ARIA is Formed

Austin Regional Clinic is forming an Independent Practice Association, aligning with primary care practices in a strategy to give patients more physician choice and physicians increased patient access.

The IPA, Austin Regional Independent Associates will start with 25 to 30 primary care physicians and will grow to 150 to 200 primary care physicians over the next three years, says Norman Chenven, CEO of ARC. The clinic currently has about 78 primary care physicians.

Approximately 20 primary care physicians have expressed interest in joining ARIA, although ARC has not yet recruited physicians. The IPA is expected to be fully operational by Sept. 1, Chenven says.

The result of more than two years of talks between ARC and primary care physicians in Austin, ARIA is a response to the needs that have developed as the result of the rapid growth of managed care, Chenven says.

’We believe that this is a preferred way for doctors to relate to health plans,’ Chenven says. ‘The IPA is actually a business structure of its own. It becomes an umbrella organization that helps with the delivery of care and also helps with the monitoring of quality of care.’

ARC decided to form ARIA because employers increasingly seek high-quality and cost-effective health care delivery systems for their employees, Chenven says. Insurers and health maintenance organizations want to contract with well-run, responsible, physician-directed organizations.

A physician-owned IPA, ARIA will encourage all primary care physicians to become shareholders but will allow physicians to affiliate on a non-ownership contractual basis as well. ARIA will develop a network of specialists and hospitals, and will contract with multiple HMOs and health plans to provide services to their members.

ARC will remain a separate practice, says Tom Young, ARC's executive administrator.

So far, primary care practices that have agreed to join ARIA include Austin Family Care Center and South Austin Medical Clinic.

Steve Margolin, a physician with Austin Family Care Center, says his four-person practice and its patients will benefit from joining ARIA. The alliance will simplify processes like billing and contracting with managed care companies.

’It's uniform for the patients. It's uniform for the physicians,’ Margolin says.

Bill Moran, a physician with Austin Family Care Center, says ARC's experience in dealing with managed care plans is attractive.

’ARC has been doing this sort of thing for a number of years and has a good and long track record with managed care, so it seemed a natural fit.’

Relatively new to the Austin health care market, IPAs enable solo and small group practices to pool their resources and obtain needed expertise while still retaining their independent practices.

PIPA, Preferred Independent Physicians of America, is an Austin-based multi-specialty IPA with 150 physicians, including 50 primary care physicians. Laura Kabay, executive director of PIPA, says she welcomes ARIA to the market. Since her group is a multi-specialty practice and ARIA is primary care-based, the two groups can co-exist, Kabay says.

’I certainly welcome the competition in town, and given the fact that they have a group clinic as well as an IPA, I certainly think Austin can handle the two different groups,’ Kabay says. ‘I've always thought that PIPA could coexist quite well with ARC in Austin.’

Jo-Ann Britt-Reilly, president of the Texas chapter of the IPA Association of America, says the alliance should work well for the participating primary care practices.

It's probably a good strategy in that they can take advantage of the managed care contracts that Austin Regional Clinic has already negotiated and there's probably some way they can access the administrative capabilities of Austin Regional Clinic,’ Britt-Reilly says.

Young compares an IPA to a cooperative between farmers, where individual farmers benefit by joining forces and resources.

’The IPA allows independent physicians to gain advantages,’ Young says.

Patients of ARC physicians and the participating primary care practices will probably see little change except a greater choice of physicians, Chenven says.

ARC currently is searching for an executive director for ARIA.

ARIA will use management from Mediview, ARC's management service organization. Mediview's 30 employees will deal with the needs of HMOs and their members, including negotiating contracts.

Source: June 1996 Austin Business Journal

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