Eugene Hoekendorf's column explores the range of new information-gathering needs a PHO, IPA, or medical group must consider under capitation and what kinds of internal systems need to be put in place to manage the contract. This is the second of two parts. The first part, which discussed core competencies, ran in the July issue.
Intermountain Health Care dominates its market like few other health systems. The sprawling nonprofit system manages to stay well ahead of the competition by: selecting physicians who deliver both quality and financially efficient care; offering employers varying levels of choice and price in insurance plans; leading the way in information technology advances.
This article is the first of two regarding capitation contract management. In this installment, we examine the factors that affect financial performance under a capitation agreement and how technology can play an important role in improving profitability. In part two, we will explore the range of new information-gathering needs a medical group, independent practice association, or physician-hospital organization (PHO) must consider under capitation and what kinds of internal systems need to be put in place to manage the contract.
Physician-hospital organizations (PHOs) are like people--they all make mistakes. Some PHOs recover from their errors and go on to become highly successful organizations. Others fall by the wayside. Success depends on some of the following methods: creating the PHO for the right reason; letting market forces shape the PHO instead of internal politics; mastering core competencies; communicating effectively and repeatedly; putting PHO interests before self-interests; having primary care physician buy-in.
Health care today is on the doorstep of an era where proving quality of care will be instrumental in attracting patients and contracting with payers. While the information systems that do this are still progressing, health systems that want to stay ahead of the curve should prepare to document the quality of their care.
The Joint Commission on Accreditation of Healthcare Organizations in Oakbrook Terrace, IL, has begun phasing in new accreditation requirements that, for the first time, look at quality of care. Health systems are expected to have little or no difficulty meeting early reporting requirements. Over the next few years, however, the reporting requirements are expected to become more rigorous. Experts in the field expect such public reporting of outcomes to be commonplace in the future.
Congress is considering giving physician-hospital organizations (PHOs) and other provider-sponsored organizations (PSOs) the right to contract directly for Medicare managed care. But the feds aren't likely to loosen the standards by much. All PSOs, including PHOs, will face a tough screening process. Hostile market factors also could swerve some providers away from controlling physician-owned risk plans.
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