Ellen Burkett, M.D., has been toiling for two years on a new way for loose groups of physicians to negotiate directly with health plans. But she admits that her system, called clinical integration, still has a way to go before it can be called a proven success.
Burkett is medical director of MedSouth, a 300-member independent practice association in Englewood, Colo., that made headlines in February 2002 as the first IPA to receive federal antitrust clearance to negotiate directly with health plans without accepting insurance risk.
As part of a clinically integrated system, MedSouth doctors have agreed to use a common set of clinical protocols and are sharing clinical information on an Internet-based computer network. The thinking goes that the presumed efficiencies and better outcomes at MedSouth would justify the higher rates that the IPA could leverage from health plans by negotiating as a single group.
But Burkett, who has been negotiating with eight plans, says MedSouth has yet to win higher rates from any of them.
"It's frustrating," says Burkett.
Before she sat down with the plans, Burkett spent one and a half years getting antitrust clearance from the Federal Trade Commission and ironing out kinks in the computer network with its developer, Mason, Ohio-based MedPlus, a Quest Diagnostics subsidiary.
"Quality is really low on the health plans' list of necessities," she says. "The big question is whether health plans are willing to pay for the performance."
Lisa Latts, M.D., regional medical director of Blue Cross and Blue Shield of Colorado, the state's largest commercial payer, says her company is interested in giving MedSouth some kind of increase, but it's a question of how much.
"We are looking to MedSouth to perform better than our physician group as a whole," Latts says. "But they are probably not there yet. We want to be sure we see outcomes."
IPAs are also on the fence. Though Burkett says she has received numerous calls from doctors about the system, officials at other Colorado IPAs say they are skeptical about taking the new approach.
"I think clinical integration is going to happen, but it isn't clear to me how it's going to happen," says Jay Want, M.D., president and CEO of Primary Physician Partners, one of the last Colorado IPAs taking insurance risk. "Will the practices introduce it or will the hospitals or someone else?"
Want says he is holding off because the FTC is granting clearance on a case-by-case basis and he is worried about the costs of the new computer network.
"Clinical integration is a very sticky wicket," concedes John Miles, a Washington, D.C., attorney who advised MedSouth. "The rules are unclear and they have a lot to do with your intent. Are you doing it just to increase your reimbursements?"
Still, MedPlus reports that the computer network is affordable-about $60 to $80 a month per physician, not including an Internet connection. Having worked out the bugs with MedSouth, the company began offering the product to other groups in March.
Several IPAs have shown interest in it, though perhaps not for a clinically integrated system, says Phil Present, COO of MedPlus.
Present acknowledges one drawback of the MedSouth system: The sources of its outside clinical data are limited. He says lab results can come only from Quest, though it is the largest lab in the Denver area, and text reports on radiological imaging come exclusively from the largest radiology group in the south Denver area.
Referring and specialist physicians in MedSouth also can use the secure computer system to send patient data back and forth, but they can't share data with physicians outside the network.
"Oftentimes physicians prefer broad networks at the expense of new developments," says Jim Hertel, editor of industry newsletter Colorado Managed Care. "They would rather continue with their existing broad range of information sources at the expense of having limitations in MedSouth."
How the network worksClinical integration. Some 300 doctors in an independent practice association have created common clinical protocols, including some HEDIS guidelines, and promise to use them.
Computer network. Plugged into an Internet-based computer network, these doctors can receive certain lab and radiology data and trade patient information with each other.
Provisional OK to negotiate. Usually, IPAs are allowed to directly negotiate with insurers only when they share insurance risk. But federal officials have provisionally approved MedSouth to do so, noting that it could lower costs and improve outcomes.
Negotiating with plans. MedSouth is still negotiating with health plans for higher rates that would reflect its presumed efficiencies.