Question-and-Answer Session

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872 SUPPLEMENT

the hospital, or to order a laboratory test or an x-ray. Parents, or my older patients, can pick up the phone and call a specialist without necessarily coming to see me first, even though most would ask me first, because that is what I encourage them to do in the interest of good practice. My income is as much or more than I would be earning if I were seeing the same number of patients per day in any other orga-nization in town.

Now some might say that such a practice represents the good old days of medicine, that it could not possi-bly exist today, but it does. It exists here in San Diego and in other parts of the country, but predominantly in California, where physicians have taken the full risk for the cost of health care onto their side of the equation and where they are now managing a budgeted dollar to provide the health care for a population.

One of the groups that practices that way is

Kaiser-Permanente. Kaiser physicians have more clinical

freedom than any individual physician in his or her

office when managed care first comes to a town

offering contracts. I have attempted to set up groups that practice in a similar fashion in terms of manag-ing quality.

REFERENCES

1. Welch WP, Miller ME, Welch HG, et al. Geographic variation in expen-ditures for physicians’ services in the United States. N EngI I Med. 1993328:621-627

2. Chassin MR. KosecoffJ, Park RE, et al. Does inappropriate use explain geographic variations in the use of health care services? JAMA. 1987; 258:2533-2537

3. Wennberg JE, Mulley AG Jr. Hanley D, et al. An assessment of prostatectomy for benign urinary tract obstruction: geographic vari-ations and the evaluation of medical care outcomes. JAMA. 1988;259: 3027-3030

Question-and-Answer

Session

After the formal presentations and workshops, a

question-and-answer period was conducted by Dr

Birt Harvey. Drs Stanley Pappelbaurn, Anthony T.

Hirsch, Leonard A. Kutnik, and Nancy Perkins

served on the panel that responded to questions from the audience.

Q.

Is there a future for the independent practice of

pediatrics?

A. Independent practice as we know it today will be gradually phased out. The number of lives cap-tured by large health maintenance organizations (HMOs) will make it difficult to survive as an inde-pendent practitioner seeing only fee-for-service patients.

Q.

If independent practice is not a viable option, with what type of group should I be aligned?

A. Many pediatricians are practicing in single-spe-cialty groups. Ideally, you should try to align your-self with a multispecialty group that includes other primary care providers. It is very difficult for a

sin-gle-specialty group to negotiate equitable

compensa-tion for services with a large HMO. HMOS would far rather negotiate with physician groups that include primary as well as specialty physicians.

A rule of thumb is this: if managed care has a 40%

market share in your community, you should join or form a multispecialty independent practice associa-tion (IPA). If you are working with other physicians to organize a rnultispecialty group, primary care physicians should constitute a minimum of 50% and preferably up to 67% of the members.

Q.

Wifi I be required to move my office into a

multispecialty group setting?

A. Not initially. You can function as an IPA and

continue to practice in your own office. However,

negotiations with HMOs must be carried out by a

representative of the group who can negotiate for all physicians within the group.

Q.

There are several HMOs in my community.

How should I go about selecting the ones with which I should be aligned?

A. To be successful long term, an HMO must be

well capitalized. Many of the physician-organized HMOs have failed because of the lack of capital. Large insurance companies and some hospitals have access to capital.

In addition, the rules and regulations of participa-tion should be carefully reviewed. Can referrals be made to pediatric subspecialists? Is physician pay-ment to be made by capitation or fee-for-service? If

by capitation, what services am I obligated to

pro-vide? Are immunizations included in the capitation rate? Can I be dropped from plan? If so, what is the appeal process? How will utilization review be

con-ducted? How many patients am I expected to care

for; how much ancillary support will I have; and can I leave the HMO without restrictive covenants?

Services should be listed by current procedural

terminology codes and should not be subject to

change without renegotiation of the capitation rate.

Q.

When pediatricians are evaluated by an HMO,

what areas receive the most attention?

A. Number of patients seen, number of laboratory and imaging studies ordered, number of referrals, and hospitalization rate. In fee-for-service programs, emergency department visits are also noted.

Q.

Is there any way to insure myseif if an HMO goes bankrupt?

A. No. Be sure your HMO is well capitalized

be-fore joining. Another unavoidable risk is that your

HMO may be purchased and you will suddenly be

dealing with a group that has a different philosophy toward quality of care.

Q.

In our community, there is a small primary

group moving to become a staff model HMO and a

multispecialty IPA forming a physician hospital

at Viet Nam:AAP Sponsored on September 1, 2020 www.aappublications.org/news

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SUPPLEMENT 873

ganization (PHO) with the majority of the medical

community. Which is most likely to survive and

thrive?

A. It depends on:

. Which group has financial stabifity;

. Which provides the highest quality of care; and . Which can capture the largest number of patients.

Q.

My hospital, where I have been a staff member

for several years, is organizing a PHO. What are the

advantages and disadvantages to joining such an

organization?

A. Many hospitals are well capitalized and are

therefore in a position to continue to provide care in a competitive market. Aligning your pediatric prac-tice with a children’s hospital gives you a much stronger negotiating position in dealing with HMOs. A children’s hospital may align itseif with several general hospitals to broaden negotiations to include care of adults as well as children.

If you do elect to join a PHO, be certain that primary care physicians are adequately compensated for their services. This will require negotiation with the subspecialists and the hospital administrators.

Problems with a PHO may include limited

geo-graphic coverage and a large number of specialists.

Q.

if I join a multispecialty group, how can I, as a primary care physician, be certain that I am ade-quately compensated?

A. Get involved. It is absolutely essential that pe-diatrics be well represented on physician boards that are negotiating with HMOs. Without adequate rep-resentation, other physicians and hospitals will get the major share of the premium dollar.

Managed care organizations need primary care

physicians. They are the cornerstone of any managed care system. By serving on governing boards, pedi-atricians are in a strong position to negotiate for adequate payment for child health services.

Q.

How do I arrive at a reasonable capitation fig-ure in negotiating with HMOs?

A. Use the experience of others. Many groups

throughout the country are now accepting capitation payment for services. You also will need to look at your own practice to determine the age and gender mix. For example, it is obvious that more visits will be required for children younger than 2 years of age.

You also may have a practice that includes more

chronically ill children needing more frequent visits. You also should use the resource based relative value scale and the superbill to record visits. That will facilitate the adjustment of the capitation rate the following year.

Q.

How do I protect myself against adverse selec-tion when negotiating with capitated HMOs?

A. This has not been a major problem in pediatrics. With 3000 patients in a practice, it is unlikely that any one practice will have a large number of overusers. If that does occur, the capitation rate should be rene-gotiated the following year. Severity adjustment can

be taken into consideration.

It is also important to spread the risk. Subspecialty care and hospitalization should not be included in the capitation payment to primary care physicians.

Many HMOs also carve out laboratory and imaging services. Some exclude from capitation other benefits such as immunizations, care during the first month of life, or suturing lacerations.

Q.

I am concerned about quality of care. Cost

seems to be the major concern of managed care

or-ganizations. Do you see any way these concerns can be reconciled?

A. It is true that managed care organizations are competing primarily on the basis of cost, but, be-cause of competition, the quality of care will become increasingly important. Patient satisfaction eventu-ally will determine the success or failure of a man-aged care organization.

Q.

How can quality of care be maintained if the HMO requires me to see 50% more patients?

A. Improve the efficiency of your office. This may require an expenditure of funds to establish a corn-puter capability.

Eliminate unnecessary and ineffective procedures. Guidelines of care are being developed by the Amer-ican Academy of Pediatrics. Perform the procedures that are recommended, and eliminate the others.

Use of allied health professionals in the office may be cost effective. It will allow more patients to be seen without compromising quality of care. In deter-mining the feasibility of including allied health pro-fessionals in a practice, their cost must be balanced with their productivity. Place more emphasis on pre-ventive care to reduce the number of sick visits.

Multiple visits may be necessary to treat patients

with chronic or time-consuming conditions. Some

HMOs, compensating on a fee-for-service basis, will

pay the pediatrician a consultation fee for an

ex-tended visit or will pay a fee for service for patients

who require more than 10 visits per year. Some

HMOs will allow referrals of mental or serious psy-chosocial disorders.

Q.

Is there a medical liability risk to the physician if the HMO limits the physician’s choices of therapy?

A. Generally not. The risk is the HMO’s. HMOs have been sued for denying treatments to enrollees.

The physician must document the request for

ser-vices and the denial by the plan.

The American Academy of Pediatrics has

pub-lished a managed care manual that answers many of

the question that were raised at this conference.

Members are urged to purchase this manual to

ob-tam current information on forming physician

groups and negotiating with HMOs.

Conclusion

Presentations at the symposium “Pediatric

Prac-tice: How to Survive and Thrive in the Changing

Health Care System” originated from a concern

about how pediatricians will practice in the

corn-ing century. The papers published in this

supple-ment describe the changes pediatricians likely will

see in the coming years. Changing health needs

will require adaptations in the education of pedi-atric residents and medical practice. Involvement

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874 SUPPLEMENT

in community-health activities will become more

important. Managed-care systems will impose new

demands on practicing physicians. Adapting to

these changes, without compromising quality of

care, will be a challenge to those who provide

children’s primary health care. As pediatricians

and other children’s advocates meet the demands on the business side of pediatrics, it must not be forgotten that every child has the right to a quality

“medical home” that has a foundation built on a

trusting therapeutic relationship between patients

and their pediatricians.

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1995;96;872

Pediatrics

Question-and-Answer Session

Services

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http://pediatrics.aappublications.org/content/96/4/872

including high resolution figures, can be found at:

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entirety can be found online at:

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Reprints

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Information about ordering reprints can be found online:

(5)

Question-and-Answer Session

Question-and-Answer

Session

Q.

Q.

Q.

Q.

Q.

Q.

Q.

Q.

Q.

Q.

Q.

Q.

Q.

Q.

Conclusion

1995;96;872

Pediatrics

Question-and-Answer Session

Services

Updated Information &

http://pediatrics.aappublications.org/content/96/4/872

including high resolution figures, can be found at:

Permissions & Licensing

http://www.aappublications.org/site/misc/Permissions.xhtml

entirety can be found online at:

Information about reproducing this article in parts (figures, tables) or in its

Reprints

http://www.aappublications.org/site/misc/reprints.xhtml

Information about ordering reprints can be found online:

1995;96;872

Pediatrics

Question-and-Answer Session

http://pediatrics.aappublications.org/content/96/4/872

the World Wide Web at:

The online version of this article, along with updated information and services, is located on

American Academy of Pediatrics. All rights reserved. Print ISSN: 1073-0397.

American Academy of Pediatrics, 345 Park Avenue, Itasca, Illinois, 60143. Copyright © 1995 by the

been published continuously since 1948. Pediatrics is owned, published, and trademarked by the

Pediatrics is the official journal of the American Academy of Pediatrics. A monthly publication, it has