Take control of your relationships with MCOs
February 1, 1998 6 minutes read
Take control of your relationships with MCOs
Create partnerships to preserve autonomy
By Elizabeth Gallup, MD, JD, MBA
Executive Director
Community Health Partners
Overland Park, KS
It’s about time! That was my reaction when I picked up a Deloitte and Touche newsletter that focused on creating and sustaining value in the managed care industry. Not only is it about time that we providers are recognized for our influence, but it’s also time that we have exercised our influence enough to finally get noticed.
No longer are physicians at the mercy of managed care organizations. Some MCOs had all but forgotten that it is the physician who has the relationship with the patient and provides care for the patient. This was easy to forget in the days when patients would leave a long-standing relationship with a primary care physician if their employer provided them with an "option" of an HMO that would save them $120 per family member per year (thus the purported common wisdom that patients will change doctors to save $10 per month).
That may have been true in the days when there were relatively few HMOs and most physicians were not involved in managed care, but those times have passed. Now, most physicians are involved in managed care, and the common demand of employees to their employers is, "You choose an HMO that my doctor is in, otherwise I will be unhappy." Employers are heeding these demands now more then ever during this time of high competitiveness for employees. Employee retention is critical, and health care is a benefit second only to salary in importance.
Even this, however, might not be enough to make HMOs realize the value that physicians and other providers bring to the table. What we have done to get their attention, and thus have a profound impact on managed care plans, is to develop increasing sophistication and size to secure and manage the managed care contracts in other words, consolidating our practices within IPAs or large groups, partnering with hospitals forming PHOs, and joining with large physician practice management firms. These partnerships have assisted us in solidifying and enhancing our negotiating leverage.
This solidification, in turn, begets better contracts and ultimately more autonomy in the physician/patient relationship. More autonomy in the physician/patient relationship accompanied by educational tools for practice, such as practice guidelines, enhances our ability to deliver patient care that is not only more efficient but of higher quality. That way everyone wins first and foremost the patient, and secondly the physician, especially in terms of our satisfaction with our practice and the managed care entities because their medical loss ratios fall (and their profits rise).
Physician organizations that contract with MCOs must continue to forge ahead to create partnerships with organizations that promote our autonomy and our ability to care for patients. Only by organizing and contracting as a group, with common goals, initiatives, and systems, will we be able to make a sustainable difference.
For too long, we have been frustrated and watched helplessly as an MCO has failed to live up to its promises, developed its own clinical policies without our input, and built networks using physicians with questionable abilities and quality. The results, not surprisingly: a drop in patient satisfaction, physician satisfaction, and ultimately in the quality of patient care. Now, none of us are in a position to take some of these clinical and other functions back out of the hands of non-clinical administrators.
But joining forces doesn’t mean ganging up on MCOs. Rather, the successful physician contracting entity will sit down and determine how a partnership with the managed care organization can work. Physicians and physician-contracting entities generally are not insurance organizations, and MCOs are not clinical caregivers. Together, working in a close relationship, the two organizations can determine who will perform what function to manage a patient population.
Some physician entities are established and have developed their own credentialing, medical management, claims paying, and network development systems. Others are relatively new and unsophisticated and do not have any systems in place.
The remaining organizations are in the middle. Based on their own abilities, some physician organizations will desire a fully delegated services contract where their organization takes a percentage of the premium and manages all aspects of health care delivery. The function of the MCO in this case is marketing and insuring and not much else.
Other organizations want to take on more of the risk and management themselves, but do not have all their capabilities fully developed, in which case they could enter a partnership with the MCO. Together, they would decide what functions should be performed at the payer and at the physician level.
Typically, all physician organizations want to (and should) control medical management. The capitated reimbursement for services will rise or fall depending on how many functions the managed care and/or insurance organizations retain and how many and what functions the physician entity takes over.
Setting yourself up for unpleasant tasks
However, along with the advantages of this come the disadvantages. If it walks and talks like an MCO, it may become more of an MCO. In other words, when a physician organization takes on the functions of an MCO (such as medical management), it must take the headaches that go with it. For example, the physician organization conducting medical management will have to determine if a procedure or hospitalization meets medical necessity guidelines. This may mean turning down a peer’s request. The physicians can’t blame the MCO because the criteria established for medical necessity are their own.
The physician organization will have to be able to measure the cost and quality of services that doctors deliver; control hospital admissions and referrals to specialists; restrict choices of prescription drugs; develop their own networks; and determine bonus and incentive programs for delivering high-quality, cost-effective medical care. If any practitioner within the organization becomes disgruntled, the old adage "you only have yourself to blame" applies.
Most physician organizations welcome this new responsibility because it is only with this responsibility that autonomy can be returned. A physician participating in Doctors Health Inc., a Maryland-based physician organization, was quoted in the Washington Post as saying, "I kind of get the feeling that in the case of an insurance company, for example, they’re more just concerned with the bottom line. In the case of a physician organization, of which I am a member, I get the feeling that the guidelines and the feedback were developed by a group of my peers, and I have much more faith in them for that reason."
When physicians work together, it helps to get rid of the "us vs. them" phenomenon commonly found between physicians and the managed care or insurance organizations. Rather, it is a "we" mindset. It is much more difficult to ignore a peer’s counseling than it is a medical director’s counseling from the managed care organization over the phone from some faraway place.
In addition to the improved performance that peer review and counseling can engender, physician organizations facilitate the quality and efficient practice of medicine in other ways as well. Most individual physicians and physician groups are involved in myriad contracts with insurance companies. Each contract typically carries with it the managed care or insurance organization’s own formulary, practice guidelines and protocols, utilization management procedures, and networks. Because no one carrier accounts for a bulk of the physician’s practice, it is difficult if not impossible for the physician to keep up with the different procedures and protocols of each of the carriers. However, when the physician is part of an organization that contracts with multiple carriers and uses its own guidelines, protocols, etc., the physician can apply the uniform guidelines throughout his or her managed care patient population, without having to differentiate patients and their care based on who pays their bills.
In short, because we are organizing into groups, we are regaining some our lost abilities to control the care our patients receive. It is a true win-win situation for all parties; the patient, the physician, and the managed care or insurance organization.
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