Most Valuable Players

Most Valuable Players: TMA PSO Empowers Physicians in New Health Care Models

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By Amy Lynn Sorrel
Associate Editor

The pressures of today's health care system often force physicians to undervalue their practices in a fire sale to cope with mounting regulatory and administrative burdens and diminishing fee-for-service payments. But health care consultant John G. Nackel, PhD, says the movement toward accountable care puts physicians in a unique position to meet increasing demands for high-quality and low-cost care.

Hospitals haven't been able to do it, and payers can't do it alone. That makes physician practices more valuable than ever, which means they may want to reconsider selling or, if they do sell, reconsider their worth for the crucial role they are poised to play in new value-based models. Whether those models are hospital-, payer-, or physician-driven, the patient-physician relationship remains at the heart of the health care delivery system, and collaborative, accountable care entities rely on physicians as those with the most influence on health care decisions, costs, and quality outcomes. 

Enter the Texas Medical Association's Physician Services Organization (PSO), which will equip practices with the tools and strategies they need to remain competitive and in the driver's seat in the future health care environment. The PSO is still under development and expected to launch early this year. 

"In all of these models we are talking about — accountable care organizations [ACOs], medical homes, bundled payments — physicians are at the helm of the decisionmaking process with respect to patient care. They all require physicians to take significant accountability in that process, and you will not see the [desired] results [of the models] achieved without physicians playing a significant role," said Dr. Nackel. His California-based consulting firm, Three-Sixty Advisory Group, is helping TMA develop the PSO.

Ultimately, the desired result is higher quality care at a lower cost. It's also called a value-based system, in which payment is driven not by the number of services performed, but by patients' overall health. And whether it's getting an electronic medical record system up and running to collect information on patients' health or coordinating with other physicians to close identified gaps in care, practices must transform to meet today's demands for more efficient patient care, says Dan McCoy, MD, TMA Board of Trustees member and chair of the PSO task force.

"Payment methodologies for health care are changing, and part of that is prescribed by federal health system reform and certainly the movement toward accountable or value-based care. So the purpose of the PSO is to develop solutions for physicians who want to participate in those innovative payment methods and retain some autonomy around their practice location and style," Dr. McCoy said. "What we are talking about is empowering physicians with the technology to take care of patients in the context where they are achieving higher value. TMA brings to the table not just that, but also the culture around providing the physician leadership, aggregation, and governance needed to empower the technology."   

Physician Influence 

The timing for a PSO is just right, says Dr. Nackel. Health care reform in some form is here to stay, and of all the major players — physicians, hospitals, and payers — physicians are most aligned with the goals of any collaborative model: improving quality, reducing costs, and improving patient satisfaction. 

Most of those savings and improvements come from a few key areas:   

  • Preventing inpatient admissions and readmissions; 
  • Reducing testing, surgeries, and other clinical procedures; and
  • Cutting down on administrative costs.  

The problem for hospitals developing accountable care entities, Dr. Nackel says, is these objectives are typically at odds with their typical economic goals. Yet, most of the commercial and Medicare ACOs today — more than 70 percent — are led by hospitals or health systems.  

"For a [hospital-driven] accountable care model to work, the hospital has to reduce its own admissions. But it generally has no revenue replacement. For everything they reduce, they actually reduce their revenue stream and profitability. So the ACO is destined to failure," he said, adding that it's no wonder hospitals are on a buying spree of physician practices. Hospitals with their infrastructure — buildings, equipment, technology — certainly have a role to play in propping up accountable care models. "But we're going to have very few successes in the long run if so many [accountable care entities] are hospital-driven."

Payers, too, have a significant role to play, "but not as the lead," Dr. Nackel said. They can be collaborative partners in driving value-based care through contracts that provide financial incentives to both physicians and hospitals. Payers also can capture and warehouse data on patients' health and share that information with physicians and hospitals so they can target complex, high-cost patients and identify preventive treatments. 

Payers' downfall, on the other hand, is they are not on the front lines of providing care. And the revolving door of patients — who typically drop or change their membership within three years because of job or life changes — gives payers little incentive to invest heavily in disease prevention. 

So when it comes to long-term population health management and individual patient management — detecting and preventing disease, ordering treatments or hospital admissions, deciding discharge timing — physicians are the ones with the most direct influence on cost and quality and ultimately on the success of any value-based care model, Dr. Nackel says. Plus, physicians — primary care, in particular — are in short supply but high demand in ACOs, medical homes, and other value-based care models.

As they develop their future business strategies, physicians need to understand the influence their practices hold in the changing market, he added. "I can't say what's best for every individual physician. What I can say is, what's best for the industry and long-term population health management is that physicians remain as physician groups, as opposed to being owned by hospitals and payers, and that they focus on what they do well, which is patient care."

Transforming Physician Practices

TMA's Physician Services Organization is a new TMA business that will help physicians do exactly that. The PSO will offer products and services to enable practices to improve their performance; streamline and improve administrative functions and technologies; and return physicians' primary focus where it belongs: patient care. 

Many practices lack the organization and infrastructure hospitals and payers already have to take on value-based care models. Dr. McCoy says that's why TMA's PSO will provide the missing link to help Texas physicians level the playing field and transform their practices to pursue new payment and delivery models. 

Whether practices choose to do that independently, as part of a large group, or through clinical integration of multiple independent practices, the PSO has identified four categories of products and services to meet practices' varying goals and levels of sophistication. They are:   

  • Practice transformation: tools and services to strengthen practice viability and prepare practices for new payment models, including optimizing staff workflow, strengthening billing and collections processes, and making use of new technologies to improve patient care and compliance.
  • Clinical integration: services and technologies for physician network development, network administration, and contracting that provide administrative support to existing physician networks and help for independent practices that want to collaborate for contracting and managing population health.
  • Value-based care models: technology, strategies, and staffing to help practices secure value-based contracts or meet requirements for incentive payments, including case management; care management; population, quality and utilization analytics; and patient engagement. 
  • Enterprise solutions for physician networks and groups, including payer functions for those that negotiate direct contracts with employers and other payers, and technologies that enable health information exchange among the health community.  

Dr. McCoy describes entities like ACOs, patient-centered medical homes, health care collaboratives, and independent practice associations as vehicles that allow doctors to drive health care change, participate in new payment methodologies, and take better care of a population. TMA is not creating the actual vehicle, like an ACO. "TMA is creating the tools and the culture sets that empower those vehicles. The PSO is really the engine." 

He also emphasizes that the new health care market requires physician leadership, something only TMA can provide. The PSO is more than a collection of technology to help physicians participate in a value-based world: "Without the governance, aggregation, and leadership within this independent physician community, the technology is not powerful. That's what TMA brings that is unique among its competitors in the PSO market."  

To Sell or Not to Sell? 

In his white paper, "Valuing a Medical Practice: Now Worth More Than Ever," John G. Nackel, PhD, a consultant to TMA's Physician Services Organization, helps physicians understand their worth as they strategize for a rapidly changing health care environment.

His take: Physician practices are now more valuable than ever as the health care system veers away from fee-for-service and toward accountable care models whose success hinges on the patient-physician relationship. Most purchases of physician practices thus far have been based on fee-for-service earnings. But that system is fading in favor of value-based models in which payment is driven not by the number of services performed, but by patients' overall health. So whether or not physician practices decide to sell, "they need to be valuing their practices under the future state, not the current state" of the health care system, Dr. Nackel says. 

Download the white paper on the TMA website

Amy Lynn Sorrel can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email.


How Your PSO Can Help You

Regardless of your practice style, TMA's Physician Services Organization will be able to help you prepare for the accountable and value-based care payment and delivery models that are quickly becoming a fixture in today's health care market. 

If this is you, TMA's PSO can help:   

  • You know some of your practice's costs are too high, but you're not sure which ones or how to best control them.
  • You're working 15-hour days, seeing more patients than ever but making less than you made 20 years ago, and you can't figure out why.
  • You're a new member of an accountable care organization and don't understand how to use the care management nurses assigned to your practice.
  • You've just received your first clinical outcomes spreadsheet for your Medicare patients and don't know what it means to you or your patients or to your bottom line.
  • Twenty-five physicians in your community want to create a clinically integrated network, and you want to know what that entails and whether you should join. 
  • You're part of a clinically integrated network, on the hook to drive efficiencies in patient care, and you need to know how to use the network's data to manage referrals appropriately.
  • Your community is struggling to develop a clinically integrated network, but there is no consensus on how to proceed and no strong physician leadership.  

The PSO is still being developed and expected to launch early this year.