Not a big deal ... yet

"Healthcare could look like this.”

That's the trademarked slogan used on the website for the Greater Rochester Independent Practice Association. Some might argue that the slogan should be: “Healthcare could look like this—if only the Greater Rochester Independent Practice Association had some health plan contracts.”

GRIPA, an organization that includes 812 physicians and their affiliate hospitals: 494-bed Rochester (N.Y.) General Hospital and 83-bed Newark Wayne (N.Y.) Community Hospital, has been working for close to three years to take full advantage of its federal approval to operate as an independent practice association, an association of competing physicians seeking joint fee-for-service contracts with private payers.

In September 2007, GRIPA became only the second clinically integrated IPA to get a favorable advisory opinion from the Federal Trade Commission. At the time, the organization's business model was hailed by some as the wave of the future (Sept. 24, 2007, p. 14). But after almost three years, there are only two clients GRIPA can claim: the employees and dependents of the Rochester General Health System, of which the IPA is a part, and LiDestri Foods, a 700-employee manufacturer of sauces, dips and other private-label and brand-name products.

“There's no guarantee that when you build a better mousetrap that someone is going to buy it,” said David Narrow, an attorney in the healthcare division of the FTC Bureau of Competition.

The Rochester market is dominated by two payers—Excellus Blue Cross and Blue Shield and MVP Health Care—and some observers have blamed GRIPA's small client base on the payers dragging their feet. Eric Nielsen, GRIPA chief medical officer, doesn't necessarily disagree. “That's not wrong, payers have been dragging their feet,” Nielsen said, adding that executive turnover at Excellus has also slowed negotiations.

Excellus spokesman Jim Redmond, however, said leadership changes at GRIPA had a role. He said the biggest factors have been the recession and uncertainty over healthcare reform. “Excellus BCBS remains very interested in the model the GRIPA represents and we have been in dialogue with them for more than a year,” Redmond said in an e-mail. “The conversation did slow for a few months while the entire country awaited direction on national healthcare reform and more definition of the role of accountable care organizations. Now that a broader understanding is starting to emerge, we are speaking not only with GRIPA, but also with a number of interested groups of hospitals and physicians throughout upstate New York (our service territory) about how we can best support their development.”

Meanwhile, GRIPA's Nielsen said “a contract with MVP is off the table.” GRIPA is looking elsewhere now and has sought to “create diversity” in the market by recruiting three new Medicare Advantage plans to do business in the area and is looking to add more self-insured large employers, he said.

“We have several other contracts pending,” he said. “We had hoped to get employers to approach the payers and they said, ‘Why bother? Just go to us directly.' ” Nielsen said about 35% of the community's physicians are affiliated with GRIPA, but the IPA contract for clinical integration is nonexclusive so payers go around the organization and contract individually with its doctors.

GRIPA members use a secure, Health Insurance Portability and Accountability Act of 1996-compliant physician Web portal and database to share and store patient information—including clinical data from office visits and hospitalizations, laboratory results, and diagnostic imaging, Nielsen said. And, he said, that the database is then used to generate physician quality reports on preventive medicine and care management according to physician-created, evidence-based guidelines.

In theory and according to FTC belief, this approach will improve outcomes and lower costs, but Nielsen acknowledges their small client base has not yielded enough data to prove their case, which has also hindered GRIPA's growth. “If they insist on seeing outcomes data before the contract with us, it's a Catch-22,” he said. “But we don't have a lot of data, because we don't have a lot of members.”

In contrast, Oak Brook, Ill.-based Advocate Physician Partners, which is believed to be the largest clinically integrated IPA with some 3,400 doctors and eight hospitals, has five years of “value reports” posted on its website. According to the 2010 report, the clinical integration program's asthma outcomes initiative saved $16 million based on national cost averages and resulted in an estimated 37,920 days saved from absenteeism and lost productivity. The report also states that the organization's generic drug-prescribing initiative saves payers some $14.8 million annually.

Advocate Physician Partners has contracts with 10 payers in the market. Mark Shields, Advocate vice president for medical management, said the group has been encouraged by the FTC to talk about its program with providers and policy makers. Shields said that doctors are not allowed by the FTC to work together on setting prices for services—unless they are sharing financial risk or they are clinically integrated and working together to “add value to the marketplace” by increasing quality and lowering costs.