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Healthcare Reform Puts Vise Grips on Physicians

Jacqueline Fellows, for HealthLeaders Media, April 17, 2014

"I think we were lucky here somewhat because of the culture that existed at the Fallon Clinic," Ernst says. "It has a long history of managed care, so it was not a new concept that had to be sold to leadership, administration, and physicians, which certainly helped. But, I don't want to underestimate how difficult this can be if you start out from scratch. I think it's extremely difficult."

In addition to Reliant's cultural comfort with APM models, the medical group has a robust electronic health record system that supports a patient portal to schedule appointments, view lab results, email physicians, and even can support e-visits for patients 18 years old and up. The portal is a "big patient satisfier," according to Munk, especially for the younger patients who communicate digitally.

Reliant's $24 million investment in its Epic EHR system, which is maintained by two dozen full-time employees, took years to customize, but has paid off. The medical group received a Stage 7 Ambulatory Award from HIMSS Analytics, its highest designation, which recognizes an organization for having achieved all the steps necessary for a paperless environment.

Munk says such investments benefit all of Reliant's patients, regardless of the reimbursement method.

"We've built our infrastructure to support risk, which means that our FFS patients benefit from many of the same initiatives that our capitated patients benefit from," he says. "For example, we know that giving flu shots only saves us money down the road; we have an excellent flu shot delivery rate, but our FFS patients receive them at the same rate as our capitated patients."

Still, Ernst is counting on getting more patients covered by risk-based contracts. Increasing the population of patients who are considered fully at risk is a key to Reliant's financial bet on leaving FFS behind for good.

"If you are FFS, you can get away with, say, 100 patients, and you just see them 100 times a year and get paid 100 times," he explains. "That doesn't work anymore under this model so it really has to be the number of covered lives—that is the new currency against which our success is being measured. And that, I think, is foundationally different."

Embracing independent physicians

Reliant is not alone in seeking new types of relationships with payers to support the need for a more viable post-FFS reimbursement model.

San Francisco–based Dignity Health, a 21-state network of 39 acute care centers, including hospitals, primary care and urgent care clinics, and 56,000 employees, launched a physician alignment effort in 2011 that gives independent physicians who work with Dignity hospitals an opportunity to collectively negotiate with payers to not only get better rates, but also to participate in APM models that include shared savings. It's called clinical integration, and while it's in an early phase of development, Dignity has five CI networks operating in the three states where it operates acute care hospitals: California, Arizona, and Nevada.

Robert Lerman, MD, vice president and medical director for physician integration at Dignity, shares Ernst's ideas on the stress that physicians are operating under in the current environment.

"It's a very difficult time to be a physician," says Lerman. "Doctors are facing reduced reimbursement; they have regulatory requirements, increased costs to run a practice. And these pressures really sort of mirror some of the same things the hospitals are going through with value-based purchasing, penalties for readmissions, and shrinking margins for Medicare."

Instead of trying to solve the problems inside the walls of the hospital, Lerman says Dignity saw an opportunity to collaborate with the 9,000 physicians who work with its hospitals. Dignity has a distinctive relationship with physicians: Only 10% are employed by the health system. The rest are independents, many of whom, Lerman says, are confused and scared about their future.

"A lot of our physicians really do want to stay independent, but they want and need help in order to be successful in the new healthcare environment."

The physician-led Dignity Health CI programs provide a support network to those independent physicians. If they join one of Dignity's CI networks, they get access to tools and staff they otherwise might not be able to afford. For example, in concert with developing the CI networks, Dignity also is creating a healthcare management program that includes social workers, nurse coordinators, and pharmacists working with physicians and their practices to develop team-based care protocols that are found in PCMHs. In fact, Lerman says, Dignity is beginning a major initiative this year to bring as many PCMH elements into physician practices as possible.

"We don't look at the PCMH and CI network models as being mutually exclusive at all," he says. "We are making major investments in population health management information technology that we'll offer to our physician practices to allow them to have things they don't have or couldn't afford, like software that will facilitate communication with care management teams."

There is no membership fee or cost to physicians to join the CI network, but they are expected to play a significant role in building the network to include primary care physicians and specialists. In fact, every aspect of a CI network is physician-led and physician-governed.

Each network has a board of managers that is composed of both primary care physicians and specialists. The individual networks also have a quality committee, which works with the group to develop metrics and standards. Lerman says that, on average, there are 100 quality measures for each CI network.

"The quality committee gets together and they go through every single medical specialty," he says. "They talk to their peers, they develop potential quality metrics that might be utilized, and they select between five and 10 metrics per specialty, and that's how you get to about 100 for each organization."

Lerman says Dignity also recognizes that to attract physicians to the CI network, the metrics have to be reflective of the physicians' community. Likewise, to attract health plans to the CI networks, he says, the organization strives for standardization, as well. To achieve balance between the two sets of standards, Dignity created, with the help of physicians, a menu of 160 quality- and cost-related measures.

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