THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, March 5, 1995 TAG: 9503040295
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DEBRA GORDON, STAFF WRITER
LENGTH: Medium: 70 lines
Eighteen months ago, with health care reform in high gear, a group of Hampton Roads pediatricians and administrators from Children's Health System began meeting to figure out how they could keep pediatric care a high priority in the debate.
How, they wondered, could they preserve pediatric health care in a market dominated by adult players? How could they, who consume only 12 percent to 15 percent of the health care dollar, influence how pediatric care is delivered in the community? And, more importantly, how could they ensure they were delivering not only high-quality, but also cost-effective, care - the byword of reform?
National reform died. But that group of doctors evolved into the for-profit Network for Child and Adolescent Health, a physician hospital organization representing nearly every pediatrician and pediatric specialist in the region, as well as Children's Hospital of The King's Daughters. Its purpose: to contract directly with health insurers, and to provide the training and tools so its members can succeed under managed care.
It's part of a growing trend among children's hospitals. One-third of the 130 members of the National Association of Children's Hospitals and Related Institutions have begun PHOs.
The health organizations are a response to the emerging managed-care market, a means for pediatricians to negotiate more favorable reimbursement rates and for hospitals to count on more referrals.
``The need of the market is for cost-effective medicine,'' says the PHO's executive director, Lawrence Bates. ``And we believe that we can come together and function, in essence, as a small-group practice.''
That means more clout when it comes to contracting, says Bates, also the hospital's vice president for managed care. Certainly more clout than a five-member pediatric group has. And all contracts are exclusive, meaning the insurance company agrees not to contract with any other pediatric providers in the region.
The PHO has four contracts so far, including one with the Rockville, Md., managed-care provider MDIPA, which also operates a Medicaid HMO here.
MDIPA capitates pediatricians in the PHO - paying them a fixed amount each month for every patient who chooses them as their physician, regardless of the amount of care provided. It reimburses the hospital and specialists according to a contracted fee schedule.
But Bates expects the HMO will capitate the entire PHO within three years - paying one monthly amount for every enrolled child and leaving it up to the PHO to divide the money.
That's true managed care.
For when that happens, the hospital and the physicians will equally share the risk for that health care dollar.
This makes education a priority, notes Robert Fink, PHO president. Education for the patient - as in asthma management classes - and for the doctor, as in the benefits and costs of new medications and procedures.
The PHO will also develop practice guidelines, called clinical pathways, to help physicians manage their patients' care more efficiently.
It won't be cookbook medicine, Fink promises, but simply the best way to manage patients with certain conditions.
The PHO will also track referrals to specialists, treatment rates and medical outcomes on both the inpatient and outpatient sides. And members will provide feedback to each other, he said.
``It's easier when you have a system like a pediatric PHO for a group that consists of all physicians to be able to give feedback to one group of physicians where we think they can do things in better quality or in a more cost-effective way.'' by CNB