Primary Care Physicians Can Regain
Control of Medicine

by Keith Borglum

The Problem

Primary Care Physicians (PCPs) are justifiably frustrated and angry. Their income has been decreased through discounted fees. Their clinical autonomy has been taken away by uninformed case managers and the value of their practices have been reduced by control mechanisms. At the same time, the paperwork, hassles and expenses have increased. To make matters worse, large organizations are now trying to control or buy PCP practices and take over control of medicine. If you look carefully, many of the benevolent-sounding organizations actually take 50% or more of ownership and control. If any combination of non-PCP investors gain more than 30% of equity or control of the business entity, PCPs risk forfeiting control of their futures. Primary care physicians and their patients have been the losers in many of these models.

The Solution

Few PCPs understand the true importance of their role in health care delivery, nor do they fully appreciate the economic value of their practices in the new managed care environment. Those who do are creating PCP-owned and controlled networks that promote high-quality care for patients with appropriate compensation and autonomy for PCPs. PCPs are in the best position to manage care in their communities and to appropriately control costs. Because of this, they should control more of the financial and emotional rewards for their efforts. Creating the right organization is the beginning of the solution.

The Most Important First Step

The first critical step to PCP-led reform should be the creation of a primary care network that is regional, community-based, democratic, incentivized and owned and controlled by PCPs. This PCP group can then contract for full capitation with HMOs and employers, placing the PCPs in control of reimbursement for patient care, case management, committee work, risk management, etc. Hospitals and specialists are then selected as value-adding partners. They must be carefully chosen for their ability to provide high-quality care while efficiently managing costs. Their compensation must be fair and based on their abilities to share risk and co-manage patient care.

By creating a separate management services organization (MSO) as a vehicle for contracting, investment capital can be obtained, thereby minimizing the PCP's financial investment and risk. This PCP-owned and-controlled corporation will give physicians stock in a company that has potential for significant appreciation. The key is to minimize outside investor ownership and control (30% or less) while maximizing investment in dollars. Advocates for Primary Care LLC provides that key. We can help you realize this vision.

Who is Advocates for Primary Care ?

Advocates For Primary Care LLC (Advocates) was formed to help PCPs achieve the above ideals. Advocates is a consortium of physicians, consultants, attorneys, CPAs, administrators and financiers who share a common vision. That vision is: PCPs can develop and manage successful healthcare systems in their communities if they are given appropriate guidance, education and resources. Advocates believes it is not necessary for PCPs to give up either ownership or control to a hospital or managed care entity.

Advocates can provide management expertise and seed capital to qualified start-up groups, positioning them for growth and development to the point that larger amounts of venture capital can be attracted at the lowest possible cost. Venture capitalists invest in management track record, and Advocates' consultants bring to medical groups their excellent track records with hundreds of IPAs, HMOs, MSOs, medical groups, hospitals and affiliations with the most prestigious medical management professional associations in the country.

Take Action Now

Primary care physicians need to quickly establish strategic positions within their local markets. This may mean either forming the first PCP group in their markets, or preparing to abandon an existing multi-specialty, (hospital contolled-deleted) managed care organization in favor of forming their own PCP groups. PCPs may be immediately facing the issue of multiple suitors in their markets trying to divide or acquire practices or IPAs.

Author Keith Borglum is a consultant and medical practice appraiser with Professional Management and Marketing, 3468 Piner Road, Santa Rosa California 95401.

Keith is one of the few consultants in America to be accepted as a member of all of the following; the Institute of Business Appraisers, National Association of Healthcare Consultants, Society of Medical Dental Management Consultants (90-94), American Medical Association's Doctors Advisory Network, American Academy of Family Physician's Network of Consultants, and the American College of Physicians Managed Care Advisory Consultant Network.

Phone 1-800-79-CONSULT for consulting and appraisal information.

Permission is granted to reprint or quote any portion of this article provided that the author, firm, phone and city are named and two copies of the quoting journal are immediately mailed to the author at 3468 Piner Road, Santa Rosa CA 95401.