Humming to PPMC tune can mean music or noise
Humming to PPMC tune can mean music or noise
Practices, physicians still struggling with options
As just about any parent with teenagers can attest, one man's symphony will make another man reach for earplugs. Beautiful music is truly in the ear of the beholder. And so it goes for an important decision many physicians and practice managers face these days: whether or not to affiliate with a physician practice management company (PPMC).
Physician's Managed Care Report talked with two people - one an independent emergency room physician, and another an administrator for a cardiology practice - who offer insights into how their two organizations dealt with this quandary.
For Paula Pell, MD, the burden of chasing down missing payments from managed care organizations was the final straw. Like many other Florida emergency room physicians, she says her collection of reimbursement owed by the government or other payers typically runs between 20% to 50% of medical services billed. "Medicaid reimbursement for an emergency room visit may only be $6. That won't even cover the cost of having staff available," she explains.
As a result, Pell and approximately 2,500 other emergency room physicians banded together in 1997 by affiliating with Team Health, a Tampa practice management group. Billing is done centrally by Team Health, which frees Pell and the other physicians up to practice medicine, not collect bills. Pell now works as an employee rather than as a contract physician for All Children's Hospital in Tampa, although this is still where she practices medicine.
Pell asserts that her affiliation with Team Health has not affected the way she practices medicine, but it does affect her financial status. "It changed my pension plan and benefits, but in the long run it will be better. I feel like a third party has entered into my relationship with patients now. But if there are problems with billing, I don't hear about it."
The Heart Institute in St. Petersburg, FL, is near Dr. Pell's practice geographically, but it's 180 degrees away in terms of its position on PPMCs. T.J. Borschel, the cardiology practice's administrator, refused to sign a deal that would have lead to an affiliation with Nashville, TN-based PhyCor Inc., one of the nation's leading PPMCs. The practice formerly was involved in a general partnership with a local multispecialty group, which was approached by PhyCor in February 1997.
The practice's leadership decision not to affiliate, Borschel says, was philosophical as well as financial. "Our doctors did not believe Wall Street medicine was the way to go. We felt the ability to control costs delivered by medicine should be done by physicians, not by Wall Street profiteers," he says. "We were doing everything to reduce our overhead, and then to have them add on 10% to 15% [in management fees] would decrease our revenue."
Borschel knows the practice needs some sort of affiliated partner, however. It currently is in discussions to partner with about two dozen other cardiology groups in Florida in order to pursue global risk "carve-out" contracts for congestive heart failure and other diseases. Eventually, that may lead to affiliating with even more groups to develop a regional cardiology presence, Borschel says.
[Editor's note: How has your practice handled the decision of whether or not to affiliate with a physician practice management company? Contact Francine Wilson at [email protected] or (404) 262-5416. We hope to publish reader comments in a future issue.]
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