Dan Gottry - Blog

Dan Gottry's Blog

Thursday, September 07, 2006

OPGA/POINT Weighs In

Thank you Eric, for reminding everyone that "competition" is an American foundation, and since the entrepreneurial spirit of independents has created the service delivery system that currently provides around 75% of the orthotics and prosthetics to the U.S. market, it seems logical that a "lack of understanding" of market conditions is what could allow Hanger/Linkia to dominate. I have read with great interest, the recent postings regarding Hanger/Linkia and now feel it is time I put in my two cents worth. Although this post is a bit lengthy, I believe it is of the utmost importance that each of you on the list serve read it and form your own opinion...then the choice is yours. This post is in no way meant to be a sales pitch but an opportunity for everyone to make that choice and then to make a difference. In order to make the correct choice for you, it is necessary that you have all the facts.

Independents are now forced to re-evaluate their perception that the world understands the quality of their professional services and because of that, will offer them the opportunity to continue to provide these services at traditional reimbursement levels. Economics forces tough choices when funds available are not sufficient to purchase all needs. Competition on price, while often brutal, is a fact of life. You are correct in recognizing that networks are a viable strategy for independents to compete with Linkia. OPGA, is a nationwide network of more than 1,100 independently owned and operated orthotic and prosthetic facilities. These companies have joined together to better compete in the ever-changing health-care environment.

Since 1993, OPGA's original mission has been to help members receive manufacturer discounts similar to those received by multi-national companies. Such discounts provide you the opportunity to remain independent. However as the needs of the independent changed, OPGA has more recently evolved into a member service organization offering numerous other benefits including Buying group discounts from 40 manufacturers and access to HOMELINK - our managed care contract division. OPGA is owned by VGM, which also purchased the provider-owned POINT Health Centers of America network in 2004.

The POINT network was founded by a proactive group of independent facilities in 1996 who recognized the economic pressures of the healthcare industry would force consolidation and reimbursement reductions, requiring independents to lower their costs through economies of scale and through technology. More efficiency was absolutely required due to the ever-increasing administrative burden of operating an independent practice. Paramount in accomplishing these objectives is the need for
"state-of-the-art" information technology and information management systems. Because these skill sets and programs already existed "in-house" within the VGM group of companies, POINT owners determined they would be better positioned by seeking an affiliation with VGM. HOMELINK is the Managed Care Contracting and Billing Administration division for the VGM network. HOMELINK also administers billing for O&P managed care contracts accessed by both the OPGA and the POINT divisions. POINT's mission statement has remained the same, post integration into OPGA.

"To provide select, ABC-accredited, independently owned orthotic and prosthetic facilities a vehicle to compete and prosper in today's rapidly changing healthcare environment thru participation in a national network of facilities which purpose is to obtain and retain capability to provide top quality orthotic and prosthetic services to patients in need while continually improving operational efficiency and cost effectiveness."

The OPGA/POINT objectives are exactly what Eric suggests in his post and are
the expressed mission.

The tireless efforts of the OPGA/POINT network founders to build and maintain a network of independents created a vehicle that is now poised to benefit many of their colleagues who did not foresee or accurately predict the changes in the O&P industry. Linkia's recent success in extracting important market share from independents and the upcoming plans for competitive bidding on the Medicare front, indicate the time for independents to network in order to better compete has arrived.

The work is begun, but not completed. POINT currently has 235 ABC-accredited locations. Combining OPGA and POINT now accounts for more than 1,300 independent orthotic and prosthetic locations compared to Hanger's 600+.

Independents have wanted the network to get the contracts BEFORE they join, again wanting someone else to lead the effort then participate AFTER benefits are received. Although they would independently be unable to get a managed care contract directly from a payer prior to actually having a service facility location, they somehow believe the network should be able to do it. You don't get a free ride. You should not expect to just pay some Member dues and automatically reap the benefits. We are a young organization and the Members have to participate, communicate, cooperate and give meaningful feedback on the organization's performance for continuous improvement. We need to capitalize on the data and information systems
expertise we have available to succeed. Clinician input will be essential in developing the correct outcome measures and data to assemble. Likewise, once deciding to participate, Members need to resist offers to break rank with the Network strategies on contracting and purchasing in order to gain short-run more favorable terms. These "network-busting" measures are a tactic to prevent the Network from achieving the goals you want it to accomplish. To succeed, the Network needs symbiosis with the Independent Facilities. I don't believe this can be achieved by cooperating with an entity that competes with you.

Active participation by a handful of independents is the reason this network is here for you today. Our industry is plagued by participants who fail to fully educate themselves on all the critical aspects of their field yet are still willing to complain when they don't like the outcome for their business. Independents (who by the way still dominate the industry in numbers) have allowed Hanger to fund all the legislative efforts, dominate the donations to the patient organizations, trade organization, credentialing organization, etc; Independents will purchase supplies from Hanger/SPS, service contracts through OPNET or Linkia; and then cry "unfair" when they lose industry control and market share to companies that are not able to match the high quality of O&P services that Independents are best capable of providing.

The time to be educated and get involved is NOW. You must compete! Independents do need to look carefully at the market conditions of their industry. To unite in a network is one strategy available to include in your business plan. The network will not alleviate your need to continue to be active in "knowing your industry" and making appropriate choices to ensure you don't give your business to a lesser provider by failing to understand the implications of business decisions you make.

CIGNA claims it has undertaken this Linkia contract initiative in response to a need to control its costs. While I disagree with the wisdom of CIGNA's move and its active participation in encouraging Independents to service patients via a competitor that aims to capture market share for itself at the expense of Independents, the choice of "not following the wrong gods home" is up to the Independent provider delivering services to Members.

Independents are free to choose if they will service CIGNA insureds when no alternative service avenue is given, just as independents also make the choice whether they will purchase supplies through SPS, thereby supporting the profitability of an entity bent on taking away their market share. The competitive strategy pursued by each Independent practice is a choice. I hope all Independents will see the whole picture, check out the OPGA/POINT networks and become actively participating Members.

WE HAVE AN OPPORTUNITY TO MAKE A CHANGE NOW, but we must all band together to make it happen.

Jim Andreassen
President, OPGA/POINT

posted by Daniel Gottry at 11:49 AM