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Successful practice in a managed care environment: Managing costs while managing care
GASTROENTEROLOGY 1996;111:516–518
AMERICAN GASTROENTEROLOGICAL ASSOCIATION Successful Practice in a Managed Care Environment: Managing Costs While Managing Care This commentary is one in a series of messages from the American Gastroenterological Association leadership that will explore the major issues facing our profession and explain the policy decisions made and actions taken to address them.
T
here is a scene in the 1992 film version of The Last of the Mohicans in which the two principal characters, the Mohican Indian–raised Hawkeye and the Englishwoman Cora, are trapped behind a waterfall as a Huron war party closes in. Caught in the middle of an 18th century British–French battle over American territory, they have endured the massacre of a troop of soldiers, the siege of a British fort, the deaths of an innocent frontier family, and several attempts on their own lives. Now, knowing the Hurons will kill them if they are caught together, they decide to separate, with Hawkeye attempting escape down the dangerous falls. But first he turns to Cora and demands of her, ‘‘Survive! Do whatever you have to do! Afterwards, I will find you.’’ The concept of survival under harsh and turbulent circumstances resonates not only on film but in real life. The need to survive—and prosper—in the face of quickly changing economic, political, and cultural forces is as compelling today as it was in the early years of American history. Many of us, as gastroenterology clinicians, feel caught in the middle of a pitched battle as the politics, economics, and culture of the rapidly emerging corporatization of health care places enormous pressure on our practices. Investors, businesspeople, and entrepreneurs, who know and care nothing about the quality of health care or its delivery, are engaged in a feeding frenzy of activity, reaping enormous profits by rationing care and shifting this money out of the health care system. We are all familiar with the changes brought about by the corporatization of health care over the past several years: limits on the patients we see as they are increasingly denied access to specialists; steep and often arbitrary reductions in payments for our services; widespread interruptions in continuity of care as whole groups of patients change hands along with their employers’ managed care contracts; the charade of emphasis on disease prevention; and an utter disregard for research funding and medical education, the complementary disciplines so necessary to effective health care delivery. And when we protest, we are charged with self interest. / 5e10$$0018
07-01-96 23:43:20
gasa
The long-term silver lining to this dark cloud is that, just as investors were attracted to the health care sector because of its promised profits, so, too, will they look for greener pastures when they have squeezed out of it what they came for. As disenchantment with fewer choices, denial of specialty care, and increasing numbers of marginalized patients grows, investors in this pyramiding scheme, as former Surgeon General C. Everett Koop referred to it, will move on, and we will reclaim our profession. But in the short term, we must survive. We need to understand the forces driving reform and managed care and develop the knowledge and tools to effectively manage our practices while continuing to aggressively advocate for our patients and our profession. It was with these needs and goals in mind that the American Gastroenterological Association (AGA) partnered with the American Society for Gastrointestinal Endoscopy (ASGE) to formulate its ‘‘Successful Practice in a Managed Care Environment’’ initiative.
Successful Practice in a Managed Care Environment As traditional fee-for-service medicine gives way to the forces of managed care, the clinical practice of gastroenterology becomes more complex, and more questions and concerns arise. What exactly is managed care? What is capitation? How do managed care organizations and models differ? How does gastroenterology fit into this new system and how will it change my practice? What should I consider when deciding whether to join a managed care organization? What are my rights as a practitioner in a managed care organization? How can I become proficient in the ‘‘language’’ of managed care? The multifaceted structure of the ‘‘Successful Practice’’ initiative answers these and many other questions and offers solutions to the issues that gastroenterology clinicians must address today. We have targeted the program to four areas key to the success of a clinician’s medical practice (practice management, payment and reimburseWBS-Gastro
August 1996
AMERICAN GASTROENTEROLOGICAL ASSOCIATION 517
ment, treatment and referral guidelines, and provider relations) and have developed tangible tools and comprehensive documents to guide practitioners in their dealings and decision-making. These targeted areas address both the business side of running a medical practice and the patient care side.
Making Sound Business Decisions: The Key to Managing Your Practice The reality of a capitated environment requires that gastroenterologists today provide more than just quality medical care. We also must adhere to certain business practices that call for skills as contract negotiators, risk managers, and quality assurance professionals. In addition, we must master the categorization and coding of office visits and medical procedures to ensure a timely turnaround for payment. The information and resources necessary to manage the business side of a medical practice are the concern of the Practice Management and Payment and Reimbursement portions of the ‘‘Successful Practice’’ initiative.
To answer the cornucopia of questions that managed care engenders, the Practice Management Committee has produced a comprehensive managed care and capitation contract manual that is practical, problem-focused, and easy to understand. The Internist’s Guide to Negotiating Managed Care Contracts & Capitation Rates—Gastroenterology Edition is tailored specifically to gastroenterologists and other digestive disease specialists and can guide practitioners on how to evaluate managed care options, decide which managed care affiliations are best for them, and negotiate contracts that are in the best interests of themselves and their patients. This guide includes a comprehensive glossary to aid gastroenterologists in becoming literate in managed care terminology and is designed both for clinicians who may have little knowledge of how managed care operates, as well as those who are experienced with it. In addition, we have created a series of 11/2-day conferences covering all aspects of maintaining a practice in a managed care–dominated environment. The conferences feature nationally recognized managed care executives, health care consultants, and physician experts who present information and answer questions on the growth of managed care, how it impacts gastroenterology specifically, and how to understand and manage capitation. Small group sessions during the conferences enable attendees to interact on an up-close-and-personal basis, focus on particular issues of concern to them, and share related experiences, problems, and solutions. 07-01-96 23:43:20
Referral Services To ensure that members have quick and ongoing access to the best advice on managed care questions and concerns, the Practice Management Committee directed staff to negotiate with several legal firms and practice management consultants across the country for professional services at reduced fees for our members. Beginning this fall, we expect to have concluded arrangements with companies in various regions of the country so AGA and ASGE members can access these professionals for guidance on contract analysis, negotiations, and practice management issues. Look for further information in our monthly magazine, AGA NEWS, and member mailings. Payment and Reimbursement
Practice Management
/ 5e10$$0018
The two conferences held earlier this year in New York and Los Angeles were extremely well attended and received; a third conference, in conjunction with the Medical Group Management Association, is planned for Chicago on September 24–25. We are already exploring the possibility of continuing and expanding the series into 1997.
gasa
To address the nuts and bolts of payment and reimbursement issues, the AGA has for several years featured a column in AGA NEWS called ‘‘Cracking the Codes.’’ Designed to discuss the details of how to properly code office visits, medical procedures, and hospitalizations, the column is an outgrowth of the seminars held for AGA and ASGE members several times a year by Medical Financial Management, a nationally recognized firm on the coding of gastroenterological care and procedures. Both the column and the full-day workshops can aid members and their staffs in reducing paperwork, speeding payments, and avoiding errors. Payment & Reimbursement panel members are also exploring the creation of a managed care financial data book to assist society members in evaluating contract proposals based on regional payment and reimbursement data, utilization and referral trends by region, and the range of capitation rates for physician services, also separated by region. Such objective financial data, often not provided by managed care organizations themselves, will help clinicians fulfill their fiscal responsibilities by guiding them in making informed business decisions.
Patient Advocacy: Still Our First Priority Perhaps the most frustrating aspect of navigating the changes brought about by managed care is the increase in time clinicians must spend on business activities, reducing the time we can spend on patient care— WBS-Gastro
518 AMERICAN GASTROENTEROLOGICAL ASSOCIATION
GASTROENTEROLOGY Vol. 111, No. 2
the reason we became physicians in the first place. But ensuring appropriate, timely, and high-quality medical attention for our patients, within or without a managed care environment, remains our first priority. The ‘‘Successful Practice’’ initiative has undertaken to help clinicians in this area with committee panels devoted to developing credible treatment and referral guidelines and informative provider relations activities directed at managed care organizations. Treatment and Referral Guidelines Guidelines for treating patients with digestive disorders are only as good as the data on which they are based. Typically, many digestive disease treatment guidelines targeted at primary care physicians have been based upon actuarial data, which only concerns itself with the monetary cost of treatment, e.g., ‘‘what is the cheapest pill?’’ The Treatment and Referral Guidelines panel of our ‘‘Successful Practice’’ initiative will concern itself with the question, ‘‘what is the best, most cost-effective medicine for our patients?’’ We will use an evidence-based model for developing these guidelines, predicated on a methodological analysis of current scientific literature, studies, and peer-reviewed data. The analysis will look at the spectrum of medical treatment and take into consideration quality of care, best outcomes, and effectiveness of treatment, as well as cost. The result will be sign- and symptom-based guidelines, which are patientoriented, legitimate, and credible. Our first three guidelines will target asymptomatic transaminase elevation, dyspepsia, and diarrhea. Because these guidelines are intended to help primary care physicians know when to consult a gastroenterology specialist and what courses of treatment constitute appropriate care, the Treatment and Referral Guidelines panel is composed of both gastroenterologists and general practice physicians. In addition to advocating what is proper for patients, it is our hope that these efforts will promote better understanding and relations between these two disciplines as we work closer together under managed care. Provider Relations Primary care physicians are not the only players in a managed care environment with whom gastroenter-
/ 5e10$$0018
07-01-96 23:43:20
gasa
ologists must develop cooperative working relationships. To ensure that patients with digestive diseases receive the best medical care, it is vital that third-party payers, managed care organizations, and industry standard setters also be aware of the role gastroenterologists play in the continuum of care. Provider Relations committee members in the ‘‘Successful Practice’’ initiative are tasked with educating these audiences on the function we serve in the practice of medicine and to raise awareness of the standards needed to provide optimum care. Our treatment and referral guidelines are the vehicle through which this will be accomplished. Once the guidelines are finalized, we will target a variety of thirdparty audiences for meetings and presentations on the importance of distributing the guidelines to their physicians for use in determining the most appropriate care for patients with digestive diseases. In so doing, we will also be fostering relationships and advocating for our specialty with the organizations representing potential partnerships for our members. Through the ‘‘Successful Practice in a Managed Care Environment’’ initiative, we will undoubtedly strengthen relationships with our clinician members and explore together additional avenues for helping to meet your needs in the demanding world of managed care. I believe our program offers an unparalleled opportunity for us to address managed care issues straight on and survive, perhaps even prosper, during this upheaval. As the turbulence of war in The Last of the Mohicans passed by, enabling the main characters at the end to reclaim each other and control over their lives, so, too, will we survive the upheaval of managed care and its attendant circumstances to reclaim what is ours. In this way, we will continue serving the privileges and responsibilities we have embraced as physicians. JAMES W. FRESTON, M.D., Ph.D.
Past President
Address requests for reprints to: James W. Freston, M.D., Ph.D., Department of Medicine, University of Connecticut Health Center MC3745, 263 Farmington Avenue, Farmington, Connecticut 06030. Fax: (860) 679-1281. 䉷 1996 by the American Gastroenterological Association 0016-5085/96/$3.00
WBS-Gastro
AMERICAN GASTROENTEROLOGICAL ASSOCIATION Successful Practice in a Managed Care Environment: Managing Costs While Managing Care This commentary is one in a series of messages from the American Gastroenterological Association leadership that will explore the major issues facing our profession and explain the policy decisions made and actions taken to address them.
T
here is a scene in the 1992 film version of The Last of the Mohicans in which the two principal characters, the Mohican Indian–raised Hawkeye and the Englishwoman Cora, are trapped behind a waterfall as a Huron war party closes in. Caught in the middle of an 18th century British–French battle over American territory, they have endured the massacre of a troop of soldiers, the siege of a British fort, the deaths of an innocent frontier family, and several attempts on their own lives. Now, knowing the Hurons will kill them if they are caught together, they decide to separate, with Hawkeye attempting escape down the dangerous falls. But first he turns to Cora and demands of her, ‘‘Survive! Do whatever you have to do! Afterwards, I will find you.’’ The concept of survival under harsh and turbulent circumstances resonates not only on film but in real life. The need to survive—and prosper—in the face of quickly changing economic, political, and cultural forces is as compelling today as it was in the early years of American history. Many of us, as gastroenterology clinicians, feel caught in the middle of a pitched battle as the politics, economics, and culture of the rapidly emerging corporatization of health care places enormous pressure on our practices. Investors, businesspeople, and entrepreneurs, who know and care nothing about the quality of health care or its delivery, are engaged in a feeding frenzy of activity, reaping enormous profits by rationing care and shifting this money out of the health care system. We are all familiar with the changes brought about by the corporatization of health care over the past several years: limits on the patients we see as they are increasingly denied access to specialists; steep and often arbitrary reductions in payments for our services; widespread interruptions in continuity of care as whole groups of patients change hands along with their employers’ managed care contracts; the charade of emphasis on disease prevention; and an utter disregard for research funding and medical education, the complementary disciplines so necessary to effective health care delivery. And when we protest, we are charged with self interest. / 5e10$$0018
07-01-96 23:43:20
gasa
The long-term silver lining to this dark cloud is that, just as investors were attracted to the health care sector because of its promised profits, so, too, will they look for greener pastures when they have squeezed out of it what they came for. As disenchantment with fewer choices, denial of specialty care, and increasing numbers of marginalized patients grows, investors in this pyramiding scheme, as former Surgeon General C. Everett Koop referred to it, will move on, and we will reclaim our profession. But in the short term, we must survive. We need to understand the forces driving reform and managed care and develop the knowledge and tools to effectively manage our practices while continuing to aggressively advocate for our patients and our profession. It was with these needs and goals in mind that the American Gastroenterological Association (AGA) partnered with the American Society for Gastrointestinal Endoscopy (ASGE) to formulate its ‘‘Successful Practice in a Managed Care Environment’’ initiative.
Successful Practice in a Managed Care Environment As traditional fee-for-service medicine gives way to the forces of managed care, the clinical practice of gastroenterology becomes more complex, and more questions and concerns arise. What exactly is managed care? What is capitation? How do managed care organizations and models differ? How does gastroenterology fit into this new system and how will it change my practice? What should I consider when deciding whether to join a managed care organization? What are my rights as a practitioner in a managed care organization? How can I become proficient in the ‘‘language’’ of managed care? The multifaceted structure of the ‘‘Successful Practice’’ initiative answers these and many other questions and offers solutions to the issues that gastroenterology clinicians must address today. We have targeted the program to four areas key to the success of a clinician’s medical practice (practice management, payment and reimburseWBS-Gastro
August 1996
AMERICAN GASTROENTEROLOGICAL ASSOCIATION 517
ment, treatment and referral guidelines, and provider relations) and have developed tangible tools and comprehensive documents to guide practitioners in their dealings and decision-making. These targeted areas address both the business side of running a medical practice and the patient care side.
Making Sound Business Decisions: The Key to Managing Your Practice The reality of a capitated environment requires that gastroenterologists today provide more than just quality medical care. We also must adhere to certain business practices that call for skills as contract negotiators, risk managers, and quality assurance professionals. In addition, we must master the categorization and coding of office visits and medical procedures to ensure a timely turnaround for payment. The information and resources necessary to manage the business side of a medical practice are the concern of the Practice Management and Payment and Reimbursement portions of the ‘‘Successful Practice’’ initiative.
To answer the cornucopia of questions that managed care engenders, the Practice Management Committee has produced a comprehensive managed care and capitation contract manual that is practical, problem-focused, and easy to understand. The Internist’s Guide to Negotiating Managed Care Contracts & Capitation Rates—Gastroenterology Edition is tailored specifically to gastroenterologists and other digestive disease specialists and can guide practitioners on how to evaluate managed care options, decide which managed care affiliations are best for them, and negotiate contracts that are in the best interests of themselves and their patients. This guide includes a comprehensive glossary to aid gastroenterologists in becoming literate in managed care terminology and is designed both for clinicians who may have little knowledge of how managed care operates, as well as those who are experienced with it. In addition, we have created a series of 11/2-day conferences covering all aspects of maintaining a practice in a managed care–dominated environment. The conferences feature nationally recognized managed care executives, health care consultants, and physician experts who present information and answer questions on the growth of managed care, how it impacts gastroenterology specifically, and how to understand and manage capitation. Small group sessions during the conferences enable attendees to interact on an up-close-and-personal basis, focus on particular issues of concern to them, and share related experiences, problems, and solutions. 07-01-96 23:43:20
Referral Services To ensure that members have quick and ongoing access to the best advice on managed care questions and concerns, the Practice Management Committee directed staff to negotiate with several legal firms and practice management consultants across the country for professional services at reduced fees for our members. Beginning this fall, we expect to have concluded arrangements with companies in various regions of the country so AGA and ASGE members can access these professionals for guidance on contract analysis, negotiations, and practice management issues. Look for further information in our monthly magazine, AGA NEWS, and member mailings. Payment and Reimbursement
Practice Management
/ 5e10$$0018
The two conferences held earlier this year in New York and Los Angeles were extremely well attended and received; a third conference, in conjunction with the Medical Group Management Association, is planned for Chicago on September 24–25. We are already exploring the possibility of continuing and expanding the series into 1997.
gasa
To address the nuts and bolts of payment and reimbursement issues, the AGA has for several years featured a column in AGA NEWS called ‘‘Cracking the Codes.’’ Designed to discuss the details of how to properly code office visits, medical procedures, and hospitalizations, the column is an outgrowth of the seminars held for AGA and ASGE members several times a year by Medical Financial Management, a nationally recognized firm on the coding of gastroenterological care and procedures. Both the column and the full-day workshops can aid members and their staffs in reducing paperwork, speeding payments, and avoiding errors. Payment & Reimbursement panel members are also exploring the creation of a managed care financial data book to assist society members in evaluating contract proposals based on regional payment and reimbursement data, utilization and referral trends by region, and the range of capitation rates for physician services, also separated by region. Such objective financial data, often not provided by managed care organizations themselves, will help clinicians fulfill their fiscal responsibilities by guiding them in making informed business decisions.
Patient Advocacy: Still Our First Priority Perhaps the most frustrating aspect of navigating the changes brought about by managed care is the increase in time clinicians must spend on business activities, reducing the time we can spend on patient care— WBS-Gastro
518 AMERICAN GASTROENTEROLOGICAL ASSOCIATION
GASTROENTEROLOGY Vol. 111, No. 2
the reason we became physicians in the first place. But ensuring appropriate, timely, and high-quality medical attention for our patients, within or without a managed care environment, remains our first priority. The ‘‘Successful Practice’’ initiative has undertaken to help clinicians in this area with committee panels devoted to developing credible treatment and referral guidelines and informative provider relations activities directed at managed care organizations. Treatment and Referral Guidelines Guidelines for treating patients with digestive disorders are only as good as the data on which they are based. Typically, many digestive disease treatment guidelines targeted at primary care physicians have been based upon actuarial data, which only concerns itself with the monetary cost of treatment, e.g., ‘‘what is the cheapest pill?’’ The Treatment and Referral Guidelines panel of our ‘‘Successful Practice’’ initiative will concern itself with the question, ‘‘what is the best, most cost-effective medicine for our patients?’’ We will use an evidence-based model for developing these guidelines, predicated on a methodological analysis of current scientific literature, studies, and peer-reviewed data. The analysis will look at the spectrum of medical treatment and take into consideration quality of care, best outcomes, and effectiveness of treatment, as well as cost. The result will be sign- and symptom-based guidelines, which are patientoriented, legitimate, and credible. Our first three guidelines will target asymptomatic transaminase elevation, dyspepsia, and diarrhea. Because these guidelines are intended to help primary care physicians know when to consult a gastroenterology specialist and what courses of treatment constitute appropriate care, the Treatment and Referral Guidelines panel is composed of both gastroenterologists and general practice physicians. In addition to advocating what is proper for patients, it is our hope that these efforts will promote better understanding and relations between these two disciplines as we work closer together under managed care. Provider Relations Primary care physicians are not the only players in a managed care environment with whom gastroenter-
/ 5e10$$0018
07-01-96 23:43:20
gasa
ologists must develop cooperative working relationships. To ensure that patients with digestive diseases receive the best medical care, it is vital that third-party payers, managed care organizations, and industry standard setters also be aware of the role gastroenterologists play in the continuum of care. Provider Relations committee members in the ‘‘Successful Practice’’ initiative are tasked with educating these audiences on the function we serve in the practice of medicine and to raise awareness of the standards needed to provide optimum care. Our treatment and referral guidelines are the vehicle through which this will be accomplished. Once the guidelines are finalized, we will target a variety of thirdparty audiences for meetings and presentations on the importance of distributing the guidelines to their physicians for use in determining the most appropriate care for patients with digestive diseases. In so doing, we will also be fostering relationships and advocating for our specialty with the organizations representing potential partnerships for our members. Through the ‘‘Successful Practice in a Managed Care Environment’’ initiative, we will undoubtedly strengthen relationships with our clinician members and explore together additional avenues for helping to meet your needs in the demanding world of managed care. I believe our program offers an unparalleled opportunity for us to address managed care issues straight on and survive, perhaps even prosper, during this upheaval. As the turbulence of war in The Last of the Mohicans passed by, enabling the main characters at the end to reclaim each other and control over their lives, so, too, will we survive the upheaval of managed care and its attendant circumstances to reclaim what is ours. In this way, we will continue serving the privileges and responsibilities we have embraced as physicians. JAMES W. FRESTON, M.D., Ph.D.
Past President
Address requests for reprints to: James W. Freston, M.D., Ph.D., Department of Medicine, University of Connecticut Health Center MC3745, 263 Farmington Avenue, Farmington, Connecticut 06030. Fax: (860) 679-1281. 䉷 1996 by the American Gastroenterological Association 0016-5085/96/$3.00
WBS-Gastro