Saturday, January 3, 2009

Innovations, organizational -Twelve Physician Organization Innovations.

Brian Klepper, a health care analyst and a frequent contributor to the Health Care Blog tells me I beat the practicing physician drum too much. By this he means I may pound too much on the need for doctors at the grass roots to organize to shape the health system and to meet the demands of health reform.

Brian is right. Simply being doctors is not enough. I believe doctors must exert and empower themselves. You can browbeat doctors and try to bring them to heel with mandated and exhortations on quality, outcomes , performance, and uniform practices throughout the U.S., but these efforts will more often than not come to naught if doctors do not buy into what you are advocating. Doctors are seeking organizational and working practice environments in which they feel comfortable, productive, and constructive.

For physicians to impact reform and to leverage their skills, they need organizations with reach and clout. Among other things, these organizations must make them indispensable to payers, consumers, and hospitals; be economically efficient, clinically effective, and sustainable; satisfy and empower physician cultures who may insist on a degree of autonomy; and be so situated they offer convenient access with predictable and affordable prices.

These characteristics are not easy to achieve and require physician leadership, or non-physician leaders who doctors trust. The structure of the organization or practice is also important and must be within the framework of existing laws and regulations.
Here are a dozen examples of innovative physician-based organizations and OWAs (Other Weird Arrangements) with requisite comfort levels for practicing doctors.

1. Medical Homes - This is the latest and hottest organizational development in many a season for many reasons – it may cut costs through coordinated and comprehensive care, it offers care across the care spectrum – office, home, between visits; it gives greater access to primary care, and it may be the salvation of beleaguered primary care practices through restructured payment schemes. Medical homes are a potentially huge innovation. Big business payers, all major national primary care organizations, Medicare, and many state legislators back them. Furthermore, medical homes provide an effective organizational structure for managing aging patients with 5 or move chronic diseases. These patients comprise nearly 25% of Medicare patients.

2. Hospital-based systems with owned primary care doctors, and, significantly, more employed specialists- This is probably the most prevalent model. It is commonly headquartered in hospitals with regional reputations, emergency departments, and other facilities, and it is on the rise because of the influx and ownership of primary care and specialty doctors seeking employment and relief from overwork, marginal practices with high overheads, and managed care hassles. A related phenomenon is that physicians with MBAs and MPHs and other business training increasingly lead these organizations.

3. Doctor-owned, clinic-based organizations, with salaried physicians - These entities, like the Carillon Clinic in Roanoke, Virginia, tend to follow the Mayo Model, with a large central clinic or hospital, owned surgical and imaging centers, salaried physicians, and satellite primary care clinics. They are effective because they dominate regional care, are often linked electronically, can measure outcomes and other quality measures, and have the wherewithal to negotiate favorable contracts with health plans. Because of most physicians’ desire for autonomy and distrust of the constraints of employment, I do not view this as the wave of the future.

4. Geographically Distributed Practices Under One Practice Embrella. There are several variations of this theme My favorite is ProHealth, Inc in central Connecticut. It consists of 200 or so primary care practices throughout the region with headquarters in Farmington, Connecticut. It has an executive director and committees that meet often to plan strategies, develop marketing campaigns, and assess needs of members. It has built laboratories, imaging facilities, and various diagnostic clinics. Another example are Big MACCs (Multispecialty Ambulatory Care Centers). This model tends to work in medically-underserved rapidly growing, retiree-attractive states, with temperate climates and recreational facilities. They are frequently located at the intersections of major highways. Ambulatory centers are served by multiple primary care doctors, specialists, pharmacies, physical therapy units, and other treatment or diagnostic facilities. Sometimes big MACCs are contracted and developed in conjunction with real estate firms.

5. Specialty hospitals and Surgicenters – There are over 3000 ambulatory surgical centers and roughly 100 specialty hospitals in the U.S. These are popular among physician-investors because of clinical control, autonomy, and good returns on investment, including facilities fees. Specialty hospitals, usually heart and orthopedic based, are more controversial because they compete with traditional hospitals and may lack 24 hour coverage. They tend to thrive in the Southwest, South, and West and less regulated regions with more conservative cultures.

6. Work-Site Clinics Or Groups Serving Worksites - Big and small businesses are anxious to cut expenses and attract and keep employees by having on-site convenient care, sometimes in conjunction with wellness programs. There are over 2000 corporate sites with over 1000 employees, sufficient critical mass to employ full-time primary care doctors. More than 30% of large corporations are considering or actively installing these clinics, and some are saving costs in the 30% range. Salaried primary care doctors, aided by EMRs with best practice information, and a support staff of nurses and nutritionists and others, manage these clinics.

7. Academic –Based Centers with Outlying Community Hospital and Clinical Feeders – A good example is Partners in Boston, rooted in Massachusetts General and Brigham and Womens’. With its brand name, affiliated hospitals, owned primary care doctors and clinics, and tertiary facilities, HealthPartners dominates Massachusetts health care. Costs are higher but so are health plan payments and public support. These systems are powerful and can negotiate higher payments than their contributors.

8. Hospitals with Bundled-Billing Arrangements with Hospitals and Medical Staffs – Medicare and other third parties are interested in dealing with hospitals that have bundled billing arrangements with medical staffs or networks of doctors. Bills can be submitted to one entity, and costs for some high ticket items - cardiac and orthopedic procedures – become predictable and less costly...

9. Social Networking Physician Organizations - These organizations, exemplified by and the Physicians Foundation, should be watched closely for they can serve as an organizing nisus, source of innovative ideas, and forums for social reforms and policy making changes. They are important because they understand the true workings and needs of physician cultures, at the individual practice and state and local society levels.

10. Innovative Delivery Practices with and without third party connections – These practices, though they do not receive much publicity at the national level, should be watched closely, for they appeal to the autonomy of physicians and their desire to spend more time with patients without third party monitoring or hassle. Patient satisfaction is high. Examples are concierge practices, practices that accept only cash payments, practices that offer deep discounts to the uninsured, practices that deal directly in one way or another with patients, micro-practices with small or no staff that rely on Internet-based services for support

11. Practices That Rely on Patients with HSA Accounts and High Deductible Plans for Payment - These practices are growing in number and have perhaps 15% of the employee market in some locales. They have power because premiums are lower, employers are very interested because they offer employer coverage at lower costs, use do preventive programs is higher, and employees become responsible because they are spending more of their own money and setting aside the rest for a rainy or retirement day.

12 Urgent care clinics or centers, in or near active retail centers, in deserted malls with empty real estate, or in places competing with retail clinics but staffed with doctors - This admittedly is a mixed bag, but so is care that appeals to workers seeking convenient care at off-hours, with predictable costs, in accessible locations. Somebody has observed that 50% of Americans live within 5 miles of a Walmart or a suburban or urban mall, and they are looking for services that do not entail going to an ER, a hospital, or a doctor’s office. One orthopedic practice in Orlando has responded to this demand by setting up clinics around town where sprains can be tended to, x-rays can be taken, and simple splints and casts applied. Retail clinics are fine, but they don’t have doctors on site that can do what often needs to be done. In present economic climate, retail estate owners are looking for medical clients to fill commodious spaces abandoned by failed retailers.


In any practical and workable health system, pragmatists have become accustomed to the reality that even if you can’t work with physicians you can’t work without them. The trick is to find a system in which payers, physicians, and patients feel comfortable, and which the organization framework does not exploit one and another and plays to the strengths of each party. For physicians the trick is to develop sustainable business models that deliver consistently high quality care.

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