Why these competing providers are joining forces: To avoid being 'consumed' by a hospital

'If we don't do this, I think it's certain we will be consumed by a hospital system'

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In an attempt to keep their practices from potentially being swallowed by a neighboring health system, five of Ohio's largest physician groups have teamed up to create their own independent physician network known as the Ohio Independent Collaborative (OIC).

According to a national survey from the Physicians Foundation, last year just 35% of doctors described themselves as independent practice owners, down from 49% in 2012 and 62% in 2008.

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In order to maintain their independence, practice leaders in Ohio decided to take a collaborative approach.

The founding members of OIC—which launched on Wednesday and includes more than 400 doctors who currently serve more than 450,000 patients—are:

  • Community Health Care;
  • Northern Ohio Medical Specialists;
  • Pioneer Physicians Network;
  • Premier Physicians; and
  • Unity Health Network.

All five of the founding groups are located in northern Ohio, but OIC officials say they hope to bring in members from other parts of the state in the coming months.

The OIC providers will all have operational and financial independence, but will work together to share insurance risk and employ group purchasing.

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OIC President Gary Pinta says of the partnership, "If we don't do this, I think it's certain we will be consumed by a hospital system and we will lose our brand of care." He adds, "There is a place for us. This is a way for us to scale up and do that."

And by remaining independent, collaborative chair Robert Kent says the practices will be able to provide lower-cost options to patients, who will be able to continue seeing their local physician.

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In addition, Pinta says that members of the collaborative will be able to better coordinate patients' care and have more leverage to negotiate more favorable contracts with insurers. He says that OIC will seek out hospitals and other providers to join with the collaborative in pursuing risk-based contracts (Powell, Akron Beacon Journal, 8/4; Ross, Cleveland Plain Dealer, 8/5; Magaw, Crain's Cleveland Business, 8/5; AP/The News-Herald, 8/5).

The Advisory Board's take

Rivka Friedman, Medical Group Strategy Council

Partnerships like OIC may indicate growing concern among independent physicians that aligning with a hospital will impact not only their brand, but their ability to deliver cost-effective care.

With high-deductible health plans on the rise, patients are growing more sensitive to the price of their care, and more attentive to which providers in their market offer competitive pricing. Health care is becoming a team sport; the team that wins will provide care that is not only high-quality, but affordable.

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