Tightly Organized Doctors Seen as Best Bet for Quality

Not-for-profit insurers contracting with physician groups provide better results, says one study. What can for-profit plans learn?

Assume that high quality care really does save money. Though that hasn’t been proven, much of what managed care does is based on that premise. Perhaps, though, the question is moot for there is always the human element. If it could be demonstrated that high quality care actually costs more, would health plans stop striving, given the “first, do no harm” oath handed down to physicians in antiquity?

Still, we live in the modern world (of course, so did the Greeks) and have to deal with the modern reality that we can’t afford to provide all the care that everybody wants. How about the care everybody needs, then?


A study published in the journal Health Services Research suggests that health plans that contract with tightly organized physician practice groups score higher on preventive health care indicators measured by the National Committee for Quality Assurance’s HEDIS and the Consumer Assessment of Healthcare Providers and Systems surveys. The study reviewed 2003 data from 272 health plans nationwide, looking at quality scores for preventive measures such as women’s health screening, immunization rates, heart disease screening, and diabetes screening.

“The central thesis is that disease screening and prevention practices, as one set of measures of quality of care, are more likely to be carried out in more organized practices such as staff (i.e., salaried relationships) and group (i.e., contractual relationship between a health plan and an organized multispecialty practice) models,” states the study, which is titled “The Impact of Health Plan Delivery System Organization on Clinical Quality and Patient Satisfaction.”

In part, it concludes: “The results of this study provide evidence suggesting that health plans that rely more on organized physician groups or internal (staff) physician groups perform at a higher level on many clinical measures than plans without this form of delivery system.”

Jack Ebeler, president and chief executive of the Alliance of Community Health Plans, an organization of not-for-profit health plans, says that what has “been interesting about the study, and why we have been sending it around, is that it is an external validation from a research team that the link between quality and tightly organized doctor groups does seem to be holding up when you look at the data and adjust for a lot of the things that previously weren’t adjusted for.”

The question

Not-for-profit plans tend to contract more often than commercial plans with the sorts of physician groups described in the study. Does it then follow that not-for-profit insurers provide better care than the for-profits? Ebeler won’t touch that one. “But the study does find that for-profit status is frequently negatively related to performance,” he adds.

One could be forgiven for concluding that comparisons are indeed being made. “We are saying that for-profits need to include aspects of quality as well as efficiency in their interactions with their affiliated physicians,” says Robin R. Gillies, PhD, research director of the national study of physicians at the University of California at Berkeley and the main author of the study. “If they do not, and if the quality of care their affiliated physicians provide does not meet some possible future specified standard, they may find they either are excluded from participation in some programs or lose market share by being portrayed as providing substandard care.”

Charles M. Cutler, MD, the head of national quality management at Aetna, says that every approach has its strengths — and weaknesses. “The staff- and group-model health plans provide an infrastructure such as patient registries and electronic medical records that support better performance on HEDIS measures,” Cutler admits.

“On the other hand, they have much narrower networks and they have practice bureaucracies that some patients find daunting.

“As a large national plan, we can offer our members a wide choice of physicians and have built a virtual infrastructure with reminders, registries, and care considerations from tools such as our MedQuery Program to support physicians and improve clinical outcomes.

“Bottom line — we can keep satisfaction levels high by providing our members with access to a broad provider network and help providers with a virtual infrastructure that doesn’t otherwise exist in the health care system.”

No matter who pays them, multispecialty groups are usually going to have a greater capability, says Margaret E. O’Kane, president of the National Committee for Quality Assurance. “Whether that potential is realized depends on whether they have good management, whether they have good IT.”

Steve McDermott, executive director of Hill Physicians Medical Group, one of the largest IPAs in the country, reminds us that so much happens in the doctor’s office. “While the turnover rate at the plan level tends to be high, it is low at the provider level, so disease screening and prevention makes sense at our level.”

Large for-profit health plans have a lot to learn from the relationship between not-for-profit plans and highly organized physician groups, says Jay Crosson, MD, executive director of the Permanente Federation, which supports the quality improvement efforts of the Permanente Medical Groups and the 14,000 physicians associated with Kaiser Permanente.

“Large for-profit plans might want to look at the cost of health care services across the country and compare commercial costs in areas such as California, Oregon, Washington, and the upper Midwest — Minnesota, Wisconsin, Iowa, where the markets and practice patterns have been shaped by large-group practices — to the costs in areas like New York City, Chicago, and Miami, where solo practice reigns,” he says. “There is a 25 percent to 30 percent difference — the former lower than the latter.”

Grouping providers

McDermott says that plans such as Aetna and Humana “bring a level of oversight and accountability that adds to the quality factor that the old Blue Cross Blue Shield plans never did. However, if they are not grouping up their providers, then it is still a disaggregated environment with all the usual disconnects, redundancy, lack of coordination, and little or no structure.”

No matter what type group an insurer contracts with, the health plan should keep in mind that its success is tied to the success of its doctors, Gillies says. “Health plans should try to determine how they can help their affiliated physicians, especially those without a lot of support resources at their disposal, improve the quality of care provided,” she says. “It may be helping or encouraging their affiliated physicians to develop the ability to do processes of care; it may be helping and encouraging development of IT capabilities; it may be providing physicians with lists of patients, like a registry, with different conditions, e.g., diabetes, asthma, to improve the physician’s ability to treat specific populations. Health plans can help shape the care provided by financial assistance, paying bonuses for quality.”

All the experts agree: Whether it’s solo practices, multispecialty networks contracting with for-profits, or staff- or group-model systems working with not-for-profits, the more cooperation between payer and provider, the better.

Putting it all together

O’Kane, of the NCQA, trots out a metaphor that she’s heard at health care conferences she’s attended over the years. “The American health care system is like buying a car where they come and put the parts on your lawn. What we’re all looking for is the entity that puts it all together and that is able to be accountable for the performance of the vehicle, rather than whether you got good spark plugs.”

Case for large, well organized groups

Tightly managed physician groups offer many advantages to health plans that contract with them, according to Robin R. Gillies, PhD, research director of the national study of physicians at the University of California at Berkeley. Gillies is the main author of a study titled “The Impact of Health Plan Delivery System Organization on Clinical Quality and Patient Satisfaction.”

Highly organized physician groups,” she says, “often provide the majority of their physicians with guideline-based reminders for services the patient should receive, provide data to their physicians on the quality of their care for patients with chronic illness, routinely send reminders for preventive or follow-up care directly to the group’s patients, make available nonphysician staff (for example, health educators and nurses) that are specially trained to educate patients in managing their illness to the group’s patients with chronic illness, provide written materials directly to patients that explain the guidelines for recommended medical care (for example, retinal screening for diabetics), and provide nurse care managers for the group’s patients with severe chronic illness.”

Not-for-profit health plans are more likely to contract with, or outright own, such physician groups, and officials with such plans often vouch for the efficiency of multispecialty groups.

“Not all physician groups are the same,” says Jay Crosson, MD, executive director of the Permanente Federation, which supports the quality improvement efforts of the Permanente Medical Groups and the 14,000 physicians associated with Kaiser Permanente. “Most established multispecialty group practices have been around for decades and are more than, and different from, some single-specialty practices that [commercial plans] may be used to and that may be formed solely to protect pricing power in a market.”

Nancy Taylor, MBA, the executive director of the Council of Accountable Physician Group Practices (an affiliate of the American Medical Group Association), says that “although there has historically been a dearth of research aimed at the delivery system level, a growing body of work over the past decade indicates that organized physician practices can provide greater accountability for the quality and cost of care because they have the organizational structure, resources, and information base to do so.”

That’s gratitude for you

Health plans that contract with tightly organized physician groups might expect many rewards: better outcomes, lower costs, growing enrollment. However, the one garland it won’t get is a grateful patient — or at least a patient who’s grateful for the right reason. The study, titled “The Impact of Health Plan Delivery System Organization on Clinical Quality and Patient Satisfaction,” is careful to point out that “the type of delivery system used by health plans is related to many clinical performance measures but is not related to patient perceptions of care.”

As David Wessel put it in the Wall Street Journal on Sept. 7: “The bottom line: Just because patients say they’re very happy with their doctors and the care they’re receiving doesn’t mean they’re getting good care, as defined by medical experts…. Americans as patients, in at least this respect, resemble Americans as voters. They often condemn the system, but they like their own connection to it…. The most-satisfied patients didn’t get better medical care than the least-satisfied.”

“I learned in health economics that health care has very few of the attributes of a market,” says Margaret E. O’Kane, president of the National Committee for Quality Assurance. “Patients don’t know whether they’re getting good care or not. That’s been documented many, many times in many different studies. Patients’ perceptions of quality don’t normally track with what the experts would say.”

Larger physician groups provide IT that patients want

One of the advantages of staff- and group-model health plans is the greater likelihood that such associations will rely more on information technology than other doctor systems, say some experts. “Physicians in groups of 50 or more are significantly more likely to use IT tools and to practice in a high-tech office, compared with physicians in solo practice,” says a 2004 Commonwealth Fund study whose primary author was Anne-Marie Audet, MD.

The findings were of interest to Nancy Taylor, MBA, the executive director of the Council of Affordable Group Practices (an affiliate of the American Medical Group Association). “According to their findings, the predominant factor affecting use of IT is practice size. Eighty-seven percent of large-group-practice physicians have access to electronic test results, compared to 36 percent of solo-practice physicians.”

A recent poll by Wall Street Journal Online/Harris Interactive suggests that tech-savvy physician groups may be what consumers are looking for — though there’s legitimate doubt that consumers would know the difference. (See “The case for large, well organized groups“.)

Source: Wall Street Journal Online/Harris Interactive, based on an online poll of 2,624 adults taken from September 5 to September 7

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