THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Thursday, January 16, 1997 TAG: 9701160240
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY DEBRA GORDON, STAFF WRITER
LENGTH: 125 lines
In a move to strengthen their bargaining position with insurance companies, 50 obstetrician-gynecologists from Williamsburg to Virginia Beach have formed the region's largest women's health group.
Mid-Atlantic Women's Care, which combines 11 individual OB-GYN groups, marks the first time specialists in Hampton Roads have joined forces in such numbers to reckon with the growing influence of managed care.
The new arrangement is designed so Mid-Atlantic doctors can negotiate better deals with insurance companies, including higher reimbursements, increased control over patient care and greater input into the direction of women's health care in Hampton Roads.
``There's no way this would have happened five years ago,'' said health care consultant J. Landy Damsey, coordinator for Mid-Atlantic and vice president of the Norfolk-based firm Damsey and Associates.
``Today, the physicians are realizing that in order to operate in a managed-care environment they have to pool their resources and offer a full spectrum of services.''
The group will encompass more than half of all female patients enrolled in most private insurance plans, said G. Theodore Hughes, a Mid-Atlantic member and Norfolk OB-GYN.
Health maintenance organizations use volume as a negotiating tool in contracting with doctors. They often limit the number of specialists so they can funnel more patients to participating doctors. In exchange for a high volume of patients, doctors usually agree to discounted payments.
A doctors' group that covers hospitals in every city, offers diverse physicians and provides ancillary personnel, such as nutritionists and midwives - all of which Mid-Atlantic does - could become an HMO's provider of choice.
``If all our needs can be met by one group, that would be wonderful,'' said Michael Dudley, president of Sentara Health Management, which owns two of the region's largest HMOs, Sentara Health Plan and OPTIMA.
Most Mid-Atlantic doctors already do business with Sentara's HMOs under existing contracts; as these contracts expire, they plan to negotiate a new contract for the entire group.
Mid-Atlantic, which includes such well-established practices as the Norfolk-based Group for Women and the Virginia Beach-based Complete Women's Care, began operating earlier this month.
Although its doctors will remain in their current offices, operating under their current practice names, the doctors and their staffs will be Mid-Atlantic employees. They will share retirement and benefit packages, combine billing systems and coordinate purchasing arrangements.
``We're back in charge again,'' said Mid-Atlantic President Holly S. Puritz. ``We'll have more say in how the health care dollar is spent for patients. We'll become more efficient in how we do things so we can save some dollars. Hopefully, we'll give our patients more thoughtful care in how we're managing and taking care of them.''
The changes will be invisible to the patient, Puritz said.
``They will still see their individual physician in their individual office,'' she said.
Doctors were chosen for the practice based on location, hospital coverage and the way they practice, Puritz said. Eventually, other physicians may be invited to join.
One doctor whose group was not invited to join, Henry Demkowski of the Norfolk-based Center for Obstetrics and Gynecology, is taking a wait-and-see approach.
``I have no problem with it,'' he said of Mid-Atlantic. He said he's not overly concerned about the impact Mid-Atlantic might have on his practice.
Ultimately, he said, it comes down to providing choice for the patient. ``Will the patient be satisfied if (the insurance company) selects fewer physicians for them to see?''
The merger lets Mid-Atlantic doctors contract as a single entity with insurance companies. Federal antitrust regulations prohibited them from contracting as a single group when they were 11 separate practices. Yet the combined practices of Mid-Atlantic don't comprise a large enough market share to trigger other antitrust regulations.
The group's clout comes from the sheer volume of patients it will have, Hughes said.
``Right now an insurance company comes to a group or a doctor and gives them a rate schedule and says, `Are you willing to accept these rates?' There's very little negotiating power, even for a group of six or eight doctors,'' Hughes said. ``If you don't take it, they go to the guy down the street.''
But with a ``super-group'' such as Mid-Atlantic, ``an insurance company would be hard-pressed to turn that group down. They would have too many irate patients.''
Sentara's Dudley, who used to work with such groups in his former position at Kaiser Permanente Insurance Co., said he ``unequivocally supports'' Mid-Atlantic.
Experience elsewhere in the country shows that when single-specialty physician groups merge, the quality of care improves, he said. ``In a collegial fashion they will work with each other, sharing information with each other, and learning from each other in ways they wouldn't if they were maintaining separate distinct practices.''
Mid-Atlantic will be in a better position to command higher rates, he agreed, but it still will need to remain competitive in the market.
``To the extent that they get a smidgen better than competitive rates, we would hope they would offer better service and quality in return.''
Hughes expects Mid-Atlantic to do just that.
For instance, he said, if one doctor consistently has shorter hospital stays and fewer complications for hysterectomies, that doctor can share the information with other Mid-Atlantic members, thus improving the group's overall quality. ILLUSTRATION: [Side Bar]
What happened?
Fifty obstetrician-gynecologists representing 11 different
practices merged into one large practice called Mid-Atlantic Women's
Care. The practices cover a geographic region stretching from
Williamsburg to Virginia Beach.
Why did it happen?
With a larger share of the market, and a larger number of
patients, doctors in Mid-Atlantic Women's Care would have more clout
when they negotiate with insurance companies, particularly
managed-care plans.
What does it mean for the patient?
Initially, nothing. The patient will still see her same doctor,
in the same location. Eventually, patients may benefit from improved
quality of care as the doctors learn from each other.
The patient may also benefit from the continuity that a
``super-group'' such as Mid-Atlantic can provide. If the patient
chooses to change insurance plans - or moves to a new insurance plan
because of a job change - chances are good that her new insurance
plan will also contract with doctors in the group.
KEYWORDS: OB-GYN MERGER MID-ATLANTIC WOMEN'S CARE