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Value Added: Up close and personal with a gastroenterologist

Gastroenterologist Robert Hardi, 62, sees 4,000 to 5,000 patients a year.
Gastroenterologist Robert Hardi, 62, sees 4,000 to 5,000 patients a year. (Mark Gail/the Washington Post)
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Then came the publicity. Presidents Ronald Reagan and Bill Clinton and newscaster Katie Couric underwent high-profile procedures. So did athletes, movie stars and other celebrities. People began racing to gastroenterologists for screenings.

"That created a big demand for my business," said Hardi, who went from doing 300 to 400 colonoscopies a year to about 1,000.

With demand for colonoscopies increasing, Hardi and 13 other gastroenterologists decided in January 1996 to join Metropolitan Gastroenterology Group (MGG), the biggest practice of its kind in Washington.

"Every one of us had very good practices," Hardi said. "One partner gave the first colonoscopy in Washington. One ran a malpractice insurance company. I am certified in clinical research. We are a group of different talents."

Partnering accomplished several things: they could pool resources to purchase and make more efficient use of the expensive equipment and state-of-the-art rooms necessary for the procedures. They would save on rent and staff. And with three different offices in the District and Maryland, MGG could do a greater number of procedures, lowering the average cost of a colonoscopy and making it worthwhile to take lower-cost patients.

They agreed on something else, too.

"We would take anyone," Hardi said.

He said MGG grosses between $8 million and $10 million a year. He won't tell me what he earns, but he points out that the "average GE" in this area makes between $300,000 to $500,000 a year. He fields 4,000 to 5,000 patient visits a year and performs between 1,000 and 1,300 procedures.

Hardi performs procedures four days a week at two different endocenters, which are 49 percent owned by MGG and 51 percent owned by another medical company, AmSurg. Revenues and costs are shared proportionately, and the arrangement helps MGG afford the upfront costs of $50,000 to outfit a colonoscopy room.

Hardi sees patients at his offices in Chevy Chase and on K Street and takes four to six weeks of vacation a year. He estimates he has done 20,000 colonoscopies and 10,000-plus endoscopies in 25 years. He collects between $250 to $400 for each procedure, not including fees for any office visits. My colonoscopies generally cost around $800, which includes Hardi's fee, a "facility fee" and a bunch of other little stuff .

Ever the entrepreneur, Hardi augments his income with other revenue-generating activities. He heads MGG's clinical research group, which finds patients to participate in tests for drug and medical instrument companies. That can add well over $100,000 to his income in a good year. He charges between $300 to $400 an hour for sessions with Wall Street investors who want to know the latest science.

At the beginning of this year, the MGG practice combined with 40 other gastroenterologists in the region to form Capital Digestive Care, which collects bills, does the accounting, handles paperwork and prescriptions, and even runs a lab where the tests from the colonoscopies and upper endoscopies are sent.

Payroll and overhead eat up 60 percent of MGG's revenues, including the 6 percent spent just to collect money from insurance companies, Medicare and individuals. Hardi pays $45,000 a year for his own medical malpractice insurance.

I asked Hardi if the fact that MGG owned its own labs (from which they earn a profit) and the fact that it is in partnership with AmSurg, which expects a return on its investment, skewed the incentives over giving a patient the best treatment at the best price.

"The business alone doesn't drive this," he said. "What drives this is doctors. I still like looking at patients and figuring out what's wrong with them."

It doesn't hurt, either.

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