Posted - 12/04/2009 02:03pm SVH eyes partnership with PRIMA
SVH eyes partnership with PRIMA
By Emily Charrier-Botts
INDEX-TRIBUNE STAFF WRITER
The Sonoma Valley Health Care District board is considering partnering with Marin General Hospital and several physician groups to form a nonprofit foundation aimed at bringing more doctors to practice in Marin and Sonoma.
The foundation would then give all parties better negotiating tools when seeking higher reimbursement rates from insurance companies.
The idea is to establish a nonprofit medical organization similar to those created by Kaiser or Sutter that works with both physicians and hospitals. In theory, the doctors are satisfied because they have a professional management system overseeing their practice, freeing them to focus on patients instead of paperwork. The hospitals in turn would have a larger pool of physicians who are more likely to filter patients to their facilities. Both the hospitals and doctors would theoretically benefit by achieving higher reimbursement rates from insurance companies, which are more willing to negotiate when there are larger numbers of medical professionals linked to an organization.
Tim Noakes, the chief financial officer at Sonoma Valley Hospital, said he reviewed a bill for a procedure he had done at a Sutter facility and noticed the Sutter hospital was paid three times as much as Sonoma Valley Hospital is paid for the same procedure. He explained that disparity occurs because Sutter works with hundreds of doctors who treat patients all over Northern California, giving Sutter more leverage to negotiate higher rates.
"How does Sonoma Valley Hospital ... obtain those rates? By being bigger," Noakes said. "The only way to access those greater rates is greater numbers."
Last spring, Sonoma Valley Hospital officials were approached by PRIMA medical group, a Marin-based physicians organization that manages doctors in Marin and Sonoma, who laid out their plans to create the PRIMA Medical Foundation, which will partner with Marin General Hospital and two other Marin-based physician groups. Joel Criste, chief executive officer of PRIMA, said he is reaching out to hospitals because the physician groups have the same trouble negotiating with insurance companies as small hospitals.
"The challenges of supporting physicians continue despite our size and our best efforts," he told the board during their meeting Thursday.
In addition to securing higher reimbursement rates, hospital officials are hopeful the partnership will bring more physicians to treat patients in Sonoma. Noakes and Chief Executive Officer Carl Gerlach agreed that the hospital's attempts to bring in physicians have been largely unsuccessful.
"Our history has not been good trying to recruit doctors to a small hospital in an isolated area. The probability of recruiting and retaining physicians is way higher with PRIMA," Gerlach said, adding that in the last 10 years the hospital has been able to recruit 10 physicians, only three of which stayed in Sonoma, while in recent years PRIMA has been able to recruit 15 physicians, 13 or which are still working in the area.
Sonoma Valley has a high cost of living and a small population, causing doctors worry they will not have enough patients to keep a practice afloat. PRIMA steps in by managing the practice, often giving physicians the opportunity to work in two geographic areas, such as Marin and Sonoma, providing a solid volume of patients.
"The interest of the physicians is how much can I make, will I be busy here and is there enough volume, which has been the issue here in Sonoma," Criste said. "With PRIMA, they're not isolated, they're part of a larger system."
Criste came to the meeting Thursday to ask the board to allocate $100,000 for the PRIMA staff to continue developing the master plan and business plan for the foundation, which would better identify the potential benefits the hospital could see by joining the foundation.
When the master plan is completed in the spring, it will be presented to the board for further consideration. Should the board decide to join the foundation, they will be asked to contribute $3.5 million over the course of several years to help get the foundation up and running. The other partners, including Marin General Hospital, will contribute similar or greater amounts.
Boardmember Madolyn Agrimonti at first said she was hesitant to approve expenditure of the $100,000 with the limited information provided. "I feel almost irresponsible voting for something I have so many questions on," she said.
Boardmembers Peter Hohorst and Dr. Dick Kirk supported the idea, as did the hospital's Finance Committee and senior management. "It's the price of admission for staying in business," Hohorst said. "We're too small to compete against Sutter ourselves. We need a big brother, and that big brother is PRIMA and Marin General Hospital."
The plan also earned support from Valley urologist J. Nevin Smith, who reminded the board that previous attempts to partner with larger medical providers including Sutter and Sisters of St. Joseph had been unsuccessful. "For 20 years, we've been trying to do what they're offering us," Smith said, adding that he's only seen the shortage of doctors in the Valley increase during his 40 years of practicing medicine here. "As of today, we have less physician manpower than when I started."
Ultimately, the board unanimously voted to approve the $100,000 in funds for further exploration of the hospital's role with the foundation. The board is expected to receive a full report in March and will be asked to make a final decision in April as to whether they will commit to joining the foundation.
The foundation would then give all parties better negotiating tools when seeking higher reimbursement rates from insurance companies.
The idea is to establish a nonprofit medical organization similar to those created by Kaiser or Sutter that works with both physicians and hospitals. In theory, the doctors are satisfied because they have a professional management system overseeing their practice, freeing them to focus on patients instead of paperwork. The hospitals in turn would have a larger pool of physicians who are more likely to filter patients to their facilities. Both the hospitals and doctors would theoretically benefit by achieving higher reimbursement rates from insurance companies, which are more willing to negotiate when there are larger numbers of medical professionals linked to an organization.
Tim Noakes, the chief financial officer at Sonoma Valley Hospital, said he reviewed a bill for a procedure he had done at a Sutter facility and noticed the Sutter hospital was paid three times as much as Sonoma Valley Hospital is paid for the same procedure. He explained that disparity occurs because Sutter works with hundreds of doctors who treat patients all over Northern California, giving Sutter more leverage to negotiate higher rates.
"How does Sonoma Valley Hospital ... obtain those rates? By being bigger," Noakes said. "The only way to access those greater rates is greater numbers."
Last spring, Sonoma Valley Hospital officials were approached by PRIMA medical group, a Marin-based physicians organization that manages doctors in Marin and Sonoma, who laid out their plans to create the PRIMA Medical Foundation, which will partner with Marin General Hospital and two other Marin-based physician groups. Joel Criste, chief executive officer of PRIMA, said he is reaching out to hospitals because the physician groups have the same trouble negotiating with insurance companies as small hospitals.
"The challenges of supporting physicians continue despite our size and our best efforts," he told the board during their meeting Thursday.
In addition to securing higher reimbursement rates, hospital officials are hopeful the partnership will bring more physicians to treat patients in Sonoma. Noakes and Chief Executive Officer Carl Gerlach agreed that the hospital's attempts to bring in physicians have been largely unsuccessful.
"Our history has not been good trying to recruit doctors to a small hospital in an isolated area. The probability of recruiting and retaining physicians is way higher with PRIMA," Gerlach said, adding that in the last 10 years the hospital has been able to recruit 10 physicians, only three of which stayed in Sonoma, while in recent years PRIMA has been able to recruit 15 physicians, 13 or which are still working in the area.
Sonoma Valley has a high cost of living and a small population, causing doctors worry they will not have enough patients to keep a practice afloat. PRIMA steps in by managing the practice, often giving physicians the opportunity to work in two geographic areas, such as Marin and Sonoma, providing a solid volume of patients.
"The interest of the physicians is how much can I make, will I be busy here and is there enough volume, which has been the issue here in Sonoma," Criste said. "With PRIMA, they're not isolated, they're part of a larger system."
Criste came to the meeting Thursday to ask the board to allocate $100,000 for the PRIMA staff to continue developing the master plan and business plan for the foundation, which would better identify the potential benefits the hospital could see by joining the foundation.
When the master plan is completed in the spring, it will be presented to the board for further consideration. Should the board decide to join the foundation, they will be asked to contribute $3.5 million over the course of several years to help get the foundation up and running. The other partners, including Marin General Hospital, will contribute similar or greater amounts.
Boardmember Madolyn Agrimonti at first said she was hesitant to approve expenditure of the $100,000 with the limited information provided. "I feel almost irresponsible voting for something I have so many questions on," she said.
Boardmembers Peter Hohorst and Dr. Dick Kirk supported the idea, as did the hospital's Finance Committee and senior management. "It's the price of admission for staying in business," Hohorst said. "We're too small to compete against Sutter ourselves. We need a big brother, and that big brother is PRIMA and Marin General Hospital."
The plan also earned support from Valley urologist J. Nevin Smith, who reminded the board that previous attempts to partner with larger medical providers including Sutter and Sisters of St. Joseph had been unsuccessful. "For 20 years, we've been trying to do what they're offering us," Smith said, adding that he's only seen the shortage of doctors in the Valley increase during his 40 years of practicing medicine here. "As of today, we have less physician manpower than when I started."
Ultimately, the board unanimously voted to approve the $100,000 in funds for further exploration of the hospital's role with the foundation. The board is expected to receive a full report in March and will be asked to make a final decision in April as to whether they will commit to joining the foundation.
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