Future of health care is moving towards more coordinated and appropriate care, shorter hospital stays and better care.

The subject of managed care is one that makes physicians and health care professionals very uncomfortable. The hard truth remains that deep public dissatisfaction with unfettered doctor and hospital autonomy led to the explosive growth of managed care. Managed care is driven by the harsh realities of foreign/international competition in trade, commerce, and industries. This is compounded by the necessity that our government must learn to live within its means. Unnerved by the rampant, double digit health care inflation of the late 80's and early 90's, business and government began the search for the "magic bullet" that would rid the economy of skyrocketing health care inflation. This is why they turned to the cost-controlling techniques of managed care.

As a result, many Americans are encountering a growing assortment of cost containing measures i.e. capitations, case managers, co-payment fees, formularies, gatekeeper physicians and utilization review. As you will notice, managed care plans provide higher quality care than any individual physician can offer. Managed care plans thoughtfully coordinate each patient's medical care, promote preventive medicine, and meticulously monitor quality.

We need to be looking at care for the whole population rather than just individuals. We need to be looking at care of patients over time rather than just isolated episodes. One of the toughest sells will be to convince patients that they need to give up their desire for maximum medical benefits to make possible "the greatest good for the greatest number of people". However in a nation founded on "life, liberty and the pursuit of happiness", this manifesto could prove an uphill battle indeed.

The laws of supply and demand don't apply to health care, because it's not a free market. There's supply induced demand, which means that the more physicians you have, the more health care gets provided. There is much waste and redundancy in a system that for years has allowed the purchaser and provider of health care to be essentially the same person, e.g. the physician.

Tomorrow's imperatives will be cooperation, collaborations and aligned incentives for the mutual benefit of patients, health care providers and the health plans. The idea of battling managed care is as archaic as the knight on horse back. We are physicians who have accepted full risk for our patients' medical management and are ready to be held accountable. We want to control the clinical side (e.g. providing clinical guide lines, utilization management and quality improvement) while the insurance companies control the business side (e.g. benefit design, administration, claim processing, eligibility, and membership services). The reality is that we do share the turf. Managed care is a permanent fixture on the American scene, so burying your head in the sand over managed care makes no sense.

As we embrace capitation, we embrace full risk relationships with the health plans. Managed care gives physicians an opportunity to have control of health delivery decisions in exchange for being fiscally responsible. By accepting the risk and fiscal responsibility of Managed Care, the group will be able to enjoy clinical independence and member physicians will have a major deciding role on what medical care is appropriate.

As the physician groups begin to share risks, the physicians become more sensitive to the patient relationship because service is going to be very important in retaining members and cutting costs. If one spends quality time listening to the issues raised by the patient, one can become much more proactive in managing chronic diseases and in practicing preventive medicine. This improves the quality of patients' lives while decreasing costs to the physician and the health plan.

All patients, from the cuddliest youngster to the toughest marine, appreciate kindness. Practices that offer kindness to their patients by making people feel special and cared for, even when struggling under the yoke of managed care, will help in keeping and generating new business. It is advantageous for one of your staff members to become a managed care expert who can answer patient questions about authorizations, co-payments, referrals, and out of network visits. We need to keep in touch with our patients during the process and be prepared to tell them what plans we have joined without having them navigate through the Bermuda Triangle.

Physicians can even cut their malpractice costs because creating a more patient centered environment with good rapport significantly reduces malpractice risk. Global Care helps the patients communicate better with their physicians by providing patient education lituratures for the physician to distribute. We have to let our patients know that they are partners in the relationship and as partners they are expected to do their part and play an active role in their health care.

Health care value is a function of quality divided by cost. The purchaser's preoccupation with cost is driven to some degree by a lack of positive information on quality. We must get a better handle on quality or we will leave cost as the only determinant value in a health care purchase. The nature of health care as a product will change, moving away from being a commodity (purchased based on price) to a differentiated product (purchased based on its price and quality). This means that the employers will purchase health care based on its true value. Outcome information when linked to reimbursement rates, can help insurers assess the quality and value of services provided to patients. Outcome information can help our physicians determine which treatments are best for our patients. The patient will also benefit because this information allows them to set realistic expectations for their own outcome and recovery.

There are several types of managed care organizations i.e. IPA.'s, Medical Groups, Physician Hospital Organizations (PHO), Integrated delivery systems, or IDS's (practices acquired by hospitals), Physician Practice Management companies (PPM), Foundation Models, and Staff Models.

We don't like P.H.O.'s/I.D.S.'s because the don't work. Hospitals have found it difficult to manage and integrate these practices and have been plagued by productivity slumps and high operating costs. They are formed for the wrong reasons, mainly to fill hospital beds rather than to keep patients healthy and costs down. In most cases, they are more of a ruse to collect physicians and put them under a hospital's thumb. Furthermore, the hospital administrators often are unaware of the cultural and operational differences between medical practices and hospitals.

Most PPM's are publicly traded companies who's ultimate accountability is the national corporate parent and wall street. They have an aggressive profit expectation to meet and they mostly generate enough margin to satisfy investors. The priority of public companies is to demonstrate balance sheet success, many of the operational systems offered by PPM's are fiscal rather than clinical. This is in direct conflict with what most physician organizations want, which is high quality and cost effective clinical operational systems. In this model, economy of scale has proven elusive, and financial capital has been frequently squandered on dubious acquisitions rather than investing in systems tailored to achieving efficiencies and improving health care.

Staff/Foundation models tends to have problems, as physicians who become employees generally become less productive because their own stake in the success of the organization is not as great. Physicians are most productive when they are autonomous but are held accountable.

The IPA model is the most popular and is growing the fastest. The IPA model has demonstrated how physicians can remain independent and yet have the competitive edge of a large group practice. Global Care physicians have come together as a virtual multispecialty organization integrated by a concern for quality care, as well as information systems that track patients and benchmark outcomes. The health care delivery system that could emerge in a given market place could be entities owned either by physicians, hospitals, or insurers. We obviously prefer physician owned entities because we know our patients best, our patients trust us, and we have their best interests at heart. But what will separate the men from the boys is quality, cost effectiveness and mutual trust.

The current trend in health care is that health plans are contracting with IPA's and large medical groups. In most cases they are not negotiating directly with solo practitioners. This is why you need to join an IPA because there is strength in numbers. We should not be afraid of change because we are capable of dealing with it. We have a heritage of change, we should be agents of change and we should be leading the change. We should take the bull by the horns, and control its direction and rate of change.

When the health plans' profit margins are low, they start merging to gain strength in the market place and to achieve economies of scale. But some physicians are frustrated with yet another ride on the corporate ownership merry go round. Health plans will look to mergers in an effort to achieve operating synergy and increased breadth of market coverage and increased enrollees satisfaction which is related to provider access.

Things are going to be rough and tough for the physicians/health care professionals in the the next five years before stabilization occurs. We need to stop fighting each other i.e. primary care vs. specialist. Physicians should be banding together. There are several factors that are working in our favor, such as understanding the patients and the local market or local health care resources. Health care, like politics, is local. Localness is a major advantage. That is one reason PPM's and Wall Street investors have failed in their attempts to standardize health care and create brand name identities like McDonald's. They didn't understand that the product is very difficult to standardize.

There is nothing like being there. My colleagues, things are not totally hopeless for us because we have options that need to be pursued immediately. Those of you who can turn your practices into an efficient managed care business by joining forces, reducing costs and taking on capitation contracts are more likely to be courted aggressively by managed care organizations such as Global Care and the health plans. Some doctors have rushed headfirst into selling their practices out of panic, fear of the unknown, and lack of understanding about how managed care will affect them. In the future hospitals and physicians will need to work together as equals to provide high quality care for our communities. In the past, negotiations with insurers and hospitals have typically left physicians down on the floor. There is no reason for that because one party should not be subservient to the other. We want a fair shake in it. But you have to be in a large group or IPA to have a shake. Your future will be good if you are willing to change now.

Quality is very important for us and we plan to win with this emphasis. Progress in health care comes from clinical systems but these systems need to be innovative and creative. It needs to move us toward better patient care. To do this requires motivation and ideas from doctors, nurses, and other health care professionals. To encourage high quality, we need a balance between physicians autonomy and doctor's accountability.

The most important reason people join a health plan is for the doctors. Only health plans with attractive doctors will attract people to join. The physician is and will remain center stage in the economics and the clinical outcomes of medicine. The health care industry revolves around the physician and this is why the physicians are our central focus at Global Care. Global Care is designed to keep the physicians happy and satisfied, while keeping the hassle factors down. This is why we say that Global Care makes managed care manageable.

The relationship between the Health Care Professionals, the Hospitals, and the Health plans is best described as a tripod stand, because they all need each other for survival. Physician owned groups should work with other providers, hospitals, and payers as equals and not as subordinates. Global Care's emphasis on high quality and cost effective health care for all should induce the health plans to give us more long term contracts with better capitation rates.

In the near future we plan to establish a specialty based medical advisory council to advise on quality and utilization related issues. Physician input into this advisory council will be welcomed, and it will report through the ranks of the company. We also plan to apply more intensive utilization management and effective case management strategies. The referral process will remain efficient but much less cumbersome. We have now successfully introduced the direct referral system and it is working well.

We have contracted with a group of hospitalists to manage other doctors' hospital patients at their request. This is more efficient because the hospitalist can see the patient as soon as he is admitted, order tests, have the results that afternoon, and perhaps discharge him/her a day sooner. They also have more time to sit and talk to the patients. The net result is expediting treatment, improving outcomes and shortening hospital stays.

Global Care IPA, utilizing Internet technologies, is creating a web site to facilitate physician communications e.g. real time access to recommended referral guidelines, care pathways and ancillary protocols at the site of care. This can serve as the glue that bonds Global Care physicians and allows us to coalesce and build a group culture. Global Care will also use data warehousing to uncover hidden opportunities. Global Care's web site address is globalcaremed.com.

We have completed arrangements with major university groups/institutions of higher learning for some secondary and tertiary coverage. This is designed to achieve operating synergy and increase patient satisfaction. There is a need to better balance disease prevention and treatment. At present, the scale is largely tilted in the direction of treatment and this should be corrected quickly. There is a need to end preventable disease complications.

An insufficient volume of patients is becoming a major problem for most physician practices and this becomes very serious, when coupled with inadequate reimbursement. This is an area of concern to most physicians due to our huge overhead. This might require a political solution at the state or federal level. It is a pragmatic fact that citizen lobbying is both necessary and rewarding. Our profession has to engage the political process, meaning that we should be proactive and appropriately reactive in the legislative and regulatory environment. Staying out of the fray will lead to nothing but situations over which physicians have no influence. We as physicians have to choose our battles and decide where to put our resources.

Conclusions

It is obvious to all that the future of health care is moving toward more coordinated and appropriate care, shorter hospital stays and better care. We as physicians need to position ourselves for this change. This means building true productive relationships with others who have a stake in the health care system. Real partnership, based on trust and commitment to high quality health care, will replace acquisitions as a strategic and operational model. It is up to us as physicians to partner with hospitals, payers and other relevant entities in terms of shared vision and health care integration for the benefit of our patients and the entire community.

I have some questions for you. Are you going to abdicate your role as the leaders in the health care field? Are you going to roll over dead or retire like some us have already done? We have an option staring at us. To go along kicking and screaming, doomed to accepting our fate at the end of the process and perhaps forever forfeiting our ability to take the leadership role. Or we have the option of becoming physician leaders at all levels of health care, willing to bring about dramatic and courageous changes in how we practice medicine. This means committing our best efforts in achieving marked measurable improvement in outcome and efficiency. This is top priority because it will provide value to our various communities.

As you can see, Global Care has established the best managed care organization in this geographic region. Global Care believes in reaching a reasonable size for maximum efficiency, in having true partnerships with others, in utilizing advanced information system infrastructure, and in defining clinical pathways and outcomes. We believe in working with other providers, hospitals and payers as equals, and not subordinates. Global Care is driven by vision, our mission is patient centered, and we have the infrastructure that supports quality. My dear colleagues, let's come together and ride this tidal wave of managed care to victory. Let us stand tall, work together and take back health care because it belongs to us. I am using this opportunity to invite you to join the winning team. Global Care is a winner.
 

N.A. ANAKWENZE M.D.
MEDICAL DIRECTOR