the Grace Report Provides Important Private Intelligence, Gathered Exclusively
for OBs & GYNs, Their Practice CEOs, and Key Administrators.

Headlines- June 26, 2006
THE GRACE REPORT

Headlines- June 26, 2006

Commentary and Opinion by Robert L. Michel:
Key Lesson Learned: Detailed Data Unlocks More Ob-Gyn Income

IN THE PAST YEAR, WE HAVE WRITTEN ABOUT SEVERAL OB-GYN SUPER GROUPS and how they are using information technology to support their negotiations with health insurers. The latest example comes from the Regional Women’s Health Group LLC (RWHG), based in Voorhees, New Jersey. RWHG shows how detailed information about patient outcomes, billing, and protocols can help ob-gyns earn more and keep costs down.

The ob-gyns who formed RWHG had several goals. A primary objective
was to use the integrated practice’s larger size to negotiate better terms from managed care plans. However, it was soon learned that just having an ob-gyn practice with 55 physicians wouldn’t automatically generate more reimbursement from payers. As you will read on pages 2-9, RWHG quickly realized that enriched information on the quality of care provided by the group would be a cornerstone in winning higher reimbursement from the major payers in RWHG’s service area. In particular, if RWHG could demonstrate that its ob-gyns delivered care that was above average and better than competing ob-gyns in the region, payers would respond with a better financial package.

As Thomas Kay, M.D., a founder and the current President and CEO of
RWHG points out, physicians have not been good at collecting data on
what they do. To change this situation, RWHG invested considerable
capital and resources to develop a sophisticated data collection system. “If you look at our information systems today, they are impressive,” he explained. “Our data is so good that often times it is better than the data that the health plans have.”

It is the data produced by this system that the group uses to negotiate
improved reimbursement from insurers. RWHG has also used this data to develop a pay-for-performance program with selected payers and to justify an 8% reduction in its liability insurance premium.

Ob-gyns and their practice administrators should take careful note of
these outcomes—along with the trend of larger ob-gyn groups investing
substantially to create sophisticated data systems. These are early signs that the market is willing to pay greater rewards to ob-gyns who get better outcomes. However, those rewards are only triggered when ob-gyns can provide detailed information that documents enhanced performance.

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Integrated Ob-Gyn Practice In New Jersey has 55 Docs

Ob-gyn “supergroup” uses detailed information to negotiate better reimbursement with payers

CEO Summary: When Women’s Regional Health Group LLC, was formed in Southern New Jersey in 2000, its ob-gyns quickly learned that they would need more than just size to negotiate more effectively with health plans. One business strategy was to develop sophisticated risk management protocols and a system to collect clinical data. Armed with data, Regional Women’s Health Group has successfully negotiated increased health insurance reimbursement, a lower malpractice premium, along with a pay for performance program that rewards the physicians for better quality outcomes.

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Clinical Data Reporting Is Key to NJ Group’s Success

Sophisticated informatics system produces enriched data that helps in payer negotiations

CEO Summary: Now numbering 55 physicians and 21 practice sites,
Regional Women’s Health Group (RWHG) of Voorhees, New Jersey, is using an enhanced information system to gather enriched data sets on quality of care and patient outcomes. This detailed information has been an important reason why RWHG has improved reimbursement and account collections and successfully negotiated pay-for-performance programs. This information also has been used to persuade RWHG’s malpractice insurer to offer a substantial premium discount.

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Alabama Ob-Gyn Pioneered Practice in Fertility Services

20-year-old ART Fertility Program of Alabama prepares to open its fourth office this summer

CEO Summary: Over the past 20 years, ART Fertility Program of Alabama has built a flourishing practice in fertility services. To ease travel demands on patients, ART uses video conferences between its remote offices and physicians in its central office in Birmingham. It also offers a Shared Risk Refund Plan in which patients pay a reduced rate for two cycles of treatment and get a 70% refund if they don’t deliver a baby. Founder Kathryn L. Honea, M.D., has developed a growing medical practice in a state where insurers do not cover in vitro fertilization.

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HPV Vaccine Cleared by FDA, Now Ready for Clinical Use

Ob-gyns should be ready to answer questions about the new HPV vaccine and how it works

CEO Summary: Earlier this month, Merck & Co. gained FDA clearance to sell Gardasil, its HPV vaccine, in the United States. This clearance launches a new cycle of change in cervical cancer screening and treatment. In California, one solo practice ob-gyn is ready to offer the vaccine because of the high rates of HPV infection she sees across every age group of her patients. This same ob-gyn believes that pediatricians will actively recommend and offer the vaccines, particularly to their adolescent female patients.

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Managed Care News: Discount Pricing for Zocor Signals Big Changes Ahead

Merck contracts with WellPoint & UnitedHealth to sell Zocor at a price that’s cheaper than generics

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Ob-Gyn Technology Update: Ob-Gyn Creates Redesign Of 100+ Year-Old Speculum

Motivated by flaws of traditional speculum, William Guinan, M.D., builds a “better mousetrap”

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INTELLIGENCE: Late and Latent

• FERTILITY DOCS BENEFIT FROM USING THEIR OWN
  FERTILIZATION SERVICES
• INDIANA MIDWIFE GETS PROBATION FOR
  PRACTICING WITHOUT A LICENSE
  

Look for the next briefing on Monday, July 17, 2006.

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