Pursue direct contracting before coalition forms

Physicians can seize initiative

Physicians in eastern South Carolina literally have taken their fate into their own hands rather than waiting for the business community to come to them. Their approach: meeting with CEOs of area businesses directly to discuss a potential partnership where physicians could play an active role. And that chutzpah has paid off. The group now is in negotiations for several direct contracts with area employers.

Communities where business coalitions have not yet taken root pose a perfect opportunity for physicians to seize the initiative, says John Simmons, MD, senior partner in the Spartanburg,SC-based health care consultant Millenium Health.

Simmons recently put together the physicians’ organization in South Carolina, and one of its first activities was to host a luncheon for all the chief executives from area businesses. "As a result, there are now negotiations for direct contracting with some of those businesses," he says. "The CEOs just had never sat down with the physicians before."

More often a CEO’s only one-on-one contact with a physician is in the doctor’s office. He or she may have waited for an hour to see the physician and may even have formed a negative opinion of the provider. That’s no way to build a relationship, says Simmons.

Another step he encourages a physician representative to take is to visit with CEOs and plant managers on their premises. "You tell them, ‘We want to know what you need from the health care system that you are not getting. What can we do together to solve your problem?’" says Simmons. "We have found the decision-makers at most businesses to be very receptive to that approach."

Employers’ relationships with their insurers are changing rapidly. "You see a lot of companies that will change their plan every year or every two years," says Simmons. Those are likely candidates for direct contracting.

The key to succeeding in direct contracting is to share your data with the businesses you contract with, Simmons says. Most business executives have no concept of what it costs to provide care. They know only what the insurance premiums are and what the providers‘ charges are.

When physicians share their cost data with businesses, executives get a clear understanding of what their anticipated costs are going to be. For the first time, they also understand what the risks of providing care are and how those risks are being mitigated.

At that point, they are in a much better position to evaluate whom they would like to assume the risk, says Simmons. "If they want the providers to take the risk, then I think the providers ought to jump on that opportunity. In exchange for managing the risk, any savings realized ought to be shared by business and providers, not with an insurance company," he says.