Nov-Dec 1998 Table of Contents

Take-Home Messages From the Academy's Managed Care Forum



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From time management to alternative medicine to accounting, the Managed Care Forum of the 1998 AAFP Scientific Assembly offered pearls for family physicians.

Fam Pract Manag. 1998 Nov-Dec;5(10):47-54.

Nearly seven out of 10 physicians consider themselves “anti-managed care,” according to a recent survey.1 If that describes you, take comfort in knowing that many of your peers share your pain, but understand that ignoring a tsunami won't make it go away. Perhaps a better approach is to understand what's coming and realize you can survive — even triumph.

That message lay at the heart of the Managed Care and Practice Enhancement Forum at the 1998 AAFP Assembly in San Francisco. For those of you who couldn't attend, we've mined our notes for tips and insights from family physician experts and some of the nation's top health care consultants. These highlights will continue in an upcoming issue.

Time management

Pamela J. Vaccaro, MA

  • Forget all the time-management advice you've heard over the years. Forget about trying to work smarter, not harder. “Nobody's that smart,” Vaccaro says. Forget about handling each piece of paper only once. Such advice just doesn't cut it.

  • The root of the time-management problem is that our society is witnessing the disappearance of three important things: lag time, lunch time and the livable work day. Thanks in large part to technology, things are happening at a quicker pace today, there is more in front of us, we're giving up personal (or play) time, and we're finding that with pagers, mobile phones and laptop computers we never really have to stop working or go off call.

  • The best time-management strategy is to set goals, which will help you gauge where you should be investing your time. According to Vaccaro, “Goal setters are powerful people.” The best goals are specific, measurable, achievable, relevant and time-measurable.

  • If you really want to feel more in control of your time “show up ... for your kids, your family, your life, you. Showing up means mentally being where you are.”

  • Rather than worrying about how to create more time in your life, “how about creating the time of your life?”


Pam Vaccaro is a time-management consultant based in St. Louis, Mo.

The essentials of managed care

Leonard Fromer, MD

  • “If it moves, capitate it.” That's the motto of Fromer's primary care group, which has learned that taking on risk brings clinical autonomy and control.

  • “And you make money, if you do it right.”

  • To survive in managed care, family physicians must accept capitation not only for their own services but for specialty networks and ancillary services as well. Otherwise, Fromer says, “at some point, things are going to fall apart because the basic economic structures don't match. You've got to synchronize them — the faster, the better.”

  • Capitation is a major paradigm shift in which physicians are paid more for doing less. But physicians must understand that quality and quantity aren't synonymous. “Most of the backlash that we've seen has to do with the fact that Americans think that the more health care they get, the better it is. It is not true.”

  • Everything is pushing us toward capitation. “A PPO is an HMO waiting to happen” because capitation saves money. In health care purchasing, “seventy percent of the decision making is driven by cost. ‘Give it to me cheaper, and I'll buy it.’”


Dr. Fromer is a family physician practicing in a large primary care group in Santa Monica, Calif.

How to work with alternative providers

Donald W. Novey, MD

  • A key to effective collaboration with alternative providers is being open to using their tools for helping patients while ensuring that those tools are used appropriately. As Novey says, “If a patient is on the floor and coding, you're not going to give him a cup of tea.”

  • One reason to consider more collaboration with alternative providers is that patients are seeking them out, sometimes instead of seeing their physicians. Doctors need to be in the loop of their patients' care and in a position to refer to alternative providers they trust.

  • To develop good relationships with alternative providers, a physician needs to understand their culture and perspectives. “At its essence, alternative medicine is a rebellion against Western medicine. So getting Western medicine to work with it can be an issue.”

  • Choose carefully the alternative providers to whom you refer patients. Ensure that they communicate with you well, are willing to work with you collaboratively, are willing to practice within the limits of their expertise, are willing to learn from you and follow the standards of professionalism.

  • A physician's legal liability related to working with alternative providers stems more from overreliance on alternative therapies than from the therapies themselves, most of which are comparatively gentle.


Dr. Novey is medical director of the Center for Complementary Medicine in Park Ridge, Ill.

The new documentation guidelines

Emily Hill, PA, and Douglas E. Henley, MD

  • In response to physicians' outcry against the 1997 evaluation and management (E/M) documentation guidelines, HCFA and the AMA's CPT Editorial Panel developed a “new framework” for the guidelines intended to make them less cumbersome. In June, the AMA House of Delegates voted to oppose documentation systems that involve quantitative formulas or assign numeric values to elements in the medical record. HCFA is now revising the new framework, but it has decided that some counting will be necessary to ensure consistent interpretation of the guidelines by carriers.

  • Under the new framework, for a patient's history to be considered detailed or comprehensive, only two rather than the current three elements (history of present illness; review of systems; and past, family and social history) would need to meet their specified criteria.

  • Under the new framework, the differentiation between multisystem exams and single organ system exams would be eliminated. The elements from all exams would be incorporated into one list; the exam type would be based on the number of elements documented; and a minimum number of required elements would be established for each level of exam.

  • Also under the new framework, the levels of medical decision making would be reduced from four to three. To guide the determination of the type of medical decision making, a single table would give the requirements in these categories: number of diagnoses and/or risk of complications, diagnostic procedures/tests ordered and/or amount of data to be obtained or reviewed, and management options. The highest level of any one of the three elements in the table would determine the type of medical decision making for a given encounter.

  • “If you use the 1997 documentation guidelines to your benefit, you can code at a higher level that's appropriate to your services. You can increase your reimbursement as much as 20 to 30 percent without doing any additional work,” Henley says.


Emily Hill is a reimbursement consultant based in Bald Head Island, N.C. Dr. Henley is a family physician and member of the AMA's CPT Editorial Panel.

Negotiating better agreements

Ellen J. Belzer, MPA

  • The best outcomes in principled negotiation are win-win solutions. In addition to building healthy relationships, this kind of negotiation recognizes that if the other side can't get most of its needs met, you won't get most of your needs met.

  • Know your bargaining clout before the negotiation begins. “You need to figure out what you have to offer that the other party needs,” Belzer says. “That is your leverage.”

  • Also before negotiating, determine your bargaining range: your starting point (the opening offer), target point (what you want) and resistance point (what you're unwilling to accept). Base these points on solid research so you know what you can realistically expect to achieve. Be careful not to set the starting point close to the target or you'll miss it through the bargaining process.

  • Never sign an agreement on the spot. Give yourself time to study it, and have experts (such as lawyers and accountants) review it.

  • “When people try to match a difficult negotiator's hard-edged style and get into a head-butting contest, that's the kind of situation that most often leads to litigation.”


Ellen Belzer is a negotiation and mediation consultant based in Kansas City, Mo.

Fitting in more same-day appointments

Sue Herriott, RN, MA

  • To create more same-day appointment slots, Herriott's practice holds open one-fourth of each doctor's daily appointment times.

  • Patients who call are immediately given the option of scheduling an appointment for that day. All staff have access to the scheduling system, so patients spend less time on hold and are transferred less.

  • To implement a system like this, you must know how many patients in your practice already get same-day appointments and how many are being redirected from same-day appointments on each day of the week. In most practices, the demand is highest on Mondays and Fridays.

  • Although the practice's physicians were concerned about the system's effect on their productivity, it has enabled all the doctors to see more patients.

  • As access to acute care has increased, access to nonacute care hasn't decreased because the practice hired two midlevel providers and because the physicians now are giving “focused physicals” to healthy patients (15-minute appointments).

  • Since implementing the system in 1996, the practice has seen consistently high patient satisfaction scores. “If the goal is customer service and meeting patients' perceived need to be seen, it doesn't really matter whether they need to be seen.”


Sue Herriott is a branch manager of the Carle Clinic in Urbana, Ill.

Accounting for doctors

D. Larry Miller, MD

  • Why accounting? According to Miller, “To negotiate with insurers from a position of strength, we must understand certain financial terms and their significance to our profitability.”

  • The fundamental equation in accounting is assets = liabilities + capital. This recognizes that both the debt holders and the owners of a practice have a claim to the assets.

  • Balance sheets illustrate this equation by comparing the practice's total assets with its total liabilities and capital. These sums must be equal for the statement to balance.

  • An income and expense statement shows you the bottom line — total revenue minus total expenses. Remember to include revenue from capitated contracts as well as the expenses you incur in caring for patients in capitated plans.

  • A quarterly schedule of operating expenses gives you an itemized list and compares the relative size of each expense area, as well as the year-to-date percentage of total expenses that area represents.

  • To stay on top of your practice's financial health, regularly monitor your accounts receivable (A/R); aged A/R; charges, receipts and adjustments; and the reimbursement rates your insurers are supposed to be paying.


Dr. Miller is a family physician in northern California and a consultant on group practice formation.

1. The MEDSTAT Group, JD Power and Associates. The MEDSTAT Quality Catalyst Program; 1998.

John Spicer is a senior associate editor of Family Practice Management.

Brandi White is associate editor.

Copyright © 1998 by the American Academy of Family Physicians.
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