Managed Care - July 2008 - (Page 22) lenging in others — for the insurers who contract When it comes to contract negotiations, the with the consolidated groups. physician/hospital model offers advantages and From a patient care perspective, integrated prodisadvantages for health plans. On one hand, it vider systems have much to offer, says Craig Samitt, means fewer contracts to negotiate and manage. MD, president and CEO of Dean Health System in “Health plans are more than willing, sometimes Madison, Wis. A fully integrated organization even happy, to work with organized groups that can owned primarily by physicians, Dean Health inadd value,” says Peter Kongstvedt, MD, an Accencludes a health plan that covers 265,000 people. ture consultant to health plans. “But there’s no “If I’m a health plan, no matter what, I doubt that hospitals and health systems want hospitals and physicians working tothat have achieved a regional hegemony are gether. The care should be higher quality, in a very strong negotiation position and more coordinated, and more efficient,” he are frequently able to extract significant says. “I would argue that a major ‘pro’ to increases.” health plans of hospital and physicians Indeed, some physicians enjoy big fiworking together is producing a better nancial benefits from joining a large multihealth care product.” specialty group or a hospital staff simply to For one thing, hospitals are much more be part of a better managed care contract, likely than individual physicians to invest in McCartie says. the electronic medical record technology. “The physicians that join the larger inPhysicians who Most payers and policymakers believe that keep the Marcus stitution may see a 20- to 30-percent inEMR use is essential if the health care sys- Welby model of come rise because of the negotiated rates of tem is to become efficient. that larger group, even though they don’t health care will be reFor example, most of the 150 employed tired in the next five get any money from selling their practice,” years, says Perry Han- he says. physicians working at 55 clinics owned by CoxHealth, a regional system in Spring- son, a partner at Samitt, who oversees a regional health Wipfli, a Minnesota field, Mo., use its EMR system. When a drug consultancy. plan, thinks that, in general, insurance exwas recalled this spring, patients were noecutives worry that greater hospital-physitified without their individual physicians cian integration means a more difficult barbeing involved. gaining position, or that health plans could find “Within 15 minutes, we can tell you how many themselves on the outside entirely. hundreds of patients had that drug and, within a “The larger that health systems grow — the more day or two, we can have a letter in their hands anthat hospitals come together and physicians join nouncing that recall,” says David Taylor, Coxhospitals and so on — the more it increases the posHealth’s vice president for regional services. sibility that those integrated systems could create Besides technology, the common ownership of their own health plan,” he says. integrated systems offers opportunity for more co“While I think it is imperative for health care to ordinated patient care, which many payers congo toward integration, some health plans probably sider to be a key to achieving better outcomes at view that as a threat.” lower costs. Insurers also like the “one-stop shopping” adMotivating factors vantage of negotiating a contract with a full specAs with most business consolidations, money trum of physicians, says Jaan Sidorov, MD, a health drives physician-hospital integration. McCartie plan consultant based in Harrisburg, Pa. That says many physicians are making less money, relaavoids the problem of holes in the network stemtive to other professions, than they did 15 or 20 ming from a physician who refuses to sign a years ago. contract. “The economic climate for many medical pracBut it is also “far more difficult for an individual tices has become so hostile that the owners are physician to refuse to participate in a network,” he looking for a way of getting out from under the buradds. den of running their practice,” Jessee says. “They’re 22 MANAGED CARE / JULY 2008
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