Despite extensive education in science, medicine and human behavior, most physicians have never received training in how to run a business. This tends not to be problematic if they are employed. Today, however, the ability to run a successful private practice requires more than hard work, sound judgment and compassionate bedside manner. In the era of health care reform, medical practice has become more business-intensive as providers shift to electronic health records and adjust to increasingly complex financial relationships with insurance companies.

Historically, independent physicians associations, or IPAs, have successfully negotiated with carriers on behalf of individual practitioners. Of late, IPAs have become even more crucial, and their role is much expanded.

Consider Hawaii Medical Service Association’s latest initiative. During the past two years, HMSA has changed its traditional fee for service to a reimbursement plan inspired by an existing treatment model called the patient-centered medical home.

The vision of the patient-centered medical home was brought to the forefront in Hawaii by Dr. Calvin Sia and other Hawaii pediatricians in the 1960s. Traditionally, a patient-centered medical home has focused on the enhanced partnership between patients and providers and a sense of shared responsibility for maintaining good health.

HMSA has adopted this proven model and tied it to electronic medical records in an effort to ensure optimal efficiency and positive outcomes. Providers are paid a small amount per member per month based upon which of three levels of participation they maintain in the patient-centered medical home program. There is also a nominal incentive offered quarterly for quality care and an annual share of any cost savings that HMSA may enjoy as the result of provider compliance with the patient-centered medical home platform.

Indeed, HMSA has been pleased with the economic and clinical outcomes of the patient-centered medical home, but the effort to optimize efficiencies in health care reform is far from complete. While patients who participate in a well-run patient-centered medical home may experience better health outcomes, the overall cost of health care is still driven up by those who do not. Substantial resources are still spent on inappropriate emergency department visits and avoidable readmissions to the hospital. Chronic disease management, which usually requires a range of providers, still lacks optimal coordination of care. Specialists have yet to be included in the model.

Though the patient-centered medical home has jump-started provider health care transformation, there are calls for a more comprehensive, system-wide solution — one that is now under construction. The Patient Protection and Affordable Care Act, the centerpiece legislation for health care reform, authorizes the Centers for Medicare and Medicaid to create a Medicare Shared Savings Program which contracts with Accountable Care Organizations. This initiative is designed to promote accountability for a defined patient population and to encourage investment in infrastructure and redesigned care processes for high-quality and efficient service delivery.

Accountable Care Organizations typically bring together independent primary care practices, medical specialists and hospitals to collectively care for a designated population and, if done successfully, share in the benefits. Throughout the nation, hospital groups and providers are beginning to organize. It is even conceivable that large patient-centered medical homes sponsored by the independent physicians associations will partner to achieve highly effective Accountable Care Organizations.

The ability of independent physicians associations to effectively represent the interests of physicians and their patients is now more important than ever. Accountable Care Organizations are, by definition, big organizations that care for many people. With large-scale fiscal and administrative interests working to drive the process, who will preserve the soul of medicine and the sacred relationship between provider and patient? Independent physicians must work together and speak with a common voice to ensure that Accountable Care Organizations facilitate not only better outcomes, but also care that considers the unique needs of each individual.

Ira Zunin, M.D., M.P.H., M.B.A., is medical director of Manakai o Malama Integrative Healthcare Group and Rehabilitation Center and CEO of Global Advisory Services Inc. Please submit your questions to info@manakaiomalama.com.