The death of Michael Kasper, whose vision pushed DuPage Medical Group toward a national presence, leaves it at crossroads

May 08-- May 8--In recent years, small independent doctors' groups -- where owners actually treat patients -- have been disappearing, increasingly consigned to a sepia-toned era of care alongside Marcus Welby.

Faced with mounting costs, shifting regulations and burdensome billing requirements, physicians have been joining larger hospital systems that promise to handle it all for them.

But amid all that, at least one Chicago-area doctors' group has not only stayed stubbornly independent but also has swelled in size. Over the past decade, DuPage Medical Group has quietly grown from a few hundred doctors to more than 700 today, its signs sprouting up across the west and southwest suburbs.

Much of that growth happened under the leadership of CEO Michael Kasper, who died of undisclosed causes on Saturday at the age 46. The DuPage County coroners' office has said it will not release a cause of death until toxicology tests are complete. Kasper's family and DuPage Medical Group have declined to comment.

Now, DuPage Medical is at a crossroads. Kasper's death came as the group, flush with a $1.45 billion infusion of cash from a private equity group, is poised to expand beyond Illinois and become a national presence.

"Our ultimate goal would be to become the pre-eminent national medical group," Kasper said in 2017.

It will have to do it without the energetic leader who joined DuPage in 2010 and helped transform the practice into the largest independent doctors' group in Illinois through strategic acquisitions and a culture that valued physician leadership and input.

"They're one of the main players here," said Scott Becker, a partner at law firm McGuireWoods and publisher of Becker's Hospital Review, a Chicago-based publication for hospital and health system leaders. In February, Becker spoke on a panel with Kasper about DuPage's success.

Kasper, who was not a doctor, and DuPage's other leaders had a "very clear focus to build a great physician group rather than be subsumed or bought by a hospital or health system," Becker said.

A DuPage Medical Group spokeswoman declined to make the system's leaders available for this article, saying, "We ask that you please respect our organization's privacy at this difficult time."

But the growth of DuPage has bucked a trend away from doctor-owned practices and toward hospital employment. It has offered an alternative for doctors who no longer can, or want, to run their own practices but aren't ready to join hospital systems either.

Doctors have been fleeing solo practice in recent years for a number of reasons. For one, small practices don't have the negotiating power of large hospital systems when it comes to setting rates with insurers, said Stacy Melvin, a director with consulting firm The Chartis Group. At the same time, practices face increasing costs for changes in billing and technology, among other things, she said.

"It's created this perfect storm where, financially, many providers, they can't go it alone anymore," Melvin said.

And it's these pressures that have helped spur the subtle but profound changes in the way medical care is delivered.

For the first time in U.S. history last year, the number of doctors employed by someone else outnumbered the number of doctors with ownership stakes in their practices, according to the American Medical Association. The number of self-employed doctors dropped 7 percentage points between 2012 and 2018, to nearly 46 percent.

Working for hospital systems, however, can come with its own set of challenges. Though hospital systems boast resources and promise continuity of care for patients, doctors in those settings sometimes complain of having to answer to nonphysician supervisors who don't understand or value what they do, pushing them to see high numbers of patients.

For some doctors, large, independent practices like DuPage have offered a sort of middle ground, Melvin said. A practice like DuPage has expertise and resources, but its clinical side is physician-owned, and it has a board composed entirely of doctors.

Kasper said in a 2017 interview with the Tribune that DuPage's doctors are "involved in the decision-making of the organization. We really leave a lot of autonomy within the physician practices."

That's what appealed to Dr. Parveen Naaz-Ikramuddin, a nephrologist who joined DuPage about three months ago, after being in solo practice for about eight years.

"It was getting more and more difficult," Naaz-Ikramuddin said of having her own practice. She said it was becoming increasingly challenging to get referrals, as other doctors joined hospital systems and referred their patients within those systems.

"Here I have more freedom as to what patients I see, how many patients I see, my schedule," she said. "I don't have to answer to nonphysicians who don't understand what the challenges are physicians are."

In recent years, DuPage has scooped up practices like Naaz-Ikramuddin's at a breakneck pace. DuPage added at least 80 new physicians in the last year alone -- and that was not an anomaly.

It can be tough to merge two physician practices into one, said Dr. Harold Picken, a principal in consulting firm Huron's health care business.

"The critical factor is, how many cultures do you have to merge and how different are they?" Picken said. "There are a lot of mergers that have just fallen apart."

The fact that DuPage has been acquiring so many practices each year shows it must have a process in place and has gotten pretty good at it, he said.

Private equity firms have taken notice.

DuPage has received cash from a number of private equity groups over the years -- and it 2017 it attracted a staggering $1.45 billion investment from Ares Management. Kasper said at the time that the money would allow DuPage to grow to 1,200 to 1,500 doctors over time and expand services such as imaging, immediate care, physical therapy and oncology.

Kasper said the medical group would remain totally physician-owned and directed, while Ares would acquire a stake in DuPage's management company DMG Practice Management Solutions.

Private equity's interest in DuPage is perhaps not surprising.

"We're seeing more and more private equity firms looking toward the health care arena," Melvin said. It makes sense, given how big a part of the economy health care is and the fact that it will likely only grow as baby boomers age, she said. There's also money to be made, particularly in services such as labs and imaging, both of which DuPage offers to patients.

That's not to say, however, that DuPage's rapid growth doesn't come without its own challenges. As they grow, even independent practices can face some of the same issues as other large groups within hospitals.

Dr. Mirjana McCarthy left DuPage about two years ago to run her own optometry practice in Clarendon Hills. She said she loved the work she did at DuPage and she worked with top-notch doctors there. But when the opportunity arose to purchase her own practice, closer to her home, she couldn't resist it, though it was a tough decision.

"It was sort of shifting and becoming more like a corporate environment," McCarthy said of DuPage. "The larger it got, the more it became about volume and numbers."

As independent medical groups grow, they can be successful by clearly defining roles within their organizations, having sound financial management and recognizing the importance of doctors as leaders, Melvin said.

"Physicians are not just employees, cogs in the wheel," Melvin said. "For organizations that are well run, physicians should be leading."

Successful organizations put the relationships between doctors and patients at the center of all their decisions, Picken said.

Kasper, who arrived at DuPage after years of running insurance plans, clearly cared deeply about patients and doctors, Picken said. Kasper told the Tribune in 2017 that he had always had a "passion for health care" and wanted to influence "how we take care of people."

Becker called Kasper an "unusually gifted and kind" leader, likening him to DuPage's first CEO, Darrell Stremler, who led the group from 1999 until 2005, when he also died at a young age, 45, of cancer.

"They became sort of a home for people who wanted to join a great practice," Becker said of DuPage, "but didn't necessarily want to be an employee of a health system."

lschencker@chicagotribune.com

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