Direct contracting: A return to the community

Doctor, community input critical

When Doctors Direct Healthcare took over the care for 6,000 covered lives of a local employer in January, it represented the culmination of nearly two years of work to create a community-based health care delivery package for self-funded employers in the Fayetteville, NC, area.

Doctors Direct Healthcare is a 50-50 joint venture between Sandhills Physicians Inc. — a physician organization of about 257 primary care and specialty physicians — and Cape Fear Valley Health System.

Other contract negotiations are in the works says Rita Graves, administrator. "Direct contracting is one of the most exciting pieces of our organization. I have been in health care long enough to see it transition from community-delivered health care to where there was very little involvement and physicians were driven by managed care. Doctors Direct Healthcare allows the decisions to come back into our community," she says.

Doctors Direct was created to contract with self-funded employers. There are 56,000 self-funded lives in Cumberland County, Graves says.

In the early stages of developing the direct contract model, a group of physicians met with members of the Fayetteville area’s plant managers’ association and asked what the employers wanted in the way of a health care delivery system.

Direct contracting plans are driven by the employers in some communities, but the Fayette-ville employers were not prepared to create such a product, Graves says. The employers told the physicians that they wanted a one-stop shopping opportunity that included both physician services and hospital services.

The physician’s committee, primarily from the executive committee of Sandhills Physicians, proposed the joint venture to the hospital administration and helped move it forward, Graves says. The Sandhills physicians spent long hours and were not paid for their time.

"It has to be something the physician believes in," she says.

A committee that included three physicians and Graves, and representatives from the hospital met every other week beginning July 1998. The committee hired an attorney to advise them on the procedures they should take.

Throughout the entire process, the physician team continued to meet with the local employer, showed them the proposed products, and asked for their advice.

Graves and Belinda Weaver, director of managed care/network development at the hospital developed, negotiated, and reviewed the contracts, with assistance from the law firm.

"Through it all, we involved the employers and local insurance brokers and got input and direction from them," Graves says.

Doctors Direct relies on locally based medical management including critical pathways to help ensure that patients receive quality care in a cost-effective manner.

"We made the decision to do our own medical management locally and hired an experienced nurse who lives in Cumberland County to guide it." Graves says. In addition, local primary care and specialty physicians participated by serving on medical management committees, clinical pathway committees, utilization management committees, quality management committees, and credentialing committees, she adds.

Physician input on guidelines

The utilization management guidelines were developed with direct input from physicians. "We had a lot of physician input on how policies were designed, and that has made a significant impact," Graves says.

Committees of physicians helped create 60 critical pathways. The physicians looked at the standard clinical pathways that were already on the market and adapted them for their special populations. "Not only did we create pathways specific to our patient population and our health care delivery system, but we gained a lot of knowledge and education from each other," Graves says. (See articles, pp. 44 and 45.)

Physician involvement is the key to creating a successful community-based health plan, she asserts.

"You have to have a huge amount of physician involvement. I’ve talked to a number of groups, and they’ve told me that physician involvement is the key piece," Graves says.