"The questions being asked about primary care at any academic medical center, certainly at UCSF Stanford," he said, "are 'how much is enough and how do we build what we need' and, of course, 'how much will it cost.'"

McAfee spoke Oct. 21 to the monthly joint meeting of the Stanford Hospital and Clinics Deputy Chiefs' Committee and Medical Center Task Force. His talk came in context of an announced expansion by Brown & Toland to the Peninsula area, including Stanford's service area, effective Jan. 1, 1999.

UCSF Stanford, like other academic medical centers, needs to build a primary care capability to maintain an adequate patient base for secondary and teaching programs. And the organization has learned from the examples of other centers that acquiring practices may not be the best way to do this, McAfee said.

"It turns out this is a very expensive way to build a primary care network," he said, "largely because purchasing and then running a practice requires a lot of capital. Many practices owned by physicians who were self-employed entrepreneurs were much more productive before they [the physicians] were converted to employees." That drop in productivity resulted in operating deficits. which the institutions continue to fund, he added.

In response to questions, McAfee noted that Stanford's link to Menlo Medical Clinic differs from the acquisition model because although the clinic's assets were acquired, UCSF Stanford contracts through a management service agreement with Menlo physicians to provide clinical services. "In this model you can sometimes preserve the incentives for physicians who retain independence," he said.

McAfee said hiring faculty physicians to supplement Stanford's current in-house primary care volume of 50,000 to 53,000 patient visits a year would not be a desirable exclusive strategy because it poses numerous challenges. These include higher overhead and conflicting, non-reimbursable demands on faculty physicians' time, such as research. A complement to building primary care by hiring faculty is the model that evolved into the Brown & Toland Medical Group.

Primary care physicians who have an exclusive relationship with Brown & Toland Medical Group have been eligible to receive additional services such as practice management consultative services and an electronic linkage between physician offices and the group's medical service organization (MSO).

"Brown & Toland contracts with physicians in private practice or the academic setting to provide service. [The group takes the position that] we don't buy practices; we don't pay academic doctors differently than we pay the community doctors. We pay the capitation rate for primary care physicians based on the age and sex of the patients. Specialists are paid on a modified fee-for-service basis, and there are no patient barriers on specialty referrals within the network which the primary care physician deems medically necessary. Most of the services that do require prior authorization are services for which a benefit analysis is required to be certain service is covered under the patient's health plan. But there is no difference based on whether the physician practices in the community or academia," McAfee said.

Now, he said, Brown & Toland is expanding into San Mateo County in a move it expects will provide stability, including viable third-party reimbursement contracts for the physicians delivering care.

Brown & Toland is "only accepting board-certified physicians. In addition, as the group goes into San Mateo (and northern Santa Clara) County, it has asked primary care physicians to identify high quality specialists in the area. In Santa Clara County, Stanford primary care and specialist physicians will join Brown & Toland.

In response to questions, McAfee called procedures for enrolling Stanford-area physicians beyond the faculty "a work in progress." The challenge for the academic departments at Stanford is to compete within the Brown & Toland Medical Group on the Peninsula on the basis of quality and service, says McAfee.

"That was absolutely the case in San Francisco, where [Brown & Toland] used an inclusionary model to bring together community and UCSF faculty physicians.

"Choice is what people really want right now - a broad network of physicians. They want to know they can get their primary care in the community if they choose, but if they get really sick they have access to university specialists. At Brown & Toland, [the group] took the position that there would be no barriers from a patient perspective on referral to either a community or university specialist. Brown & Toland's market strategy is to construct a medical group in which there are no barriers to patient choice. This allows community physicians to refer to any physicians within the Brown & Toland group."

McAfee noted that fees are distributed based on productivity and that the 300 or 400 stockholders - the original California Pacific Medical Group doctors who founded the core of the organization - enjoy no financial benefits, although they do elect the board of directors.

With Stanford and San Mateo County doctors in the organization, Brown & Toland plans to look at decentralizing authority.

"It's still a work in progress but the intention is to transfer a substantial amount of the authority to regional operating groups. The group understands that local physicians in Santa Clara County are not going to want the decisions about their livelihoods and clinical practices made by a group of docs up in San Francisco. The goal is to take mobilize a large number of physicians by virtue of our ability to contract with the health plans in the marketplace as a way of stabilizing revenue, but at the same time [Brown & Toland] want[s] to decentralize a lot of the decision-making and authority. So again, the goal and goodwill are there, but the details of how they will be blended are not entirely clear."

Brown & Toland Physician Services Organization Restructures in Response to Market Downtown

Fact File: Virology
  Q&A

People

NEWS
News Summary

Medical Journal Purchased

Krummel Selected for Surgery Chair

Invention Challenge Carries $2,500 Prize

Breast Smart Probe

Primary Care / Geriatrics

Palliatives

Adult Neurosciences Chiefs Announced

HOME