Renamed Marin-Sonoma IPA would be 500 doctors, include big, small hospitals

NORTH BAY -- A leading Marin County doctors' association is heading an effort to create a potentially powerful network of hundreds of North Bay physicians that, if successful, would significantly alter the region's health care landscape.

The Marin Independent Practice Association said it will add physicians across Sonoma County to its network , including those associated with the county's largest hospital, Santa Rosa Memorial, along with Healdsburg District and Palm Drive hospitals. That's in addition to existing relationships with Sonoma Valley and Petaluma Valley hospitals as well as its presence at Marin General and Novato Community hospitals.

The network is intended to achieve the kinds of efficiencies of large physician organizations such as those associated with Kaiser Permanente and Sutter Health.

Details of the network are still being worked out, according to the newly renamed Marin-Sonoma IPA. A final agreement could be reached within a matter of days.

Memorial's physician group, Annadel Medical Group, which contracts exclusively with St. Joseph Heritage Healthcare, is exploring a number of options. St. Joseph Heritage Healthcare is the medical practice foundation of St. Joseph Health System, which owns Memorial.

"We are currently exploring ways in which St. Joseph Heritage Healthcare medical practice foundation and the Annadel Medical Group can partner with other key health care providers in the region," said C.R. Burke, president and chief executive officer of the foundation. "At this point, no relationships have been finalized."

While hospitals stand to benefit from the expanded Marin-Sonoma IPA, it is the physicians themselves who align with the network.

With Marin-Sonoma IPA's expansion, the number of physicians affiliated with the network would grow to approximately 500 primary care providers and specialists -- a significant boon for the smaller physician practices and hospitals that struggle to compete with health care giants in recruiting and retaining doctors.

Previously, the IPA had about 350 members, with 250 in Marin and 100 in Sonoma and Petaluma.

"By expanding Marin-Sonoma IPA further north we can help private physicians continue to practice independently and give patients better access to a larger physician network," said Joel Criste, chief executive officer of Marin-Sonoma IPA, which is a health care network that represents physician members. The network, Mr. Criste said, will encourage "collaboration across autonomous physicians and facilities to improve patient access, information and quality throughout the North Bay."

It's a regional approach that could help keep once-struggling hospitals afloat, perhaps even thrive, as clinical integration and cost-reduction efforts take shape in lieu of the federal health overhaul last year.

"If we don't do it regionally, I don't believe we will be successful," said Daymon Doss, who just retired as chief executive officer of the Petaluma Health Care District but is now the executive director of the Northern California Health Care Authority.

"What we're trying to create is a virtual system" that spans the Highway 101 corridor, Mr. Doss added.

Sonoma Valley and Petaluma Valley hospitals were both already supporters of the Marin IPA. The inclusion of Healdsburg District and Palm Drive is essentially the finishing touches on what became known as the Regional Action Plan, a tacit agreement between Sonoma County's independent hospitals to seek relationships that drive down costs and offer more services.

Richard Polheber, the new chief executive officer at Palm Drive in Sebastopol, said becoming part of the network could be a key element in the hospital's survival. The 37-bed facility sold off $11 million in bonds to emerge from Chapter 9 bankruptcy protection last May.

"What's attractive to us is that we become part of an entire team, as a single body to contract with insurance companies," Mr. Polheber said, adding that it could lend the hospital stability while growing its patient base.

Physicians increasingly want the stability of being in a network, versus private practice, and don't want to negotiate with insurance companies, Mr. Polheber said.

"So you have to create vehicles for primary care physicians," he said.

Sutter Health, Kaiser and Memorial's owner, St. Joseph Health System, have all invested heavily into their physician foundations, in part to address an anticipated shortage of primary care physicians as 32 million more Americans join the health care system under President Obama's health care law. In Sonoma County, that number is expected to be around 56,000, according to a February report by the UCLA Center for Health Policy Research.

"This is about physicians," Mr. Doss said. "If it's not about physicians it won't work."

Having a network of nearly 500 physicians gives every party involved increased negotiating power with insurers, Mr. Doss and Mr. Polheber both said, as well as the ability to better recruit physicians.

Marin-Sonoma IPA's expansion comes barely a year after the federal Affordable Care Act was passed, which encourages collaboration between health care providers as well as the formation of what are known as accountable care organizations (ACOs), which can help reduce costs while improving access and patient care.

Mr. Doss and others said the expanded Marin-Sonoma IPA will enable the smaller hospitals to better carry out one of the health bill's main goals – keep patients out of costly hospital beds by providing preventative, integrated care.

Mr. Polheber said the Marin-Sonoma IPA would be a critical piece in creating health information exchanges, which would save participating hospitals money, and better serve patients, by preventing duplicative care.

The Center for Medicare and Medicaid Services estimates that ACOs could save Medicare between $170 million and $960 million over three years.

About 16 percent of Sonoma County's population receives Medicare.

"It's more important to me, as a practicing physician, to help align the resources of our shared community, rather than await Sacramento or Washington to figure out the medical care needs of the North Bay," said Mark Wexman, Marin-Sonoma IPA's board chairman.

Mr. Criste, chief executive officer of Marin-Sonoma IPA, added, "We're getting agreement that the whole is more important than the parts."

Mr. Doss, who as executive director of the Health Care Authority lobbied for and coordinated other districts' support, said the Marin-Sonoma IPA expansion and the Regional Action Plan could eventually lead to the formation of an insurance product that would compete with Kaiser. Kaiser Santa Rosa estimates it has nearly half of Sonoma County's Medicare patients and about 45 percent of the county's privately insured residents.

"This is a response to the hole that was left by Health Plan of the Redwoods," Mr. Doss said, referring to a local HMO that went bankrupt in 2002. "Except we are not insurance. We're not looking at an insurance product, but we may align ourselves with a commercial product." A third-party insurer would administer and market that product, Mr. Doss said.

An independent practice association is a network of physicians who contract with health maintenance organizations, better known as HMOs. Such a network typically serves as a corporate structure for negotiating and administering contracts with insurers for its member doctors.

While physicians from the hospitals can be aligned with one another, it does not mean the hospitals are merging operations in any way. Some contractual elements may transpire in the coming months, Mr. Polheber said.

The Regional Action Plan could grow further still, as other members of the Northern California Healthcare Authority, also known as the Joint Powers Authority, have expressed interest, said Mr. Doss. The health care authority was formed in 2007. Its five members are the Palm Drive Healthcare District; Sonoma Valley Health Care District; North Sonoma County Healthcare District, which oversees Healdsburg District Hospital; Mendocino Coast Healthcare District; and the South Humboldt Community Healthcare District.

Mr. Doss said the expansion plans have been ongoing for about 18 months.

Marin-Sonoma IPA said it is well-positioned to advocate for the health for the medical community as a whole, and that cross-county care was increasingly common.

"With so many of our patients accessing care across county lines, this is an important step to support physicians working together to advance better communication, patient care and clinical outcomes," said J. David Andrew, medical director of Marin-Sonoma IPA.