Physician Practice: Next Steps

PROLOGUE: Lingering visions of the ideal health maintenanceorganization (HMO) still color policymakers’ perceptionsabout the less organized provinces of the health system. Itis still fashionable to argue that the object of policy shouldbe to nurture competition for consumers’ allegiance betweenhigh-performance health plans. In fact, though, relatively fewsuch plans exist. Evidently, a rare and fortuitous combinationof circumstances is needed to incubate the kind of large multispecialtymedical groups on which true HMOs are built. Meanwhile, mostmedical encounters still take place in rougher settings, anddespite policymakers’ apparent lack of interest in theaverage neighborhood doctor’s office, it is in such officesthat the current battle for improvements in quality and efficiencywill probably be won or lost. After the experiences of the 1990s,a strategy of herding doctors into large corporate settingsno longer seems to be a credible option.

The tools of quality improvement—performance measurement,incentive payments, information technology, and chronic caremanagement—all work differently depending on the settingin which they are used. Moreover, the strategic and logisticalchallenge of deploying these tools throughout a highly decentralizedsystem of small, largely independent units will be immeasurablymore arduous and labor-intensive than the alternative scenarioof galvanizing large organizations with competitive pressure.Small wonder that policymakers would prefer an industrial-strengthmarket solution. But the market for physician services is notonly local, it is personal, and impervious to big-bang approaches.Insurers, employers, and consumers who want more value for theirhealth care dollars should prepare themselves for a long, hardclimb.

Such a prospect, at any rate, is what the following papers byRobert Cunningham and by Diane Rittenhouse and colleagues appearto portend. Cunningham examines data from the American MedicalAssociation (AMA) and other sources showing current trends inpractice size, and he cites recent studies showing the stalledgrowth of multispecialty groups. Innovative payers have begunto recognize the importance of incentives for efficiency andquality improvement at the capillary level, and a role for medicalprofessionalism is envisioned as well. Allan Korn, chief medicalofficer for the Blue Cross and Blue Shield Association, contributesa payer’s perspective.

Rittenhouse and colleagues take a different approach but reachsimilar conclusions. Their survey of California physicians findsthat even when independent practice associations (IPAs) areinvolved in implementing supports and incentives for qualityimprovement, there is a wide gap between the performance ofKaiser’s integrated organization and the loosely organizedmedical groups in a typical IPA. They find that the currentstate of U.S. physician organization raises "disturbing questions"about closing the quality chasm.

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