ATLANTA_ In response to power struggles from managed care organizations, many hospitals are creating primary care networks (PCN) to give them stronger leverage over HMOs.
The topic of PCNs was discussed last week at the annual conference of the Society for Strategy and Market Development held here.
PCNs give hospitals, especially those forming integrated delivery systems, maximum control over physician referral patterns, patterns of care and financial performance -- all the privileges HMOs currently have with their own PCNs. These physician networks are also revenue generators and can eventually increase referrals to the hospital because affiliated doctors in the network will refer back to their home centers.
To help hospitals effectively market these new services to the payors --managed care companies --consultants from Chi Systems, a leading independent healthcare consulting firm in Philadelphia led a seminar at the convention.
In order to get a better handle on the market, Chi Systems consultants recently conducted an informal study and profile of managed care companies. While the number of HMOs surveyed was relatively small, analysts said they felt the information was right on track with the feeling of the marketplace. Of the 18 managed care companies surveyed, 12 said they would contract with an outside PCN while 6 said they would not.
"The reasons for not contracting included: their own provider network was full; there was a reluctance on the part of the physicians; the network was dominated by specialists and the PCN had insufficient experience," said Graig Holm, vice-president of Chi Systems. "The desired traits were being well organized and having a proven track record."
Managed care companies wanted six features of PCNs to be complete before they would even consider adding them to the network: geographic accessibility, high numbers of primary care physicians, quality controls, existing infrastructure to process claims, exclusivity and acceptance of risk on the part of the hospital.
Geographic accessibility includes knowing where your HMO's enrollees are located and contracting with physicians located in those areas. Before approaching a managed care company, Holm suggests reconfiguring your primary care physician locations to meet their needs.
While new PCNs will have difficulty showing a proven track record, they can show they are well organized by establishing a governance and reporting system that tracks correct implementation and management of services, said David Zuza, senior consultant with Chi Systems.
"They also want you to be sophisticated by performing your own credentialing, doing claims processing and understanding how to manage risk," said Zuza.
While price is always important to managed care organizations, many are looking to other qualifications, including quality and exclusivity.
In order to secure contracts, PCNs must be evaluating themselves with patient satisfaction surveys, credentialing, NCQA standards and clinical outcomes to show they are a high quality organization.
"By just saying in your promotional materials 'affiliated with a high quality hospital' does not cut it anymore," said Holm. "Has any hospital ever said they were a low-quality hospital?"
Managed care organizations also want you to become exclusive contractors and "not have contracts with every guy in town". Zuza said that might be a viable partnership if the HMO is large enough.
"You have to ask yourself what type of relationship you want," said Holm. "Either a partner or a vendor and that will motivate much of your marketing efforts." (Chi Systems, 215/542-1000)