. But last week’s ruling means Mr.Tourre will probably be able to settle for a lesser amount. The difficulty regulators have had in winning these civil cases against individuals seems to have taught them to spend their time pursuing Wall Street firms rather than the people who work in them. Last week, for instance, New York state Attorney General Eric Schneiderman filed a civil fraud suit against Credit Suisse, alleging misdeeds in selling mortgage-backed securities. Not a single individual was charged. In fact, not one person’s name appears anywhere in the 32-page complaint, just titles like “head of due diligence” and “senior RMBS traders.” Based on the attorney general’s depiction of events, Credit Suisse could quietly settle without having to cough up the decision-makers who allegedly defrauded investors. “broke the buck” in the fall of 2008. Days later, the SEC dropped its suit against Wall Street executive Edward Steffelin,the only individual charged in a case involving a toxic mortgagerelated security created by JPMorgan Chase, which earlier had paid $154 million to settle the matter. And last week,the SEC suffered a setback in its high-profile case against Goldman Sachs’ Fabrice Tourre. The self-described “Fabulous Fab” was a junior banker and somehow the only individual charged in the SEC’s sensational 2010 fraud case against Goldman. The investment bank settled the matter by paying $550 million, grudgingly acknowledging making “a mistake” when it failed to tell customers that it sold them a mortgage-related security that was intended to blow up and benefit another client: famed hedge-fund manager John Paulson, who had bet against housing and had input in creating the deal. Although Goldman has moved on, the case against Mr.Tourre continues and looks headed for trial next summer.The lawyering is going full tilt. Mr. Tourre’s side scored some points last week when a federal judge denied an SEC attempt to reinstate one of the fraud charges. The particular allegation centers on Mr. Tourre’s role in helping sell $150 million of the junk-mortgage deal to a German bank. A judge said federal court in Manhattan wasn’t an Ken Baggett, CPA Co-CEO Joe Torre World Champion Manager Tom Marino, CPA Co-CEO 32 CohnReznick is an independent member of Nexia International Accounting Tax Advisory THE NUMBER OF SHOPPING DAYS between Thanksgiving and Christmas. That’s a 6.3% increase over last year’s day count, owing to the earlier-than-usual Thanksgiving this year. For what it’s worth, analysts at brokerage ConvergEx Group expect Cyber Monday sales to rise 18% this year. 4 | Crain’s New York Business | November 26, 2012 ap images http://www.cohnreznick.com http://www.cohnreznick.com

Table of Contents for the Digital Edition of Crains New York - November 26, 2012

Crains New York - November 26, 2012
IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
OPINION
ALAIR TOWNSEND
GREG DAVID
SMALL BUSINESS
REPORT: REAL ESTATE
THE LIST
REAL ESTATE DEALS
CLASSIFIEDS
FOR THE RECORD
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crains New York - November 26, 2012