Larger practices coming, says new MGMA chief

High degree of organization urged

Medical practices must move away from being a cottage industry made up of solo practitioners with no back-up support and take a highly efficient, highly organized team approach to providing patient care, says the new chief executive officer of the Medical Group Management Association (MGMA) in Englewood, CO.

"I believe that all the forces are pushing physicians to group practice. The future of medical practice is in group practice," says William Jessee, MD, in a wide-ranging interview with Physician’s Managed Care Report.

On July 1, Jessee, an experienced association executive, took the reins of the MGMA and its two inter-related organizations, the American College of Medical Practice Executives and the Center for Research in Ambulatory Health Care Administration.

For the past three years, he has served as vice president for quality and managed care at the American Medical Association, leading the development and implementation of a new physician standards and accreditation program.

"I see the group practice getting larger in the future," Jessee says. "It may not, however, be the traditional large group model. It may be more of a virtual group where smaller practices are linked together for common purposes. But whether physicians merge into a large group practice or link with others to create virtual groups, they need size to negotiate deals and run the practice efficiently," he says.

Jessee suggests that physician offices link together to get a better deal when purchasing supplies, buying health coverage for employees, creating centralized billing systems, or to get bargaining leverage with managed care plans.

"The larger the group, the more economic clout it has," he adds.

Over the long haul, physicians in group practice also stay more clinically current because they can sit down and talk with their colleagues, Jessee says.

"Peer interaction helps you continue to be the best kind of doctor you possibly can be. Putting three brains together is always better than one," he says.

Following are Jessee’s answers to other questions from PMCR.

What plans do you have for the three MGMA organizations?

Jessee: My first plan is to get to know the organizations better. I am a firm believer in "ready" and "aim" before "fire." I plan to spend the first few weeks learning where the three organizations are now and what we need to do to get them where we want them to be.

Membership is my No. 1 priority. One of the strengths of any organization is its members. I stressed to the board that, even though the MGMA membership curve has been quite positive, we can’t become complacent. The way you keep your growth curve going up is to provide service to your members and give them a reason to be members.

Organizations shouldn’t try to get members just because they want more dues. Instead, they should look upon members as valuable assets. Each member has knowledge and insight to share with other members. An organization should act as a clearinghouse to pluck that good idea from one brain and share it with another. I look at each member as a very valuable asset.

How do you plan to increase membership?

Jessee: I want to focus on expanding student and faculty members. If you get them early on, they’re more likely to remain members. I also want to assure that the membership in MGMA is not only valuable to the practice administrators but also to the physicians. If you are a practice administrator and your physicians don’t find your membership valuable, they may be reluctant to pay membership dues. I want to make MGMA valuable not only to its members but also to the physicians for whom they work.

How will you make the MGMA more valuable to its members?

Jessee: We are going to be doing a lot of innovative things in terms of expanding our educational offerings. This will not necessarily be more programs, but will involve more innovative delivery mechanisms. Every association is seeing a drop in participation in educational programs. Travel costs are going up. We are going fairly aggressively into Internet-based education, expanding our CD-ROM programs, and similar activities.

We will be evaluating our own practices and making sure that we continue to be positioned as the most trusted resource for information about group practice.

We will establish a benchmarking series that will identify best practices in a variety of areas. For instance, how do you maximize patient satisfaction? How do you maximize productivity and minimize time-wasting? For every question, there is someone out there who has found a really great answer. One of our goals is to get the details and help our members learn what others are doing.

What should physicians do to position themselves to succeed in the next century?

Jessee: It gets back to benchmarking the best practices. Those are going to be the key. It is going to be a real challenge for physicians and practice administrators to find a way to make the practice as efficient as possible. But efficiency can’t be at the expense of quality and patient satisfaction. You can do both, but you need to be careful that you measure both.

Efficiency gives physicians more time

Today’s practices need behind-the-scenes efficiency, but not at the expense of the traditional warmth of the one-on-one physician-patient relationship. If you are more efficient in how your practice runs in terms of getting rid of wasted time and effort, you allow the physician to spend more time with patients who need more time.

MGMA’s members are key members of the practice team. The physician and a knowledgeable administrator are much more capable of dealing with today’s environment as a team than either is by themselves.

What do you think will happen with managed care in the future?

Jessee: Change is already taking place. Man aged care is mutating. Closed-panel HMOs are giving way to point-of-service products. What we are seeing is that there has been a highly visible public backlash against some of the more aggressive negative practices of managed care. Many plans are bending over backwards to clean up their acts. You still hear stories of abuse, but there is much less than even a year ago. At the same time, we hear a fair number of success stories of well-run managed care plans.

Managed care is making a favorable impact on the public health with its emphasis on preventative services. It’s what the AMA has said for years. It’s not managed care we’re against; it’s poorly managed care. Some poorly managed care has given way in the face of public backlash.

What will physicians have to do to continue to prosper under managed care in the future?

Jessee: It’s still a tough time for doctors. The bottom line is that everybody wants the best medical care possible as long as they don’t have to pay for it. Everywhere in the country, we hear of another round of premium increases. The for-profit insurers have to raise premiums to earn the profits Wall Street expects them to earn. If medical expenses are going up, the only way to increase profit is to lower reimbursement. They are squeezing doctors and hospitals to make their profits.

My bet is that sooner or later, people are going to come around to the idea that there are benefits in dealing with not-for-profit managed care companies as opposed to publicly owned managed care companies. That issue is starting to become more visible.

Physicians are going to have to continue to be more efficient. But they also are going to have to join together to be able to bargain more efficiently in order to maintain their economic position and the freedom to do what is best for their patients.

The topic of physician unions or bargaining groups for negotiating with managed care has been much in the news recently. What are your thoughts on the subject? (Editor’s note: This interview took place a few days before the AMA House of Delegates endorsed unions for doctors employed by medical groups, hospitals, and HMOs.)

Jessee: My personal feeling is that much of the clamor for unions is borne out of the frustration physicians feel. They are under more and more pressure. Their reimbursement is squeezed more and there is more regulatory paperwork and harsher enforcement. We hear stories of federal agents with drawn guns going into hospitals to seize records. It’s enough to make people nervous. I think physicians, particularly physicians in small groups or solo practices, are saying, "I’ve got to have some relief." They are reaching out for a union because they see it as a salvation.

It’s like trying to negotiate with General Motors about a car. As an individual, you don’t have the kind of leverage that Hertz does. They get a much better price. For most physicians, the same applies to looking to the union to give them the kind of leverage they need. What they really need, however, is more economic leverage, not necessarily a "union."

In my mind, the best vehicle physicians have for getting economic leverage is IPAs or group practices. IPAs, when they work well, are able to get much better deals than individual physicians or small groups. Short of striking, they can do virtually everything a union can do and are much more acceptable in the eyes of the public.

How can physicians cope with ethical issues that arise because of managed care?

Jessee: The only answer from the ethical point of view is to put the payer and the payment out of your mind and do what the patient needs. Where the ethical dilemma arises is if you allow yourself to make reimbursement a primary issue. Physicians should ask themselves why they went into this profession. It was to do the best they could to improve patient well-being. The problem we get into as a profession is that we argue for reimbursement on the grounds of patient need when it may be, "I think I deserve to get paid this." You are on much firmer moral ground if you do what the patients needs, then fight for reimbursement afterwards to adequately pay the cost and fairly compensate the physician.