In A Consolidating Health Care Market, See How TPI’s MSO Model Is Your Best Solution
So this month marks the 5-year anniversary of the Affordable Care Act, commonly called “Obama Care”.
My how time flies when you’re having fun.
I just heard this week that the health care bill and all the rules and regulations that define it total over 20,000 pages! Think about it. Take 20 reams of paper, stack them up . . . print both sides.
Wow. How would you like that reading assignment?
But as daunting as the 20,000+ page Affordable Care Act is, there are definitely potential benefits hidden in it for independent physical therapists. Think about the opportunities these components can offer –
- Triple Aim
- Patient Centeredness
- Volume to Value Incentive Change
- Financial Risk Sharing
- Patient Centered Medical Homes
Of those changes, the two most significant – and challenging – for independent physical therapy practices will be Consolidation and Financial Risk Sharing.
Therapy Partners’ Management Services Organization (MSO) (See ABOUT US on website) allows our member practices to deliver REAL VALUE in both ways –
CONSOLIDATION – Stability and Strength of Size
by contracting with health plans and ACOs under
Therapy Partners’ MSO single tax ID number . . .
REAL VALUE to health plans and ACOs
RISK SHARING – Build Trusting Relationships with Health Plans and ACOs
by using our vast FOTO outcomes data base, MSO-wide care management processes, and our knowledge and experience in developing value-based arrangements . . .
REAL VALUE to health plans and ACOs
Let’s talk about CONSOLIDATION today.
Look around you. The health care world is integrating. Size Matters.
Check out these 2 Fierce Health article talking about health care consolidation –
Or how about in the physical therapy industry –
The powerful, well-positioned organizations are getting BIGGER. You certainly don’t see hospital systems or independent medical groups downsizing.
They are Merging. Acquiring. Being Acquired.
Why?? Large organizations have the human and financial resources to provide a greater range of services. Provide greater patient access. Create a stronger, more widely recognized brand. Their size creates efficiencies and more effective services – real or perceived. Their scalability allows providing services at a lower cost making profit margins better. But mostly – they gain greater access and negotiating strength with the powerful decision-makers.
Look at the Twin Cities – 3 million people in the 8 county metro area. 4 ACOs dominate the market. Allina, Fairview-University, HealthPartners-Park Nicollet, Health East-Entira. HealthPartners (St. Paul market) and Park Nicollet (Minneapolis based) merged over a year ago creating a Twin Cities-wide ACO. Plus, they are vertically integrated with HealthPartners health plan. Power. The orthopedic market has consolidated and now there are only 4 practices that control orthopedic care. Power. Other markets like Seattle, Pittsburgh, Sioux Falls and many others are similar.
Merging and consolidating under a single tax ID creates a REAL business entity that brings value and strength. Loose knit networks are ultimately too unstable and lack control and accountability to have long-term value delivery and strength.
Check out this article I wrote for Impact Magazine last summer. It explains an MSO in detail and compares that structure with looser knit entities like networks and IPAs.
To organize as an MSO like Therapy Partners, practice owners must agree to use the same billing system, give up their health plan contracts and attain payor arrangements via the MSO contract, and agree to measure outcomes in order to engage in risk sharing contracts. Additionally, and just as importantly, we have found that there are 8 absolutely critical factors that each practice leader must realize and embrace:
1. Powerful Decision Makers.
The ‘powerful decision makers’ are the people who bear financial risk in our market – health plans, ACOs, integrated care systems, self-insured businesses, and individuals who are seeking the providers who bring them the greatest value for their hard earned dollars. Independents must connect with the powerful section makers who decide who can access your services; the ONLY way to connect with them is through VALUE.
2. Size Matters.
The market is consolidating. Health plans and provider groups are getting bigger. It’s getting more challenging for small practices – they are becoming less relevant. None of the significant players in the health care market are saying “how can we get smaller?” Bigger is not necessarily always better but it gets attention and gets your foot in the door.
Value = Quality + Service + Convenience
Total Cost of Care
3. VALUE is King.
You know how you make ‘Bigger Better’? VALUE. Size gets your foot in the door, but VALUE allows you to stay in the room. Value is ALL about the decision-maker. Provider perception of value is meaningless. Decision maker perception is King. Practices MUST determine unique and tangible ways to deliver REAL VALUE to the powerful decision makers: (Objective Quality Outcomes + Caring Service + Convenient Access) / TOTAL COST of CARE. You must drive up numerator and drive down denominator. To create meaningful relationships with powerful decision makers you must deliver VALUE to THEM – and this VALUE is based on THEIR NEEDS.
4. Divide and Conquer.
Up until the last 4-5 years, health plans primary concern was cost. Now it is Value. If you organize independent practices as a loose knit network, independent practice association (IPA), or even an MSO, you better be able to deliver measurable value, hold every clinic and provider accountable for delivering defined value, ensure every clinic and provider shares the organization’s values and vision, and make certain every member puts the team ahead of themselves and their practice. If health plan leadership senses that your organization is ‘a bunch of individuals’ and/or if they do not see tangible value in your service delivery, it will be easy for them to take efforts that will break up your organization of independent practices.
5. House of Cards.
The tighter practices, clinics, and providers are tied together, the less likely you will be ‘divided and conquered’. If practices have an option or ability to leave for a better deal or at the threat of being left out, they will leave. At that point you don’t have strength of size and you will be ‘divided and conquered’. Once again you will be just be a bunch of small, independent, weak organizations. Size Matters but only if Size is Sustainable. Loose knit networks or IPAs are weak and vulnerable. And health plans and ACOs know that.
While Value is King, Trust is Glue. Members of an organization must trust each other; and the powerful decision must trust your organization – and each member of you organization. Members must be committed to each other. They must share the same values, share the same vision, display your mission, and embrace your strategies. They must ALL behave with integrity and respect. One un-trustworthy or untrusting member can bring down a whole organization. If there are practice owners you don’t trust or share the same values with, don’t include them in your discussion. They will try to bring the organization down.’
However you come together, EVERY member must see the others as TEAMMATES. You are allies. You are NOT competitors. If anyone views any or all of the others as competitors, they will hold you back, destroy trust, and bring the organization down. You must take the time and effort to build your MSO as a high performance team built around these 7 characteristics: Shared Purpose, Involvement, Commitment, Trust, Communication, Process Efficiencies, and Continuous Improvement. This takes time, understanding, and commitment to building a team.
You must take the time to develop your own and every team members’ leadership skills. Without leadership, you will not develop a team, you will not develop ongoing trust, you will not develop a sustainable strategy. This is critical and also time consuming but very rewarding. Check out The Leadership Edge on our website for some insight. Most physical therapists view leadership as a good concept but not worth the time and effort to develop, nurture, and measure it in meaningful ways. That is a BIG mistake.
Therapy Partners MSO has been successful because our leadership and practice owners understand and embrace these 8 concepts.
Want to get BIG yet start or maintain your independent practice – the MSO model may be your best solution.
– Jim Hoyme, Co-owner of TPILeave a reply →