Strengthening the Rural Health Infrastructure

Emerging Models

Managed Care & Network Development

This session provided examples of provider network organizations and managed care plans operating in rural areas. Dr. Sorensen suggested that the market in the Nebraska panhandle—where there are great distances, low population density and local control issues—was ripe for "virtual integration" of multiple providers through contracts. He described the steps it took to form the joint venture known as Western Health Partners which offers Preferred Provider Organizations (PPOs), point-of-service (POS), and health maintenance organization (HMO) products, and what steps must yet be taken to assure future viability and success.

Among the lessons learned about forming networks that he shared with the audience were:

• Physician leadership is crucial.
• A compelling reason to form a network is a requirement.
• It will take longer than you think it should.
• Members do have to cede some power to the network.

Dr. Sorensen felt that State Offices of Rural Health could be helpful to newly emerging networks by educating rural providers and consumers on the concepts of managed care, with validating network leaders' efforts and with facilitating Medicaid contracting. Dr. Sorensen also said that antitrust protections may be useful for some rural networks.

Dr. Robbins examined the contribution to rural health care made by an integrated delivery system (IDS). From his experience at Carle Clinic and networking with other large HMOs, he suggested that an IDS can decrease health care costs, increase standardization of care, increase access to primary care physicians and specialists, and keep local hospitals alive. He feels that public health care policy has had its pluses and minuses. He considers the new formulas in the Balanced Budget Act a plus.

Other pluses are:

• The 1970 HMO laws, which allowed rural hospital growth.
• The establishment of rural health clinics.
• Incentive programs for getting new physicians to underserved areas.

Dr. Robbins considers antitrust laws, any willing provider laws, variable reporting requirements, and slow bureaucracy as negatives. He feels there is an opportunity now for public policy to support managed care and to increase support for rural hospital infrastructure. He predicts that there will be 20-30 national health care corporations and population based health care in the future.

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