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Academic practice groups: strategy for survival.

BACKGROUND: The mission of public academic health centers (puAHC) and their affiliated practice groups (APG) focuses on teaching, research, and the clinical care of at-risk populations. Resources to accomplish this mission, however, are becoming scarce. For puAHC to survive and remain competitive, innovative strategies will need to be developed by the APG. We hypothesized that the integration of a surgical academic practice of the APG with a nonacademic integrated health care delivery system (NAIDS) in a managed care environment would benefit all involved. METHODS: A surgical academic practice was integrated with a NAIDS in a 95% managed care market. Faculty alone provided care the first year, and third-year residents were added the following year. To assess outcome, we collected benefit and cost data for the 1-year period before integration and compared them with the two, 1-year periods after integration. RESULTS: In the second year of integration, revenues from the NAIDS referrals to the puAHC and APG increased 89% and 150%, respectively. The NAIDS' general surgical and endoscopy caseload increased by 25%. Additionally, there was a 92% reduction in operating room technician cost with no increase in operating time per case. Finally, the third-year resident experienced a caseload increase of 163%. CONCLUSIONS: In an environment where resources are diminishing and managed care consists of many large NAIDS that drive referrals and revenue, the integration of a surgical academic practice with a NAIDS benefits all shareholders. Academic practice groups that develop strategies that leverage their competitive advantage will have the best chance of surviving in today's turbulent health care market.

Academic Medical Centers↗

Effects of a faculty prepaid group practice in a pediatric primary care clinic.

Medical student and resident education at a hospital-operated pediatric primary care clinic (PPCC) was threatened by chronic financial deficits and by a state mandate that all patients receiving medical care through the state Aid to Families with Dependent Children program be enrolled in a health maintenance organization (HMO). To comply with the mandate, the PPCC was reorganized in 1984 as a faculty-operated prepaid group practice independent of the hospital. The new PPCC contracted with an HMO to provide care, with reimbursement based on capitation. The PPCC continues to serve the same patient population as before the reorganization, continues its teaching activities, and no longer has financial deficits. The experience at this clinic shows that converting to a faculty prepaid group practice can be cost-effective, promote efficiency, and improve faculty-hospital relations. Such a group practice is an appropriate organization for maintaining medical education programs while providing care in a capitation payment system.

Aid to Families with Dependent Children↗

Flexibility key to group practice in the age of managed care.

As changes in payment occur and managed care evolves, group practices are reclaiming influence over clinical care by assuming greater financial risk. Larger groups are becoming a force for change by using flexible structures to help improve a host of activities at the point of care. Group practices and their collaborative partners are refining their approaches to cooperative patient management, clinical utilization and quality, and risk contracting.

Capitation Fee↗

The organizational structure of medical group practices in a managed care environment.

This article analyzes the organizational structures of 155 medical group practices providing services in the highly competitive managed care environment in the upper midwest. The structure of the group practices and the methods of physicians' payment are analyzed in terms of the proportion of revenue obtained from financial risk-sharing managed care payment systems and the length of time involved with those systems.

Blue Cross Blue Shield Insurance Plans↗

How group practices can avoid managed care contracting pitfalls.

When negotiating contracts with managed care organizations, group practices should understand the potential pitfalls involved. The basic issues to be aware of are understanding the relative parties' negotiating positions, the business significance of fundamental terms, and the actual contract provisions. The most important clauses in contracts concern compensation and termination. Group practices should require that their contracts include clauses that provide the physicians with protection should utilization assumptions not be met. They also should be realistic about their ability to fulfill contract terms. In addition, contract terms should be clearly written, well-defined, and time-limited.

Contract Services↗

Rural health care: opportunities for established group practices.

Many rural areas of the United States are considered medically underserved. At the core of this underservice is a lack of physicians. Physicians are not attracted to rural areas for a variety of personal and professional reasons. We explore the role of established group practices (EGPs) in dealing with these barriers, by using a model of small associated group practices (AGPs) created in rural communities in association with a larger EGP located elsewhere. We also describe the use of this model by the Lovelace Medical Foundation in New Mexico in creating three rural group practices and planning a fourth.

Attitude↗

A survey of physicians in a large group practice.

Job satisfaction surveys among physicians, a recent phenomenon, are a very important managerial tool to determine the work motivation needs of physician-employees. The first MD Job Survey was done in 1984 by Lichtenstein on physicians employed by prisons. The largest survey of salaried physicians to date has been the 1987 Health Services Research Center of Chapel Hill survey of physicians employed in group practices. Currently, individual group practices are surveying their staffs with job satisfaction questions in order to enhance the work environment.

Attitude of Health Personnel↗

Emerging state policy trends related to medical group practice: Alpha Center.

This article examines how state health care policy affects new ventures involving medical group practices. It will review briefly traditional state authorities related to the health care sector in general and physician organizations in particular. The article will then discuss state policies related to a range of physician organizations, including those aligned with larger provider systems. State policies related to physician organization in the competitive marketplace include several topics: referral practices, tax exemption, corporate practice of medicine, and antitrust and insurance regulation. Finally, it will discuss the implications of these trends for future enterprises undertaken by medical group practices.

Antitrust Laws↗

Opportunities and issues for medical group practices.

For the second consecutive year, McManis Associates, a health care management consulting firm and subsidiary of MMI Companies Inc., held, in conjunction with the 1996 MGMA/AMA joint legislation conference, an executive forum for leaders of medical group practices for a discussion of some of the key trends and issues they are facing today. The forum included five group practice executives from a variety of organization types and situations, and was structured to encourage them to engage in a candid exchange about their own opinions and experiences. Discussion was facilitated by Gerald L. McManis, president of McManis Associates, Louis Pavia Jr., executive vice president, and F. Kenneth Ackerman Jr., FACMPE, principal associate. This article provides a summary of the forum proceedings, as well as some commentary by the authors, based on their experience in working with medical group practices around the country.

Cost-Benefit Analysis↗

Mental health services: utilization by low income enrollees in a prepaid group practice plan and in an independent practice plan.

Mental health services were included in a comprehensive package of benefits available to low income enrollees in a prepaid group practice plan (PGP) and in an independent practice plan (IPP) under the Seattle Prepaid Health Care Project. There were no out-of-pocket costs for enrollees. Utilization of services was studied for four years under conditions that might simulate universal entitlement. The analyses indicated that females used substantially more mental health services than males and that enrollees aged 20-44 used more services than those in other age groups. The prepaid group practice generally experienced higher utilization than the prepaid independent plan. Significant racial differences were evident with whites using more services than blacks and black males using strikingly few services. The prepaid independent plan was oriented toward physician providers and emphasized individual psychotherapy while the prepaid group practice employed a diversity of practitioners and therapeutic modalities. The data indicated that the per cent of enrollees using any mental health services was twice as great in the PGP as in the IPP. However, once access to the provider system was achieved, the number of services utilized was greater in the PGP. Inpatient services were also examined. A significantly higher proportion of IPP enrollees were admitted for inpatient care as compared to PGP enrollees. Finally, the cost of mental health services was less than ten per cent of total health service costs in both plans.

Adolescent↗