Physician Associates CEO Dennis Buhring discusses how the nearly 100-physician group has adapted to decades of change
ALTAMONTE SPRINGS – Central Floridians may remember a two-physician practice called the Orlando Health Care Group (OHCG). Central Florida’s largest multispecialty practice, now known as Physician Associates, is celebrating its 30th year, and its second year as part of Orlando Health in a January 2013 $50 million buyout.
Orlando Medical News caught up with Dennis Buhring, president of the group, who worked with Aetna Healthcare prior to 19 years at Physician Associates and knows both sides of the payor/provider fence, to discuss how the practice has weathered continuous industry challenges, why physicians decided to sell to Orlando Health, and what’s next.
Since the group was organized in 1984 as an “affiliated medical group” with Prudential Health Insurance, tumultuous changes have taken place industry-wide. How has Physician Associates adapted to those changes?
So many changes have occurred! Fundamentally, it seems everything has changed except the physicians’ dedication to their patients.
In 1998, Prudential elected to sell their HMO business to Aetna Health Plans. At that time, rather than sell the practice or merge with a hospital, why did OHCG elect to become a free-standing, independent medical group?
The environment in 1998 was very different than the environment we face in 2014. As a statistician and financial person, I was deeply concerned about the unsustainability and continued rise of healthcare costs. That wasn’t the focus in 1998. Then, payors were the focus of cost control in contracts and negotiations. Now there’s been a shift to healthcare systems, with primary care physicians actively working with hospitals to provide the entire continuum of the highest level of quality care possible and the total elimination of unnecessary and wasteful expenses. That’s a huge difference!
Today, the industry is in a crisis. The payor products have changed. Way back then, we were an HMO and a PPO. Today, we see ACOs forming and we’re hearing employers talk about narrow network products and employer-sponsored clinics, care clinics from Wal-Mart and Walgreen’s, and other solutions to contain healthcare cost increases.
Physician Associates has been ahead of the curve on many trends covering three decades. For example, in 1998, the practice was organized into four principle departments: family practice, internal medicine, pediatrics and obstetrics and gynecology – an early adoptee of the Patient Centered Medical Home movement.
True. For example, we wanted to practice more evidence-based medicine, so we teamed up with NCQA before it was in vogue. We required every single adult medicine physician, as a condition of employment, to be NCQA-credentialed in heart, stroke and diabetes. I believe we’re in our third renewal period, so it wasn’t a one-time thing.
Last year, we formally moved to PCMH, which we do with population management. Talk about a profound difference between 1998 and 2012. That’s a biggie!
So why did Physician Associates decide to sell?
In 2012, we faced a decision. Just to cover cash flow for the delayed reimbursement in the change from fee-for-service to fee-for-quality, I was going to have to take out a $2.5 million loan to keep the doctors whole. And you hate to talk about money when you talk about healthcare, but like any business, it has expenses that can’t be ignored.
Carrying that cash flow for us was an impelling reason to sell. We’re not even talking about expenses related to ICD-10 conversion. And we’re a large multispecialty group with a lot of efficiencies! For freestanding physicians to do this, it’s almost unaffordable.
We also looked at this trend: Primary care physicians, specialists and hospitals working in a fee-for-service environment are part of a fragmented delivery system with almost every person for themselves. There was no real incentive for collaboration in 1998. Now we’re moving to an integrated delivery system. We realized that Physician Associates on its own wasn’t well positioned to be effective in an integrated delivery system. That was significant. It became very important and strategic to find the right partner, with a common culture.
How did Physician Associates choose Orlando Health as a partner?
Culturally, we were more aligned with Orlando Health in terms of strategic planning. They were taking very aggressive steps to reduce their costs. Also, when you look at the Orlando Health system, it’s all about patients first and quality, with the goal of improving quality and making healthcare more efficient. We saw that, and it philosophically totally aligned with us. Importantly, their system recognized the importance of, and values and pays for the transition of fee-for-service to fee-for-quality.
Before we signed, we evaluated everything thoroughly. Physicians value their independence. Orlando Health allowed us to retain much of our independence and remain very much physician-led. That’s a real testimony to Orlando Health to allow us to continue that leadership. When everyone is aligned with the same goals and is working hard to improve communication throughout the whole system, it energizes all.
How have Physician Associates doctors been affected by the change?
Even though some thought the sale might be an exit strategy for some of our physicians, I haven’t lost a single one. This wasn’t about money. It was all about the future.
As for changes, our primary care physicians are working directly with the hospital (hospitalist program), and within the hospital, working with all specialists. We’re striving to make the programs we’re working on – cardiology, oncology, and all discharges – operate more efficiently and effectively. It’s a work in progress, and also an exciting time for all of us.
One outcome of the partnership: Orlando Health and Physician Associates have established significant care coordination/population health departments for inpatient and discharge patients. Tell us more.
As a statistician, I’m intrigued with the 20/80 rule, by which 20 percent of patients consume 80 percent of healthcare expenses. There, we’re risk-stratifying all patients. Very sick patients are (labeled) red. Patients to be treated with evidence-based medicine are (labeled) yellow. Very healthy patients are (labeled) green.
For example, let’s say as a primary care physician that you see four patients an hour.
In 15 minutes, you can’t treat a ‘red’ patient, perhaps someone with five co-morbidities. The doctor will need 50-60 minutes to cover everything with that patient. Let’s say you see four ‘red’ patients a day. As a result, that means you’ve lost nine patient visits. If you get $100 a visit and do that for 230 days, you’ve lost $100,000 per year. Who pays for that? Right now, no one is.
We spent a lot of time coordinating optimal care needed for red and yellow patients because there will be a 12- to 18-month delay before we see a difference in being paid based on fee-for-quality than fee-for-service. The shared savings for hitting quality parameters and reducing costs comes later.
What challenges remain for the practice integration into Orlando Health?
It’ll really help when we’re all on one system. Until then, it’s a little harder to communicate, but changing systems takes time. Every year is going to get better and better for all involved.
We joined Orlando Health 15 months ago. If you asked me post-mortem, what do you think? I’d say it couldn’t be better. Everything we’ve talked about has happened. For that, we’re very grateful.
What challenges remain for physicians in general?
When you think about it, we’re asking our doctors to make a lot of changes. When we moved from paper to electronic records, there was a tremendous loss of productivity. Now they have to report and track and have corrective action plans for all quality metrics. Then we have the PCMH system of ‘red, yellow and green’ patients. Couple that with changes coming to ICD-10, and our industry is going to have a really tough time getting through October. We’ve managed to weather three significant changes, but four? I sure hope it’s not the knock-out punch.
FAST FACTS:
Physician Associates:
Employs 670, including 96 physicians.
Records more than 500,000 patient visits annually.
Delivers more than 3,000 babies – roughly eight births daily.
Works in 25 locations around Central Florida.
Administered 29,000 flu shots during the last flu season.
Margaret Bashore, Candy Earlywine and Howard Pelteson, MD, have been employed with Physician Associates since it was organized as OHCG in 1984.
