Louisiana practice takes control of its future
Louisiana practice takes control of its future
Three-pronged strategy helps group expand
Affiliating with a physician practice management company isn’t the answer for everyone. One suburban New Orleans practice that chose to remain independent due to self-admitted control issues has flourished on its own.The strategy of Metairie, LA, practice Browne-McHardy Clinic, according to chief administrative officer Robert Goldstein:
• Form collaborative arrangements with other provider partners.
• Build bargaining capability by increasing size.
• Earn revenue by exporting management expertise to smaller practices.
Browne-McHardy is a 50-physician multispecialty clinic with about 50% of its business in capitation, Goldstein says. Through relationships the clinic has established with other practices, the clinic’s larger network encompasses more than 500 physicians.
Goldstein says the practice’s strategy has been successful, although he hedges by saying it’s hard to know what would have happened if Browne-McHardy hadn’t implemented its current strategic plan. Goldstein’s definition of success: The practice has maintained its contractual relationships with managed care payers, it has increased its negotiating ability in these contracts, and it is expanding its reach through relationships with physician practices in surrounding counties and even surrounding states.
Although Goldstein declined to disclose specific contract provisions that he has been able to negotiate as a result of the practice’s strategic plan, he says Brown-McHardy’s strategy has helped it get more advantageous contract terms from managed care organizations. "The philosophy we’ve used is that we want to remain independent," Goldstein says. "We’ve struggled with that desire over the last five years, and we also know that many other physicians want to remain independent. Through collaboration and by utilizing services we have to offer, we still are able to attract and administer good contracts at good rates."
Browne-McHardy’s strategic plan includes a three-pronged growth strategy (see strategy chart above):
1. Building a relationship with a nearby hospital partner. The practice formed a 50-50 joint venture through a limited liability corporation with East Jefferson General Hospital. The two entities negotiated globally capitated Medicare and commercial contracts jointly with managed care organizations. The capitation dollars are split by category of business, based on whether each is a natural fit for either partner.
For example, Browne-McHardy assumes all risk for physician services, outpatient diagnostic testing, and inpatient professional fees. The hospital takes on inpatient facility fees, inpatient diagnostic technical fees, durable medical equipment, and home health services. Gray areas that aren’t a natural fit for either organization are split up after both partners discuss how best to do it.
2. Joining a 115-physician independent practice association (IPA), which in turn aligned with another group practice in the area to form New Orleans Health Care Alliance, a 500-physician IPA. "We recognized the need to increase in size without merging with other practices," Goldstein says. "The main reason we did it is to increase our primary care base so that we’re more attractive to outside insurers and employers, and to increase our access. We also expanded the specialty network to include specialties our clinic doesn’t provide, such as radiology and anesthesiology."
The collective organization represents 500 physicians in a variety of specialties, giving the group strength in numbers. Goldstein serves as chief administrative officer, and a physician leader serves as chairman of the board and chief medical officer. This is a critical component, he stresses, because representing the physicians’ perspectives is key to operating effectively.
Goldstein estimates that he and the chief medical officer meet at least two to three hours daily. Although he advises practices to seek legal advice so they do not violate antitrust laws, he says collectively negotiating as one group has led to more favorable contract provisions with payers.
3. Expanding the practice regionally by forming a management services organization to sell its administrative expertise to practices in surrounding Gulf Coast states. Browne-McHardy markets administrative services, including claims settlement, information services, contract negotiation, utilization management, and other services to practices in Mississippi, Florida, Alabama, and other Louisiana markets. The eventual goal of these affiliations, Goldstein says, is to have relationships in place in case a payer is looking for a single provider organization to contract with along the Gulf Coast.
Payment for these administrative services is negotiated on a case-by-case basis depending on the practice’s needs, Goldstein says. "We don’t price this to make a great deal of money. This has the potential of bringing some additional revenue in — and I underline some — and also has other ability to offset some internal expenses," he adds. These usually are practices that have heard about Browne-McHardy and that approach the practice about providing administrative support. Because the clinic already had software and other systems in place for its own use, it did not need to invest money in further equipment or staff.
Goldstein says the practice will continue to look for ways to maximize its contracting negotiating capability. "I think we’ve been able to match our capabilities with our vision, and I think that’s all you look for. You have to have a truly visionary and innovative physician leader who’s willing to give up a great deal of time, and we’re fortunate to have that. We sometimes in a facetious moment say we have the strategy du jour. For us, today’s strategy is good for today, but today also brings new opportunities that might mean we have to change that strategy."
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