Health Plan Offers Docs Employment Alternative on Louisiana Medical News

Health Plan Offers Docs Employment Alternative

By: TED GRIGGS

Carol Solomon

Electronic health records mandates. Cuts to Medicaid and Medicare payments. The adoption of ICD-10s. The coming competition from Accountable Care Organizations.

With small practices under these and other pressures, many physicians are looking for an escape route. Typically that means working for a hospital or joining a much larger practice.

However, People’s Health, a Metairie-based, doctor-owned Medicare Advantage plan, is trying out a different model:

An insurer-owned clinic that lets primary care physicians practice medicine without worrying about the everyday hassles of managing a practice.

Although acquiring a clinic would appear to give People’s Health the opportunity to establish its own ACO, Chief Executive Officer Carol Solomon said the company’s major concern is addressing the lack of primary care physicians.

Without those doctors, People’s Health has nowhere to send its members, Solomon said.

“If I don’t have one, I don’t have any ability to grow,” she said.

People’s Health is a Medicare Advantage plan. These plans generally provide extra benefits and lower co-payments than the original Medicare plan. People’s Health has 44,000 members in 14 parishes stretching from New Orleans to Baton Rouge.

One-third of the nation’s 750,000 physicians are over 55 and are expected to retire within 10 years, according to the National Center for Policy Analysis, a nonprofit think tank based in Washington, D.C. Meanwhile, the American Academy of Family Physicians has forecast a nationwide shortage of 40,000 family doctors by 2020.

Solomon said when she talks to doctors in their mid-50s, she hears the same thing: “That’s it. I’m retiring.”

Physicians don’t want to have to deal with the costs or the hassles involved in implementing electronic health records, Solomon said. They don’t want to worry about learning new codes for every single diagnosis under the 10^th version of the International Classification of Diseases and Related Health Problems.

Many of the doctors in People’s Health’s network are going to work for hospitals, Solomon said. Those physicians don’t want to think about the business end of practicing medicine anymore.

Med school graduates, who might not be bothered by those changes, don’t want to work the same hours that their fathers might have, Solomon said. Those doctors want to leave the office at a more reasonable time, and they don’t want to work on the weekends.

“So we’re having to look at a model that makes it attractive for someone to go into primary care,” Solomon said.

People’s Health narrowed it down to two choices, Solomon said.

One was up a practice management subsidiary to run the business for the doctor, Solomon said. The practice management firm would contract with hospitalists so the physicians didn’t have to get up in the middle of the night or work the weekends if their patients are hospitalized.

The other choice was for People’s Health to set up its own clinic and employ its own physicians, Solomon said. Some patients are more comfortable with going to a free-standing office; some are more comfortable with a one-stop shop approach, with primary care physicians and specialists at the same location.

Enter Stanocola Medical Clinic, a Baton Rouge institution. The clinic was founded by Standard Oil Co. (now ExxonMobil) in 1924 as one of the country’s first pre-paid medical plans. In recent years, the clinic has struggled financially and filed for U.S. Bankruptcy Court protection from its creditors in September.

When Stanocola announced it had given up on reorganization and planned to liquidate, People’s Health stepped in.

At press time, the health plan expected to complete the clinic’s acquisition by the end of January.

Solomon said buying an existing clinic costs around $3 million to $4 million, while double that amount would be needed to start from scratch.

People’s Health expects to concentrate on Stanocola for the first year and get its systems down pat, Solomon said. Once the model is firmly established, People’s Health can probably handle two clinic acquisitions or start-ups a year.

Solomon said there won’t be a problem finding locations.

Since word spread of the Stanocola deal, physicians have been calling the health plan.

“I’ve been getting calls from them saying, ‘If you do something like that on the Northshore (of Lake Pontchartrain), I’d like to go work for that clinic,’” Solomon said.

Physicians are telling her they would close their practices and take their patients with them to the new location, Solomon said.

“We’re looking at those calls as a real opportunity,” said Solomon.

The clinics become a lot more successful in a shorter period of time if People’s Health is bringing in doctors with established practices and not just hiring new physicians, according to Solomon.

The potential sites are anywhere there’s a shortage of primary care physicians, which basically is everywhere, she said. People’s Health will make sure that the Medicare-eligible have access.

Meanwhile, People’s Health is looking at building a practice management service so that it can keep doctors’ offices running independently if that’s what health plan members want, Solomon said.