Physicians Compete

Experts in the health care industry often note that it’s the doctors who play the most important role in the business: No one but a physician may admit patients to a hospital.

That may be true, but it’s also so much rhetoric. When the doctors of Northwest Arkansas formed an independent physicians’ association, that may have tipped the balance of power – and hospital administrators have been predicting the IPA’s demise ever since.

Yet many of those involved with the IPA, including the St. Louis consultant who works for the group and the IPA president, Dr. William Nowlin, say membership remains steady, hovering around 300. Membership renewals haven’t dropped off, they say, although in any given year, roughly 10 percent drop out or new members join.

Two years ago, the IPA introduced Physicians Health Plan, an insurance plan that now covers more than 12,000 lives. Last December, the IPA board entered into negotiations with Columbia/HCA Healthcare Corp. to develop several new elements. One is for an equity-based medical group that would allow physicians to form a single, large multispecialty group practice in exchange for cash and equity.

Nowlin acknowledges a difference in opinion about what the IPA is.

“The group we formed [believes] that physicians … need to be the ones helping shape health care here, as far as what direction it takes and where it goes,” Nowlin says. “[Critics] say it’s a doctors union to keep [physicians] making a lot of money.”

Nowlin disputes the latter assessment and says the IPA’s talks with Columbia should bring another competitor to the arena, giving patients and doctors alike another option when it comes to health care.

He explains that both hospital systems – St. Mary’s and Washington Regional in partnership with Arkansas Blue Cross Blue Shield, and Northwest Health System with its PremierCare – offer their own products to consumers.

“Although they’re very competitive, you’re really looking at the same thing. … It’s the same [hospital-physician] system at both places although they may vary in how they act or react, but you’re really looking at the same thing,” Nowlin says.

“What we’re doing distinctly different with this market … I think helps level the playing field. It gives physicians opportunities and choices they don’t otherwise have – and patients will have a choice, too.”

UAs for negotiations with Columbia, Nowlin believes they’re nearing the home stretch.

“I think that we have finally gotten to a point where we’re pretty clear” about terms, he says. While the parties have agreed in principle, lawyers and accountants are now hammering out the final details.

Physicians who elect to participate in the Columbia partnership will be required to make more of a commitment than the IPA has asked for, Nowlin says. He explains that’s because they’ll be assuming some of the risk.

KNowlin says the physicians ask only for the opportunity to compete fairly.

Sam Walton was a pretty big believer in competition, and he was successful at it,” Nowlin says of the Wal-Mart Stores Inc. founder. He sees some parallels.

“You have a group of consumers that have the need to purchase services and products. Line up the providers, they do their best and the market, i.e., the public, determines where they’re going to go.”t

-Cost and quality of services will be the determining factors, he adds, predicting that the focus in the near future will shift from cost to quality.