Update on Health Care Reform

Continued from Page 40
From left to right: Peter Welch, CIGNA; Steven Lynch, Healthnet; Brian Sassi, Blue Cross of
California; Gerald Bishop, M.D., Aetna; Michael Anne Brown, M.D., Blue Shield; Don Crane,
CAPG; Cindy Ehnes, DMHC; David Hansen, UnitedHealthcare.
8. What does this do to disease management?
The data-sharing negotiations
threatened to stall over the medical
groups’ irritation with disconnected,
remote disease management vendors
“pinging” upon patients and frontline
physicians. All parties have agreed to
enter a one-year collaborative process
under the aegis of the California Quality
Collaborative, modeled after a successful
effort in Minnesota. The workgroup
will seek changes that will improve the
accuracy, acceptance, coordination and
reach of disease management.
9. What happens next? Converting
noble philosophical intentions into better
service is, of course, the real test.
Conventional wisdom reminds us that the
devil resides in the details. In the weeks
following the signing ceremony, steps
have been quietly undertaken by stakeholders
from groups, plans, purchasers
and laboratories to operationalize the data
transfer. Several imperatives emerged:
• Process must be simple, uniform
to the degree possible and
cycle automatically.
• M i n i ma l new overhead c ost
to groups
• Data should flow in a format, which
will satisfy multiple reporting specifications
(NCQA, HEDIS, P4P).
• Data files should be easily “opened”
4 2 | CAPG HEALTH WINTER 2008
and practical to apply by parties at
both ends.
• HIPAA compliant, of course
• S uppor t t he ef for t s D isease
Management Coordination workgroup
being convened by CQC in
early 2008.
• CAPG groups can expect a toolkit in
late January to facilitate the transmission
and receipt of the newly enriched,
two-directional flow. ■
* What is the delegated model? California has
created a system for health care delivery unlike
that of the other 49 states. Statewide and national
health plans sell health insurance policies for prepaid,
comprehensive “HMO” care to employers
and families, but delegate most of the oversight of
care and quality improvement to tightly organized
local medical groups. These groups must fulfill an
exhaustive list of qualifications and ongoing external
audits and performance measures. Since the care is
prepaid, all parties share both ethical and business
incentives to:
• Keep populations healthy with preventive care;
• Cope with chronic illnesses using the best modern
knowledge;
• Intervene early when problems arise;
• Use scientific evidence and sophisticated computerized
tools to drive decisions; and
• Keep excellent coverage affordable.
Unlike PPO and other types of coverage, plans and
groups in the delegated model embrace extensive
performance measurement and public reporting of
quality, patient satisfaction and efficiency.
Continued from Page 36
pany was acquiring a large MSO that
owned an 80% interest in a subsidiary
MSO. The transaction required the
subsidiary’s 20 % minority owners to
sell their interest, for which the majority
shareholders’ appraisers offered
them $500,000. Not satisfied with
the first appraisal, the minority shareholders
got a second appraisal, which
determined that the market value of
the smaller MSO was nearly double the
first appraisal.
It was finally agreed that the value of
the minority shares was $950,000.
Lesson learned: It isn’t sufficient to
state an amount that a buyer is willing
to pay for your practice. How much are
other buyers willing to pay for your
practice? Fair market value is the amount
agreed upon between a willing buyer and
a willing seller, both having knowledge
of all relevant facts, and neither being
under any compulsion to buy or sell.
CONCLUSION
Any appraisal of a practice should utilize
several methods to create a range of
values that provides a reality check for
the conclusion. Your clients may have
an idea of what it would cost to create
their practice today, and what practices
like theirs are selling for, but in the
final analysis, if they are not satisfied
with a potential acquirer’s valuation
of their practice, it may be prudent to
advise them to hire an appraiser and
get a second opinion on the value of
their practice.
Medical Development Specialists is experienced
in providing certified, fair market
valuations to its hospital, medical group
and physician clients. You are invited to call
Kenneth E. Avery, CPA, Vice President of
Medical Development Specialists, at (310)
531-8228 with your questions regarding fair
market valuations of medical groups, solo
practices, imaging centers, surgery centers and
other types of health care organizations. ■