An independent physician association (IPA) is a business entity organized and owned by a network of independent physician practices for the purpose of reducing overhead or pursuing business ventures such as contracts with employers, accountable care organizations (ACO) and/or managed care organizations (MCOs). There are substantial opportunities for innovation in delivery system modeling and benefit design in the creation of physician networks. Specifically, creation of practice networks involving medical homes may accelerate important and necessary changes in health care delivery.
The core business of family physicians is managing the care of patients. Patients value their relationship with their primary care physician above any other in the system. Patients also look for medical homes led by physicians. This relationship, expertise, and training make physicians an indispensable resource in the health care system and provides them a point-of-difference in the healthcare marketplace.
Physicians are exercising their market leverage through a variety of contracting and affiliation strategies which allow a group of physicians to speak with one voice. Such strategies also enhance physicians' access to the capital and management resources necessary to pursue cooperative business ventures such as managed care contracts and direct health care services contracts with employers.
Purchasers of health care services are more likely to sign contracts with larger groups of physicians who can provide comprehensive services, within a specialty or in a specific geographic area, demonstrate high quality outcomes, assume risk, and provide unique, innovative, or collaborative health care services. These services include comprehensive care of chronic medical conditions that benefit from collaboration among multiple entities such as specialty practices, imaging centers, home health agencies, and hospital systems working as a network. Such networks have and will likely continue to develop with different presence in different markets. Those IPAs capable of controlling medical expense for large numbers of patients and assuming full risk capitation can exercise maximal control in the current environment. Partial risk sharing, however, is more likely to be available to many IPAs. Optimally functioning IPAs can offer many potential benefits, including:
Physicians considering the development of, or participation in, an IPA should be aware of the potential risks. This is especially true when the IPA accepts significant risk for healthcare expenditures. These risks include:
Physicians contemplating the development of, or participation in, an IPA should consider the following guiding principles: