Profile physicians and local markets

All healthcare is local. From treatment modalities to hospital length of stay to surgical procedures, prescription drug therapy and reimbursement methods, geography influences healthcare.

Understanding the external forces impacting your local healthcare market will influence the strategy you develop and the tactics you use with your healthcare providers. The real challenge to the pharmaceutical industry is to know the trends in each geographic region – particularly how physicians are directly impacted by reimbursement modalities.

A primary care physician in San Diego may know the exact capitated dollar he or she is receiving for each signed contract (somewhere around $9 per-member-per-month). The same primary care physician in Chicago may have no idea how many contracts he or she has signed, much less how much money he or she receives for seeing patients.

Profiling the region

Everyone knows the California market is heavily penetrated by capitated managed care, and competition for health maintenance organization contracts is fierce. Boston is another area of heavy managed care concentration, but physician reimbursement is much higher (a capitated primary care physician averages $15 per-member-per-month) and hospital lengths of stay are longer. How can representatives get a handle on a region?

The following questions may help:

•Â Are there national managed care organizations, such as United, Humana, Cigna, Aetna or Blue Cross/Blue Shield, in the region? Have any pulled out of the region?

•Â Are there large employers in the region? If so, how large? Less than 1,000 employees? As many as 5,000 employees? Or 10,000 employees?

•Â Are there integrated delivery systems in the area with hospitals and physicians forming physician-hospital organizations to contract with managed care organizations?

•Â Is there a business coalition, such as Pacific Business Group on Health or Central Florida Health Care Coalition, in the region? If so, what is their focus - quality, group purchasing, legislation? Who are the members?

•Â How active are the state HMO organizations? Are they important in your region? Do they hold annual meetings? Are you allowed to attend? Exhibit?

•Â What are the general population demographics? Is there a high concentration of elderly or retired people, a significant indigent population or a young, transient population?

•Â What is the district manager saying about managed care and the accounts in your region? Are other representatives concerned about managed care? Why?

•Â Is there a national account manager assigned to the area? What is his or her strategy? Does he or she have specific pull-through ideas for you?

•Â What is in the local newspapers? Managed care is always a prime target for tragic headline stories.

Answering these questions will give representatives a sound base of knowledge about the area and what to expect from physicians.

Profiling a physician

It is not as easy to get a picture of the individual physician's or physician groups' primary source of income. Only about 15% of physicians are capitated. Most are working in a discounted fee-for-service environment. I would not recommend that a representative ask a key prescriber, "Would you mind telling me exactly how you are paid, and, oh, by the way - how much?" There are more subtle and professional ways to gather important information. For example:

•Â How are local physicians responding to managed care penetration? Are smaller groups joining together to form larger, multi-specialty groups?

•Â Are group practices banding together to form an independent practice association to contract with MCOs?

•Â Are physicians joining the hospitals to form physician hospital organizations?

•Â Do your physicians contract with all managed care organizations in the area? Which ones? This information is usually readily available at the reception desk, and it may be a source of conversation with the receptionist.

•Â Which managed care organizations are on your physicians' financial radar screen? You might ask, "Doctor, I see you contract with United HealthCare. Are they a good source of patients for your practice?"

•Â What are the topics of conversation in the office? Is office staff heavily involved with phone calls from the managed care organizations? From the pharmacy benefit management company? How much time is spent clarifying, explaining or begging for patient care?

•Â Are your physicians working harder? Longer hours? Saturday and evening hours?

If managed care is affecting your physicians' practices, directed questions will give them a chance to talk about it – and they will! Once the region is profiled and the individual physician or group is profiled, you can establish your action plan to work with them in the new healthcare environment. PR