How IPAs are changing

With the decline of capitation, IPAs are seeking new roles in order to remain relevant. What will their choices mean for you?

By Ken Terry
Senior Editor

As capitation has declined across the country, IPAs have fallen on hard times. The number of these organizations—many of which were formed to negotiate and manage risk contracts for physicians—has dropped from about 3,000 in the late '90s to 2,200 today. Yet nearly half of all US physicians still belong to them, says Albert Holloway, president of the IPA Association of America.

Will that percentage hold up? In California, where most IPAs are still taking financial risk, they contribute a major portion of physician revenues. Elsewhere, says Holloway, many IPAs are "downgrading their contracting and putting more effort into member services." Among these are group purchasing of supplies, malpractice insurance, and health insurance; facilitating online connectivity with payers for eligibility, claims status, and the like; credentialing; billing; and providing help in complying with government regulations, including HIPAA and OSHA.

But are these services valuable enough to justify IPAs' continued existence? For many physicians, the answer is No. "If an IPA can't bargain for better terms, physicians say, 'Why pay the membership fee?' They feel in most cases, they can get the same contracts on their own," says Gary Matthews, an Atlanta consultant.