While the concept of physicians working collaboratively with insurers has long been considered an oxymoron, it actually is happening now, with participants on both sides claiming success. There even are physicians willing to say that such collaboration is the way of the future.
"You have to decide to either fight them or join them," says Thomas Hale, M.D., president of Unity Medical Group, St. Louis, in explaining why the 185 primary care providers in the group are participating in Alliance Blue Cross Blue Shield's Physician Group Partners Program. "We're beginning to understand that insurance companies as a finance mechanism have a place in the healthcare marketplace and are not going to go away. And providers who've tried to act as a financing mechanism have done poorly. It seems to us that the best way to get the most for everybody's patients is to work together."
Alliance has been a major player in the market for some time, with a 26% market share. "It's been a local company with local leadership and a local board that historically has been an integral part of patient care in our market. And over the years, Unity Medical Group has had as reasonable a relationship with them as providers and payers can have," Hale says.
To Sandra Van Trease, Alliance COO and executive senior vice president, the partnership program ensures that Alliance is facilitating patients' access to care and doctors' ability to deliver care. The idea behind the program is to give primary care doctors an opportunity to earn additional compensation from Alliance by improving patient satisfaction and their own performance levels using nationally recognized healthcare industry standards while also managing cost trends.
The partnership is based on a five-point philosophy:
- Physicians are the healthcare experts and are the key to managing healthcare services.
- Physicians manage healthcare more effectively and work most efficiently on behalf of members' needs in a group setting.
- Physicians provided with extensive data on a timely basis make better healthcare service decisions for their patients.
- Physicians, as the principal decisionmakers in providing healthcare services to Alliance members, are valuable players in achieving strong customer satisfaction.
- Physicians should be provided an opportunity to enter into a long-term, mutually advantageous relationship with Alliance.
Blue Cross took the initiative, Van Trease says, because "doctors deliver healthcare. They interact with our members day in and day out, and it's important that we work together in a collaborative environment. We do all we can to ensure that we have networks in place, but we know we don't provide healthcare and they do. The stronger the relationship we have with the physician community, the better off we all are."
If the physicians in a group do well in meeting their patient satisfaction and HEDIS targets, they get bonuses, and they receive additional compensation if they've managed resources better than their budget.
"There's no downside risk for the doctors," Van Trease says.
The first physician group was enrolled in 1997 and there now are 10 groups, including Unity, with some 575 physicians and almost 30,000 Alliance enrollees in St. Louis and central Missouri.
Van Trease says the model works across groups of all sizes and is available to all practice groups regardless of size.
Results reported by Alliance earlier this year showed that the Partnership participants held their medical cost increase to approximately half of what the nonpartnership BlueCHOICE commercial network experienced in the same 33-month period. Van Trease says there has been measurable improvement in patient satisfaction and HEDIS indicators for childhood immunizations and diabetic examinations, the first two indicators chosen for a quality score. In the first six practice reconciliations, she says, all six met their patient satisfaction and HEDIS indicator targets and received bonuses. And five of the six received an additional gainsharing payment because they stayed within their budget.
(Gainsharing payments are available only to practices that earn both patient satisfaction and quality indicator bonuses. Van Trease says the plan will not reward a practice that succeeds only in meeting its economic target.)
Hale says Alliance took the right approach in aligning physician incentives: not to withhold care but to reward a good job. "A physician isn't penalized for not doing a good job; he or she just gets the same as all the others. It's important to have a system that isn't seen as punitive."
While there have been some difficulties in implementing the program because of incompatible data systems, over time "it has grown and matured into a better product," Hale says.
Incentives for specialists are being developed and the information systems and physician feedback have been improved. "If we continue to work together in the same kind of relationship, I see a real possibility for elevating care."
The patient satisfaction bonus is based on a survey that covers typical satisfaction issues such as waiting to be seen in the physician's office, courteousness of the staff, patient understanding of what has been explained about the patient's disease or condition and treatment options. The quality bonus is based on HEDIS indicators. In each instance, the practice and the plan jointly negotiate an agreement on scores that must be earned for bonuses to be paid.
Likewise, for the gainsharing payment, the practice and plan agree on budget targets that must be met. Van Trease says the plan provides considerable statistical data throughout the year to help practices see how they are doing and where they may need to improve.
Meanwhile, outside of Philadelphia, where physicians and insurers historically have had a noisy and contentious relationship, a physician organization has signed an unusual contract with Independence Blue Cross, creating a joint venture to take over medical management for the plan's Keystone Health Plan East enrollees whose primary care physicians are associated with the physician group.
Renaissance Health Alliance, the new company, plans to cut costs by working with member doctors to improve their practice patterns, using in-depth data reports and analysis provided by Valence Health, a Chicago-based consulting firm.
They were moving toward accepting risk and looking for a way to do it without having the necessary cash reserves. The answer was to partner with an insurer, with the insurer continuing many of its traditional roles but delegating accountability for quality to its partner. The doctors own half of RHA because their management company put up $500,000, matched by IBC's $500,000 to get it started.
Renaissance CEO Anthony Coletta, M.D., a general surgeon who founded Renaissance Medical Management Co., the firm that partnered with IBC in creating Renaissance Health Alliance, says they will use a three-pronged approach of knowledge, peer review and incentives to make the risk arrangement work. "We'll use the provider reports to educate the network physicians, have practicing physicians acting as part-time regional medical directors to work with physicians in their region, and then have economic incentives for those whose performance meets goals."
Robert Parsons, M.D., a pediatrician who is Renaissance's first regional medical director, says that regional care groups will meet monthly to go over the Valence report findings and develop plans to address practice problems that are uncovered. "The doctors were very receptive" at the first round of meetings, he says. "This is different than before when we were members of U.S. Healthcare or Keystone but didn't have the kind of vested interest we have now. Now all the money is coming from our company, so there's more reason to pay attention."
Renaissance expects to pay particular attention to disease management protocols and quality of life programs for the sickest patients, who typically have the highest charges. The payoff comes when Renaissance meets its economic targets.
The agreement with IBC provides that all profits will be shared 50-50. From its half of any profits, Renaissance intends to make incentive payments to physicians based on performance.
Risk pools are to be established for hospital services, professional services, and ancillary services (including pharmacy) for each risk contract for both commercial and Medicare patients. Surplus allocations to member physicians will be determined by the company's performance relative to budget within each of the pools. Criteria for performance incentives include clinical efficiency, clinical quality, patient satisfaction, participation in Renaissance meetings and other factors.
Coletta says additional primary care doctors will be added and the geographic service area will be expanded over the next few years. He expects it will take two to three years to determine whether the model will work, but for now he says he's confident they are on the right track to having physicians manage themselves for higher quality, cost-effective care.
John G. Hope is based in Harrisburg, Pa., and is a frequent contributor to Modern Physician.