Independent Networks Weigh In

What are the independent O&P networks saying? Below are analyses and comments from two of the most prominent, POINT and PrimeCare. Jim Andreassen, President OPGA & POINT Health Centers of America Inc., based in Waterloo, Iowa: "What independents really need to do is compete. Independents dominate this industry, and we at OPGA/POINT want it to remain that way. There is a place in the business strategy where independents can employ networks to compete effectively. "So why has Linkia obtained the CIGNA contract? I believe that answer lies essentially in geographic coverage and practice locations. The independents have waited and are acting in a reactive' rather than proactive' manner. They are allowing the leading few to direct their future. Due to lack of participation in [other networks] by independents, Linkia offers larger geographic coverage. The majority of independents have waited for the impact of Hanger's Linkia division to result in the termination of their independent/direct CIGNA contracts before considering whether they should support and have available a network to compete with it. "Many independents bemoan that the national, publicly traded organization has such power and influence over the industry's trade organization, credentialing organization, the largest patient organization, the lobbying groups, and to a lesser extent, even the academic organization. At the same time these independents will explain why they won't pursue ABC facility accreditation, join a network such as OPGA/POINT, join AOPA, or support ACA. Then after neither actively funding nor contributing, in a self-fulfilling prophecy' scenario, they say that now these entities don't deserve their support. "They will tell you that the national, publicly-traded organization offers them the lowest prices as a distributor through its wholly owned SPS division and has terrific service. Does this justify throwing them financial support in the form of contributing revenue to their bottom line, which they can funnel to the less profitable segment of their competing service provider business? "I believe each independent practice has the responsibility to put together a business plan, and to make logical decisions that support the strategies they decide to employ in their plan. "To the independents, I ask, If Linkia is successful and if this service delivery model rolls through the industry, what happens to your practice? If you maintain total "independence," never engaging your practice in any collaborative efforts, and Medicare competitive bidding is successful, what happens to your practice?' Simply put, unless the independents out there band together to fight this ongoing battle, it will be a long road ahead. No one independent can do it alone. The only way to win the battle is through networking. The decision is up to them. "I find it disheartening that a larger percentage of the industry is investing in their competitor, as is evidenced by the growth of the SPS division in each successive quarter of Hanger earnings reports, than in their own industry organizations or in a competitive network. Should this be part of your business plan?" Susi Ebersbach, director of business development, POINT Health Centers of America: "Independents who want to regain direct access to managed care contracts need to recognize that cooperating with Hanger via Linkia and helping it succeed will encourage more payers to allow Linkia managerial control of at least part of their provider network responsibility. It's simply inconsistent to make a business decision that strengthens your competitor's performance and still expect to regain your direct-access position. There is a chance that regaining direct access with some payers is not going to be an option. "To compete, independents need to offer the services Linkia is promising to payers: performance data, streamlined credentialing, lower prices, and plenty of patient care locations. Two routes are possible: consolidation into large chains of practice-or networking. Consolidation of enough independent practices to compete with Hanger's chain is unlikely to be successful due to the number of practice cultures and personalities. Time won't allow this route except that possibly some regional' practices could develop and achieve a degree of success. "Linkia is not the only market factor indicating a network is an essential part of independent practice strategy. Medicare's competitive bidding plans also are leaning in the direction of successful bidders needing to form into some type of cooperative network. When you decide whether you should join a network that gives you contract access and purchasing discounts, it is not logical to join the network that wants your market share. When Hanger predicts that $50M in additional revenues is possible through its Linkia division, and yet reimbursements are dropping, then these revenues represent a shift in market share away from the independent-and not growth in the total market." "Independents need to use their size and flexibility to their advantage, in that they are better able than Hanger to control their costs, AND they need to remain calm and not let the loss of the CIGNA market share-which could be temporary-force them into a bad long-term business decision. Contrary to rumor, CIGNA has told us that it continues to have direct contracts in place with certain O&P providers and does not foresee Linkia as the exclusive provider. All depends on whether Linkia can successfully put together a willing network to meet CIGNA's service needs by voluntary participation of independents." Cathie Griffith Pruitt, president/CEO, PrimeCare O&P Network, Memphis, Tennessee: "Now is the time for independents to once again align themselves with a good, strong network. Given the current climate, networks already have the framework in place to aid independents with banding together, which is one key piece of any strategy for dealing with a large entity versus smaller entities. "One of the major selling points that being in a network provides the national MCOs is the benefit of having standard credentialing in place for a number of independents in one easy-to-manage package. I have used this selling approach on numerous occasions with a great deal of success. We also have been able to negotiate higher reimbursements, based on the fact that we make that process easier for them to manage. I have found that there are insurers who prefer to work with independent firms, for many reasons, but they don't have the time to devote to recruiting them and then handling all the follow-up to get great numbers of individuals to comply with their internal mandates. "I have to agree with the other networks' public comments on many of the points that they have made with regard to being proactive and supporting our field, rather than waiting for the "other shoe to drop." Once again, networks such as PrimeCare provide a means of sharing strategies and putting the kind of reporting and follow-up in place that the smaller independents, in particular, may not have the time or resources to handle on a consistent basis. "In effect, in today's environment, independents that elect not to join a network are leaving themselves very vulnerable to changes in regulatory and market conditions."

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