A Strategy for Your Independent Practice Association Equals a Roadmap for your Sustainability

Value-based healthcare and healthcare reform are driving consolidation throughout the healthcare marketplace. Hospital acquisitions of physician practices and hospital employment of physicians continue to be a strong trend. Consolidation over the last 5-years has outpaced the already considerable growth in the previous period. According to data from Avalere and the Physicians Advocacy Institute (PAI) from 2012 to 2018 acquisitions increased by 128 percent while the employment of physicians increased by more than 70 percent. In this consolidation-focused marketplace, how do practices and providers remain independent and competitive?

An Independent Practice Association (IPA) is one option for providers; it can provide myriad benefits to its members. Benefits include, but are not limited to:

• Group-based purchasing of supplies (e.g., medical equipment, health information technology, liability insurance) and services (e.g., billing and other administrative functions, data analytics, training, and technical assistance);
• Professionally negotiated contracts with payors; and
• Coordinated and standardized processes, workflows, and care delivery models that reduce the guesswork in how best to care for your patients.

 The most significant benefit of an IPA to its provider network is to make the job of delivering care easier by removing the unnecessary administrative burden and streamlining core functions. Who wouldn’t want that? (For those still trying to decide if and what type of partnerships may be beneficial to your practice, check out James F. Sweeney’s October 2018 article in Medical Economics.) 

That said, joining and participating in an IPA does not automatically provide these benefits. An IPA needs a strategy under which to operate, and a provider network that is aware of and committed to that strategy, in order for its members to benefit from their participation.

Step 1: Understand why members joined the IPA

Before a network of unaffiliated providers starts diving into its collective strategy, it’s imperative to identify (and keep at the forefront of your discussions) why an IPA is beneficial to your members and what they are willing to do to participate. IPAs have infinite varieties in how they are structured and what they help their members accomplish. The following represent some of the primary reasons that practices join IPAs:

INCREASED NEGOTIATING POWER

An IPA group can represent tens of thousands of physicians, giving them the numerical strength to collectively bargain and to strategically develop larger, more competitive, and appealing third-party contracts. Collective bargaining can result in reduced overhead costs through the purchase of common supplies and materials and lead to higher payment rates from payers seeking a large network of providers.

REDUCED ADMINISTRATIVE BURDEN

Establishing standardizations for activities and functions shared across the majority of the network minimizes variance in behavior across the membership. More importantly, when done correctly, standardizations reduce some of the administrative burden members would need to manage on their own outside of the IPA. These efficiencies may also result in lower administrative costs for the membership. IPA management infrastructures allow providers to focus more on providing care, rather than being burdened with aspects of payroll, benefits and claims management, compliance, marketing, and so forth.

IMPROVED PERFORMANCE

Healthcare is not a perfect science, which means we will not always know what to do, nor be able to do what we know needs to happen. Operating within an IPA provides its members access to a network of practitioners with a common goal, thus providing an incentive for the network to assist individual members with their performance. IPAs offer the opportunity to participate in quality programs that reward improved outcomes that are often not otherwise available to the independent or solo practitioner. In this case, to ensure the performance of the membership an IPA can engage experts (or partners) to provide education, technical assistance, and quality improvement support. Often such resources are financially unattainable for an independent provider.

Step 2: Outline Roles & Responsibilities

Regardless of what your IPA is set up to accomplish, every participant has a role to play. Think of your IPA as a business (Guess what? It is!). According to Effectory (an employee feedback solution group in Europe), employees have high effectiveness and job satisfaction (among other things) when they have clarity on their roles. Members of your IPA should be considered as employees of your IPA; they are, after all, doing the work of the IPA (read: providing care for patients). As a collective, the IPA membership needs to invest the time and resources in developing clearly stated roles and responsibilities for all participants within the network. Everyone from individual practice employees to centralized staff hired by the IPA should be able to report out their function and how it benefits the overall operation of the network.

One key role IPAs should pay special attention to is the Administrator. No matter what your IPA’s function, it will require administrative services to operate. While these services can be provided by an individual or a team, it is imperative that every IPA member: (1) can identify the administrative team; (2) agrees to the responsibilities of the administrative team; and (3) empowers the administrative team to hold members accountable for their performance if and when that is necessary. Administrators are especially important as your IPA is establishing itself (see Step 1 above). According to the Yale School of Management, 60 percent of the variance in a team’s behavior is based on the conditions established by the leader (e.g., administrator) for the group (e.g., network). Over time, the Administrator’s role becomes keeping the group cohesive and facilitating the decision-making necessary to move performance forward.

Step 3: Invest in Flexible Strategy

So, your IPA has members who all agree on what they want the network to accomplish and a clear delineation as to who is responsible for achieving those goals. Congratulations! But let’s not forget that there are infinite paths to follow to accomplish one goal. Without an established strategy, an IPA runs the risk of each member following their own course of action to achieve the network’s goal. Even relying on payor contract metrics as your strategy will result in an uncoordinated effort to improve the performance of the entire network (after all, how many different ways are there to help patients control A1c levels?). For many, however, developing a “strategic plan” invokes thoughts of making concrete decisions on known quantity factors to produce a reliable outcome. We can all agree that the healthcare field has nothing “concrete,” “known,” or “reliable” within it except for change.

Roger L. Martin’s 2014 article, “The Big Lie of Strategic Planning” outlines new ways to think about strategy and recommends organizations follow three simple rules:

1. Keep the strategy statement simple.
2. Recognize that strategy is not about perfection.
3. Make the logic explicit.

This is a way of thinking IPAs need to adapt to remain viable and competitive in today’s healthcare field. Trying to plan for a guaranteed outcome will only result in frustration. How many of us spent resources contracting with two payers only to learn one was being acquired by the other? Or how many of us planned for the implementation of a managed care model for Medicaid, only to have the process drag out for over five years? What happened to us all when we thought Congress had a chance at striking down the Affordable Care Act in 2017? The key to success is an idea of where you want to go, but the flexibility to change course if your path is altered by changes in policy or programmatic landscape.

If you’ve read this far, chances are there’s some work you want to see your IPA go through to either enhance performance on your current plan or change your course of action. Regardless, it will be challenging. But fear not: Atrómitos is here to help. We firmly stand behind the idea of provider collaboration and have seen the benefits that a network with a clear strategy can bring to its members. We are ready to help facilitate your IPA’s strategy development.