The Ventura County Cancer Network--An IPA Case Study

Oncology NEWS International Vol 7 No 4, Volume 7, Issue 4

ORLANDO--When Alice goes through the looking glass in Lewis Carroll’s classic, she finds her once familiar world turned upside down and inside out. This is how Rosemary McIntyre, MD, described her feelings during the formation of the Ventura County Cancer Network.

ORLANDO--When Alice goes through the looking glass in Lewis Carroll’s classic, she finds her once familiar world turned upside down and inside out. This is how Rosemary McIntyre, MD, described her feelings during the formation of the Ventura County Cancer Network.

Adapting to the changing health care environment in this era of managed care poses special problems for the oncology specialist, she said at a session on managed care at the fall educational meeting of the American Society of Clinical Oncology (ASCO). The Ventura County Cancer Network’s story shows how one independent practice association (IPA) is dealing with them.

In 1994, nine of the 13 private practice oncologists in Ventura County found a common ground, and the Ventura County Cancer Network was born. The county, with its population of 700,000, is a very small metropolis of the larger southern California area.

"With the help of a physician’s planning company, we went through the process of strategic planning to understand the current economic position of Ventura County," said Dr. McIntyre, a medical oncologist in Oxnard, Calif, and a founding member of the Network.

The group members decided on a number of important goals:

1. To provide a mechanism to secure patient volume in the future and protect drug reimbursement.

2. To counter the divide and conquer strategy of payers.

3. To obtain experience with capitation and risk contracting, and build an infrastructure to be able to deal with managed care of oncology patients.

4. To go on the offensive to protect market share.

5. To establish a forum for physician interchange on practice operations, market developments, and clinical standards.

By 1995, the Network had implemented its action plan, and was ready to begin contract development with payers.

"We kept on track by following certain ground rules," Dr. McIntyre said. These ground rules, established by the steering committee, included: That each doctor would become a shareholder by making an initial capital investment contribution, with only shareholders being able to vote; that all shareholders would be members of the board of directors; and that all new contract opportunities would be negotiated through the IPA, with older contracts being renegotiated by the Network.

Dr. McIntyre said that quality assurance was accounted for by establishing a review of oncology literature and published guidelines that would allow for mutually agreed upon internal clinical pathways. The nurses within each practice would look over utilization reviews for treatment plans to make sure they were in line with the clinical pathways (guidelines). A stepwise process for review and approval of treatment plans was developed.

The Network put in place guidelines for contracting in an attempt to standardize capitation proposals, with their services defined in detail. Professional services were confined to hematology and oncology, but the Network made sure to also list services that would be outside the capitation rate, such as hospital services and tertiary referrals.

The group also developed a provider reimbursement methodology, and utilized an outside consultant to help members keep abreast of actuarial data.

Marketing Plan in Place

The IPA put a marketing plan in place with the help of an outside marketing company, and prepared a marketing brochure. Radiation oncologists were recruited to join the IPA.

So far, the Network has developed four contract proposals for approximately 120,000 covered lives, using capitated rates. To date, the Network has one active contract of approximately 15,000 lives, with a second contract under negotiation that would cover 35,000 lives. A third contract was lost to a Los Angeles oncology network.

Dr. McIntyre said there are many problems still to be worked out. Payers still define price. "There is very little wiggle room to actually negotiate with them," she said. Payers want all-inclusive contracts and want the IPA to subcontract other physicians for services. Some payers will talk only to individual practices and not negotiate through the Network.

"Larger networks are forming that may break the cohesiveness of the IPA group exclusivity," Dr. McIntyre said. "And hospitals are forming relationships with physicians that may lead to subservient roles for doctors."

She noted that for managed care organizations, cost, above all, is the differentiating factor, "despite the lip service for quality care." In the face of newer, more expensive oncology therapies, managed care seems to want more referrals to hospice type care, she said, adding that "we believe it’s better to leave clinical decisions to the doctors and the patient. Until we can change the mind-set of the payers that quality care is more important than cost, we’re always going to be at a disadvantage."

Dr. McIntyre said that the Ventura County Cancer Network has given the oncologist a forum from which to approach the changing economic realities. "We’re too small to really achieve the upper hand, and we don’t know what the future of the IPA may be," she said, "but we still feel that at least we’re working toward goals on which we agree."