Based on a PracticeCare® podcast conversation, Dr. Christopher Formanek on How to Compete with a Hospital, with Dr. Christopher Formanek, founder of Footsteps Podiatry in Baton Rouge and Gonzalez, Louisiana.
Are hospitals really taking patients away from independent practices, and how does it happen?
Yes. Dr. Formanek saw it starting about four years before the pandemic. Hospitals were merging, acquiring physician groups, and keeping referrals inside the system. Physicians who want to refer out face quiet pressure not to.
Does a hospital’s size make it unbeatable as a competitor?
No. A 1,000-physician group considered Dr. Formanek’s solo practice competition. Bigger means more constrained — bundled payment rules, instrumentation costs, and administrative overhead are examples. Independent practices don’t carry any of that.
What’s the practical effect of bundled payments on private practice competition?
It creates an opening for independent practices. Hospitals now get one fee for a procedure and have to split it among everyone involved — surgeon, anesthesiologist, physical therapy, lab work. To manage costs, some systems are already relaxing pre-op standards. Independent practices aren’t bound by any of that. In many cases you can do the same procedure in-office, deliver a better patient experience, and get reimbursed at a higher rate.
What does “finding your niche” actually mean in practice?
Find what your larger competitors aren’t doing, can’t do easily, or aren’t set up to do well. For Dr. Formanek it was minimally invasive foot surgery — performed through one-to-three millimeter portals, under local block, in-office, in 20-25 minutes. No sedation or fixation hardware. Patients walk out the same day. The hospital in his market doesn’t have the training or instrumentation to offer it.
The same principle applies in any specialty. What does your patient population need that the large groups aren’t delivering?
Why would a patient choose an independent practice over a hospital for the same procedure?
A few reasons that private practice owners can compete on directly:
- Twenty minutes in-office versus pre-op scheduling, history and physical requirements, and surgical center logistics.
- Dr. Formanek’s minimally invasive patients get their foot wet in four days. A comparable open procedure at a hospital can mean four months before full recovery.
- Higher-risk patients. Diabetics, patients on anticoagulants, poor healers — many aren’t good candidates for traditional surgery under sedation. Minimally invasive in-office procedures can serve them. Hospitals aren’t set up for it.
- Cash and self-pay. When you’re not carrying hospital overhead, those options become realistic.
Can’t hospitals just copy what independent practices do?
Yes, but not easily, and not quickly. Nobody else in Dr. Formanek’s region does minimally invasive foot surgery the way he does. It requires years of specialized training and instrumentation the hospital doesn’t have. Large systems are slow to adapt, and the bundled payment environment gives them less financial incentive to invest in new equipment.
Interesting twist: the hospital now refers patients to him for these procedures. Their physicians see the outcomes. Their patients ask for it. He became the specialist the hospital system relies on.
What should a private practice owner do right now if they’re losing patients to a hospital system?
Dr. Formanek’s advice:
- Look at your patient population. What do they need that isn’t being served well?
- Find the gaps. Not everything the hospital does — specifically what they’re not doing or not doing well. That’s where you compete.
- Build the skill before you need it. Dr. Formanek started training years before the competition intensified. When the time came, he was already there.
- Tell people. Being better at something nobody knows about doesn’t help you. Word of mouth, your website, content, formats like this podcast — use them.
A final note
This isn’t a podiatry story. Every private practice has some version of what Dr. Formanek describes — a service, a patient population, an approach to care that a large system can’t easily copy. You’re not trying to out-resource the hospital. You’re finding a clinical need that the hospital isn’t serving well.
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