Mc 8,11,12 - Part One - Networking

Front 1

BACKGROUND
IPA’s (Independent Practice Associations)

Back 1

 Large physician / specialist groups
 Capitated by the MCO
 Independent corporation

Front 2

IDS’s (Integrated Delivery Systems)

Back 2

 very large group, including PCP’s, SCP’s, hospitals, and ancillary providers
 well-capitalized and able to withstand risk

Front 3

CONSIDERATIONS FOR AN MCO IN RECRUITING SPECIALISTS (SCP’S)

Back 3

 Location
 the over/under-utilizedness of the provider
 affects ease of recruiting
 the desired patient satisfaction
 Access Needs of members:
 driving time
 Specialist-to-PCP ratio
 Specialist-to-Member ratio

 Number of SCP’s to Recruit
Few:
 Easier UM; better negotiating leverage
 But patients have poor access.
Many:
 HMO plan more marketable; good access
 But hard to manage; higher utilization

 PCP vs. SCP Designation
 Allow phys to choose to be a PCP or SCP but not both.
 Review the phys's practice to designate him properly.
 PCP vs. SCP Cost
 PCP's are more cost-efficient for routine medical care
 SCP's are more cost-efficient at handling serious or chronic conditions.

Front 4

CONSIDERATIONS FOR AN MCO IN RECRUITING HOSPITALS

Back 4

Selecting Which Hospitals to approach
 Location and Availability: Rural areas have limited choice
 How many to contract with?
 Same tradeoff as before (few/many).
 Services the hosp offers
 Does hospital have a well-run IDS?
 Is hospital a supporter of the MCO?

 The Market that the hospital is in
Low Managed Care penetration:
 Hospitals are at low occupancy and high profit margins
 MCO can negotiate a good discount from fee-for-service.

High Managed Care penetration:
 Can't get discounted fee-for-service.
 Therefore, use Per Diem or Capitation instead.
 Hospitals more accepting of risk-sharing
 Hospitals and MCO work together as business partners

 The hospital’s data:
 capacity; % of capacity
 Number of bed days the MCO currently has in this hospital
 How much business is shiftable
 The hospital’s outpatient charges

Front 5

Reasons to Renegotiate a Contract with a Hospital:

Back 5

 if MCO is expanding
 Consolidation of two MCO’s or two Hospitals
 annually, in general.
 If the MCO can negotiate better discounts now (better reputation)

Front 6

The Roles of the MCO Plan Manager and the Hospital’s Manager in Negotiation

Back 6

Roles of MCO Managers
 Executive Director: initiate contact; meet with Exec Dir of hospital
 Finance Director: negotiation; explain MCO’s #’s and business plans
 Medical Director: evaluate quality of hospital; convince them that it can shift members.

Roles of Hospital’s Managers
 Executive Director: set overall strategy
 Finance Director: analyze revenues; capitation adequacy; hospital’s ability to handle new business
 Medical Director: Credentialing, UM, QM

Done.