Twelve Physician Organizational Innovations

To impact reform and to leverage their skills, physicians need organizations with appeal, reach, and clout.

Among other things, these organizations must make themselves indispensable to payers, consumers, and hospitals; they must be economically efficient, clinically effective, and sustainable; they must satisfy and empower physician cultures who may insist on a degree of autonomy; and they must be situated so they offer convenient access with predictable and affordable prices.

These characteristics are not easy to achieve and require physician leadership, or non-physician leaders who doctors trust. The structure of the organization or practice is also important and must operate within the framework of existing laws and regulations. By 2015, the IBM Center for Healthcare Management foresees four functional generic models for physicians:

• Community health networks offering access across a defined geography: This is the environment in which most physicians practice.
• Centers of excellence, emphasizing quality and safety: These are usually academic or hospital-based health systems experienced in treating or evaluating major high ticket disorders. Medical concierges: These are generally small private practices focusing on patient-centered care with more time spent with patients and more assiduous attention to patient needs.
• Price leaders: These are practices, organizations, or new business models stressing productivity, greater patient throughput, and greater and more predictable economic and clinical value for consumers.

Here are a dozen specific examples of innovative physician-based organizations that fall into these categories.

1. Medical homes. This is the latest and hottest organizational development for many reasons. Medical homes may cut costs through coordinated and comprehensive care, they offer care across the care spectrum—office, home, between visits—and provide greater access to primary care. The model may be the salvation of beleaguered primary care practices through restructured payment schemes, which may be a mix of fee-for-service, capitated fees for managing panels of patients, and bonuses for patient responsive services (same day appointments and prompt responses to emails and phone calls).

Medical homes are a potentially huge innovation. Big business payers, all major national primary care organizations, CMS, and many state legislators back them. Furthermore, medical homes provide an organizational structure for managing aging patients with five or move chronic diseases. These patients comprise nearly 25% of Medicare patients.

2. Hospital-based systems with owned and salaried primary care doctors, and, significantly, more employed specialists. This is probably the most prevalent model. It is commonly headquartered in hospitals with regional reputations, emergency departments, and other facilities, and it is on the rise because of the influx and ownership of primary care and specialty doctors seeking employment and relief from overwork, marginal practices with high overheads, and managed care hassles. Hospitalists are the common form of hospital employment for primary care physicians. A related phenomenon is that physicians with MBAs and MPHs and other business training increasingly lead these organizations to gain the trust of employed physicians.

3. Doctor-owned, clinic-based organizations, with salaried physicians. These entities, like the Carillon Clinic in Roanoke, Virginia, tend to follow the Mayo Model, with a large central clinic or hospital, owned surgical and imaging centers, salaried physicians, and satellite primary care clinics. They are effective because they dominate regional care, are often linked electronically, can measure outcomes and other quality measures, and have the wherewithal to negotiate favorable contracts with health plans. Because of most physicians' desire for autonomy and distrust of employment constraints, this model isn't likely to be the wave of the future.

4. Geographically distributed practices under one practice umbrella. There are several variations of this theme. My favorite is ProHealth, Inc., in central Connecticut. It consists of 235 primary care providers throughout the region with headquarters in Farmington, CT. It has an executive director and committees that meet often to plan strategies, develop marketing campaigns, and assess needs of members. It has built laboratories, imaging facilities, and various diagnostic clinics. Big Multispecialty Ambulatory Care Centers (Big MACCs) offer another example. This model tends to work in medically-underserved rapidly growing, retiree-attractive states, with temperate climates and recreational facilities. They are frequently located at the intersections of major highways. Ambulatory centers are served by multiple primary care doctors, specialists, pharmacies, physical therapy units, and other treatment or diagnostic facilities. Sometimes big MACCs are contracted and developed in conjunction with real estate firms.

5. Specialty hospitals and surgicenters. There are over 3,000 ambulatory surgical centers and roughly 100 specialty hospitals in the U.S. These are popular among physician-investors because of clinical control and efficiencies, autonomy, and good returns on investment, including facilities fees. Specialty hospitals, usually heart, orthopedic, or ophthalmological based, are more controversial because they compete with traditional hospitals and may lack 24-hour coverage. Democrats in Congress, particularly Pete Stark of California, oppose this model.

6. Work-site clinics. Big and small businesses are anxious to cut expenses and attract and keep employees by having on-site convenient care, sometimes in conjunction with wellness programs. There are over 2,000 corporate sites with over 1,000 employees, sufficient critical mass to employ full-time primary care doctors. More than 30% of large corporations, including Toyota and Pitney Bowes, are considering or actively installing these clinics, and some are saving costs in the 30% range. Salaried primary care doctors, aided by EMRs with best practice information, and a support staff of nurses and nutritionists and others, manage these clinics.

7. Academic-based centers with outlying community hospital and clinical feeders. A good example is Partners in Boston, rooted in Massachusetts General and Brigham and Women's. With its brand name, affiliated hospitals, owned primary care doctors and clinics, and tertiary facilities, Partners dominates Massachusetts healthcare. Costs are higher but so are health plan payments and public support. These systems are powerful and can negotiate higher payments than their contributors.

8. Hospitals with bundled-billing arrangements with medical staffs. Medicare and other third parties are interested in dealing with hospitals that have bundled billing arrangements with medical staffs or networks of doctors. Bills can be submitted to one entity, and costs for some high ticket items—cardiac and orthopedic procedures—become predictable, less costly, and more manageable.

9. Social networking physician organizations. These organizations, exemplified by Sermo.com and the Physicians Foundation, should be watched closely for they can serve as an organizing nisus, source of innovative ideas, and forums for social reforms and policy making changes. They are important because they understand the true workings and needs of physician cultures, at the individual practice and state and local society levels. They do not employ physicians, but serve as trusted source of innovative ideas for empowering physicians.

10. Innovative delivery practices with and without third party connections. These practices, though they do not receive much publicity at the national level, should be watched closely, for they appeal to physicians' desires for autonomy and more time to with patients without third-party monitoring or hassles. Patient satisfaction is high. Examples are concierge practices, practices that accept only cash payments, practices that offer deep discounts to the uninsured, practices that deal directly in one way or another with patients, and micro-practices with small or no staff that rely on Internet-based services for support.

11. Practices relying on patients with HSA accounts and high deductible plans for payment. These practices are growing in number and have captured perhaps 15% of the employee market in some locales. They have power because premiums are lower, employers are very interested because they offer employer coverage at lower costs, use of preventive programs is higher, and employees become responsible because they are spending more of their own money and setting aside the rest for a rainy day or retirement. Liberal critics and policy wonks criticize HSAs and high-deductable plans as being only for the wealthy and not suitable for those with chronic disease.

12. Urgent care clinics or centers. Specifically, clinics in or near active retail centers, in deserted malls with empty real estate, or in places competing with retail clinics but staffed with doctors. This, admittedly, is a mixed bag, but so is care that appeals to workers seeking convenient care at off-hours, with predictable costs, in accessible locations. A large portion of Americans live within five miles of a Walmart or a suburban or urban mall, and they are looking for services that do not entail going to an ER, a hospital, or a doctor's office.

One orthopedic practice in Orlando has responded to this demand by setting up clinics around town where sprains can be tended to, x-rays can be taken, and simple splints and casts applied. Retail clinics are fine, but they don't have doctors on site that can do what often needs to be done. Doctors are responding by organizing clinics with physicians, x-rays, and lab facilities on site. In the present economic climate, retail estate owners are looking for medical clients to fill commodious spaces abandoned by failed retailers.

Conclusion
In any practical and workable health system, pragmatists have become accustomed to the reality that even if you can't work with physicians you can't work without them. The trick is to find a system in which payers, physicians, and patients feel comfortable, and which the organization framework does not exploit one and another and plays to the strengths of each party. For physicians, the trick is to develop sustainable business models that deliver consistently high quality care.

Simply being a doctor in today's practice environment is not enough. Doctors must exert and empower themselves through organizations. You can browbeat doctors and try to bring them to heel with mandates on quality, outcomes, performance, and uniform practices, but these efforts will more often than not come to naught if doctors do not buy into these concepts at the organizational level. Doctors are seeking organizational and working practice environments in which they feel comfortable, productive, and constructive.