Integrating Physicians During the Healthcare Reform

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Neil M. Pressman, FACHE, president, Presscott Associates, discussed a variety of business models for healthcare network management in his presentation at the National Association of Managed Care Physicians' Spring Managed Care Forum 2014 in Orlando.

Neil M. Pressman, FACHE, president, Presscott Associates, discussed a variety of business models for healthcare network management in his presentation at the National Association of Managed Care Physicians’ Spring Managed Care Forum 2014 in Orlando. He has over 20 years of experience in the area, having previously had a large role in the creation of a managed healthcare network through The Traveler’s Insurance Company.

Mr. Pressman pointed out that while things haven’t changed all that much since the 1990s, he does see a great deal of positive momentum. In particular, in all of his years of experience, he never saw providers and payers working together as much as they do now. However, with healthcare spending in the United States presently accounting for roughly 18% of GDP—and twice that of other industrialized countries—we cannot afford to continue the current inflationary trends in healthcare practices.

For 2013, one organization attempted to claim 90% of their assets as goodwill, but they were rejected. The IRS and the Office of the Inspector General are getting very aggressive in this area. These kinds of misappropriations can lead to civil penalties or worse. Healthcare management must be diligent, making sure there is correct reporting.


Mr Pressman has also observed that a shockingly high number of hospitals do not even have an adequate IT infrastructure for monitoring their networks. This is absolutely critical in these times to ensure the long-term survival of an organizational healthcare system.

A projected model of reimbursements was presented that showed the more favorable change of risk burden extending to the provider from the patient. These reimbursements are evolving from the fee-for-service model to the more value-based pay-for-performance, shared savings, and population health management model(s). Drivers of this evolution include legislators, employers, and consumers, as well as marketplace trends and advances in relevant technologies.

Future challenges in healthcare reform include a burgeoning Medicare population, limited resources, cost pressures, quality improvement requirements, and ever-increasing numbers of those who are and will be covered due to healthcare reform. In particular, Mr Pressman said he has observed increasing competition for independent physicians.

According to Mr Pressman, new cloud-based technologies, which currently are largely based in Europe, are accelerating progress in healthcare network management. And these technologies are starting to make their way into use in the United States.

A wide variety of organizational models were presented and addressed by Mr Pressman. Those included the friendly PC model, the medical foundation model, the faculty practice plan, centers for excellence, and accountable care organizations (ACOs). The family PC model is a professional LLC or entity that brings many doctors together, but these can sometimes be complicated by state tax laws. When state law precludes the use of a family PC model, the tax-exempt medical foundation model is frequently the chosen option. Faculty practice models are generally found in academic health systems, which tend to be very large, and usually include community health service centers. The centers for excellence model has been focused on particular procedures, most commonly centered around orthopedics, geriatrics, neurosurgery, or cancer. They involve teams of physicians and administrators all focused on promoting the best care practices. The ACO attempts to tie quality-of-care metrics to payment while bringing the healthcare continuum under 1 tax ID.

Ultimately, Mr Pressman stated that the essential elements for successfully integrating infrastructure require strong leadership from physicians, and a team that will champion the cause.

He also pointed out that bundled payments must be integrated into the process, but they cannot be executed on a piecemeal, manual basis. Furthermore, effective corporate infrastructure must be in place in order to encourage physician loyalty and increase staying power.