A Community-Based Practice Model for Success

Many groups have begun taking on more challenging operational strategies for success, said Har - vey D. Bichkoff, MPH, CEO of Marin Specialty Care, a collaboration of specialty physician groups in Marin County, California, presenting at the 2011 annual meeting of the American Society of Clinical Oncology. To illustrate how this can be done, Bichkoff detailed the steps implemented by Marin Specialty Care.

Know Your Market
Before embarking on their collaboration efforts, the group—initially 6 medical oncologists—investigated the current marketplace in which they practiced. Bichkoff explained that 4 years ago in Marin County, Kaiser Permanente covered 30% to 40% of patients and Sutter Health ran more than 25 hospitals, using a strategy of forming medical foundations through which physicians are employed and are affiliated tightly with the local hospital.

At first, his group considered building their own cancer center, going so far as to design the facility with consultants. Research, however, revealed that Sutter Health was not a strong player in the marketplace, and during its transition period Marin General Hospital became county owned. The hospital then developed a large primary care network, which it termed PRIMA Medical Group, and its new administration expressed interest in a joint venture or strategic partnership with local medical oncologists, Bichkoff told attendees.

Design Your Collaboration
Marin Specialty Care worked in concert with Marin General Hospital to develop an organizational structure that would benefit both. The current arrangement consists of the medical oncologists, 4 urologists, 3 radiation oncologists, and 1 breast surgeon. The breast surgeon is a member of PRIMA Medical Group, which according to Bichkoff removes the risk of her salary from the oncology group because she is employed through PRIMA’s foundation.

For radiation oncology, Bichkoff explained that the 2 organizations developed a lease structure that allows the department to be owned and run by the hospital in the mornings and the oncology group in the afternoons. For medical oncology, a comanagement agreement was put in place, which requires the oncology group to be involved in all aspects of the service line and manage the department with the hospital. In addition, a block lease was set up for positron-emission tomography/computed tomography.

To set up the new arrangement, Bichkoff, as the lead administrator of the oncology group, worked with hospital administration on the deal points. “Instead of duplicating service in the market, we brought in an independent group to do a fair market value analysis on space, equipment, and staff,” said Bichkoff.

Consider the Operational Aspects
It is important to plan for myriad operational elements, Bichkoff cautioned. At Marin Specialty Care, they considered not only medical oncology overhead but also the culture change for the radiation oncologists and surgeons. These practitioners “are not used to large executive pay scale for accounting administrators, finance people, or millions of dollars in drug spend,” said Bichkoff.

In addition, payer contracts will need to be renegotiated. Bichkoff gave this example: “It took 2 years to renegotiate contracts. The PPO [preferred provider organization] contracts, which are 40% of the business, were more weighted toward drug reimbursement.” The group had to renegotiate with procedural bases in mind for urologists’ services and radiation global fees.

Another aspect Bichkoff reminded attendees to consider is branding. For his group, which now contained urologists and breast surgeons with nononcology (benign disease) clientele, a new name was in order: from Marin Oncology Associates to Marin Specialty Care. Bichkoff also cautioned not to overlook the difficulty in integrating 2 electronic health record systems.

A board of directors and physician committees also need to be selected. At Marin Specialty Care, shareholders meet every 2 weeks, which according to Bichkoff helps overcome the silo situation that is common in multispecialty practices. Selection of other key personnel is important as well. In his experience, “active participation and buy in from members of each group…[and] a lot of time and dedication is needed.”

To keep the new venture successful, use of outside personnel—consultants for business planning, lawyers who understand Stark laws and mergers, payer contracting consultants, human resource and benefits consultants, pension experts, billing experts, and accounting experts—needs to be included in the operational design. He recommended ensuring the group budgets adequately for consultants.

Reap the Rewards Although this collaboration took 4 years of hard work, the partners can now offer their patients the highest quality of care. From a business perspective, the group enjoys “more bargaining clout with payers and better rates for all, a diversified revenue stream with ‘low’ investment, positioning for ACOs [accountable care organizations] and alignment with referral sources, and ability to test relationships before moving to tighter affiliations.”

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