January 16, 2009
With “bleak prospects on the horizon” for some primary care physicians, HealthSpring has formed a small group of independent physicians to make health care more efficient, less expensive and more profitable.
The Medicare Advantage plan’s local arm has formed Memphis Midtown Independent Physicians Association, which consists of nine primary care physicians and internists. These physicians create and adhere to similar practices and agree upon the same referring specialists. In doing so, a portion of the money they help HealthSpring save is given back to them.
“Primary care physicians are recognizing that there are very bleak prospects for them on the horizon,” says HealthSpring CEO Jon Buss. “They see that the path they’re on is heading in the wrong direction. Most of them are frustrated with it and don’t see a way out.”
Buss says as the independent physicians association ramps up, its primary care physicians can make 90%-100% more per patient than they would have by simply being reimbursed through Medicare. Participating specialists, he says, can expect 40%-60% more.
The national average for groups like HealthSpring to care for a Medicare patient is $750. So, if an IPA has 1,000 members, that translates to $750,000 monthly and then to $9 million annually to care for those patients. Medicare Advantage plans get to keep a Medicare-monitored portion of the unused funds. To save that surplus is the key to making the incentive program work, Buss says, but it doesn’t skimp on health care quality. He wants physicians to ask themselves how they would care for their own family members.
“Would you run these tests on your mother?” Buss asks. “If the answer is ‘yes,’ then run the test. It’s your money.”
Buss admits these small, independent networks have been around for a long time. But Jane DuBose, director of health plan analysis for Nashville-based HealthLeaders-InterStudy, says they’ve fallen out of favor with employers and patients.
“This is kind of a back to the future notion in managed care,” DuBose says. “Health plans more or less moved away from it, but now HealthSpring may be on the leading edge of returning to that sort of system.”
These tight networks were popular in the 1980s and 1990s. Patients wanted the freedom to see a wider array of physicians so health plans made their networks as large as they could.
“With all the cost pressure out there right now, (health plans) may be trying to get into more narrow network situations and have more exclusive relationships with providers again,” DuBose says.
The focus of every government-sponsored managed care organization is preventative care. Within the Medicare population, Buss says, an investment in preventative care sees quick returns. So, it is a major focus of the IPA.
“If you can get a diabetic controlling their sugar levels today that pays off immediately,” Buss says. “Those investments tend to have paybacks in a time frame that makes sense.”
But DuBose says the success of these groups will depend on the physicians in them.
“If patients don’t have to change their doctor, it’s fine,” she says. “It depends on who exactly is in that group of physicians and what relationships they might have had before.”
HealthSpring is in the process of organizing another IPA in South Memphis. The Medicare Advantage plan has the largest membership in West Tennessee with a December count of 6,800.
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