With the consolidation of the health care industry into regional/national mega managed care companies, doctors today are increasingly looking toward group practice as one means of creating administrative economies of scale and marketing clout as a means of competing. More and more doctors are aligning themselves with other primary or specialty providers to create leverage in the marketplace. Is or can this strategy be a viable alternative for the chiropractic profession?
For most, if not all, medical doctors the concept of group practice is part of their educational development. As students, unlike chiropractic doctors, they learn in hospitals, doing grand rounds as interns and residents. Upon graduation and licensure, most specialists are absorbed into small or large group practices where administrative costs are shared and profits divided based on output. Within the past few years, primary care doctors have also begun to embrace the idea of creating group practices that merge together to form IPAs or PHOs with local hospitals as a means of negotiating with managed care plans. The idea of central clinics that offer either primary or specialty care, or a combination of both has proliferated. For the managed care companies, it may be more efficient and logistically just as effective to have 20 offices of five doctors, than 100 offices with just one doctor. By reducing practice overhead by 30-40%, it makes it easier for doctors to accept lower reimbursement. The doctor comes out ahead (a net gain in practice income) and the MCO can offer a less expensive program, hopefully resulting in a gain of the marketplace.
Does the practice of chiropractic lend itself to this type of practice integration? From the standpoint of the individual and from that of a network manager, it can and does. So why is it not happening more frequently? Ego and common sense sometimes get in the way. From a practical standpoint, chiropractic does not have the opportunity to form multi-specialty groups unless you think that doctors certified in orthopedics, neurology, radiology, sports and occupational medicine constitute separate and distinct provider types.
In discussions with chiropractors, it is not clear to me that the type of care rendered between chiropractors, regardless of their training or certification, is really different. Would it make sense to aggregate 6-10 chiropractors with different certification in one office in the hope that they would cross-refer based on perceived expertise? Probably not. While it may make some sense to integrate chiropractors with MDs and PTs in one office, it may not be as effective with just chiropractors.
The primary obstacle to multi-chiropractor clinics may have more to do with professional ego than practical necessity. The overwhelming majority of chiropractors are in private and individual practice and may not be comfortable subsuming their identity for that of a group practice. Most are not comfortable being in a situation where their treatment is reviewed and evaluated by their peers. The challenge is to demonstrate that having a number of doctors working together (not just sharing space) can offer more efficient administration while improving and enhancing the quality of care. In the near future, many of the managed care companies will look at new network options, including group practice associations. For many chiropractors, this could represent a more efficient opportunity to participate in managed care.
Worker’s Compensation: New Opportunities
As the managed care industry further expands its presence, the next great market for development is worker’s compensation. Most managed care companies (MCOs) and third party administrators are looking at the possibility of applying the theories and practices of managed care to the worker’s comp arena. Most contract proposals that MCOs, such as Managed Chiropractics, are now bidding on have a worker’s comp component. More and more MCOs are looking at ways of offering managed care services to their worker’s comp clients and see this as a large growth area.
What does this portend for doctors in general and chiropractors in particular? More opportunity to treat patients that otherwise might not have taken advantage of or had access to your services. In many plans there will be a gatekeeper directing treatment. In some cases that gatekeeper may be a chiropractor working in conjunction with a medical doctor.
It is not clear that the primary effect among managed care companies is to reduce costs by seeking discounts from the state-approved fee schedule. Most companies are looking at ways to change practice behaviors and treatment patterns. It is their thinking that it’s better to pay more per visit and have fewer visits than to pay less per visit and have more visits. While the net payment to the doctor may be the same, the dynamic surrounding the care is different. The emphasis is on efficient care. This approach rewards those doctors capable of treating less and getting better or similar results than those who treat more often. For the doctor, it is clearly more efficient to treat less and be paid more. Utilization Review will be similar to group health, with the emphasis on returning the worker sooner, which is why most payers are willing to pay more for less visits if it indeed reduces costs.
In the future, managed care companies will not distinguish between a sprain/strain injury that is either job or not job or auto related. The type and cost of treatment will be the same and the provisions for rendering that care will be the same–a seamless 24 hour approach to coverage. Managed Chiropractics, like many MCOs, is negotiating with a number of worker’s compensation administrators and claims processing companies to develop a more comprehensive and cost effective approach to rendering treatment. We are working with the allopathic community to identify specific conditions requiring care and are designing referral protocols that will reduce treatment overlap. It is a changing market and you must be prepared to accommodate these changes if you are to successfully compete in the marketplace.
Peter Caplan is Vice President of Marketing of Managed Chiroprac-tics, Inc., of Denver, Colorado, a national MCO. Please contact him at 303-322-7272.
