William T. Ross, Executive Director, South Bay Independent Physicians (SBIP) Medical Group Inc.

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About South Bay Independent Physicians Medical Group, Inc. South Bay Independent Physicians Medical Group, Inc. (SBIP) is a provider-owned and operated professional medical corporation with a primary mission of offering its members advocacy and access to preferred provider (PPO), exclusive provider (EPO) and point of service (POS) contracts. Founded in 1983, SBIP has grown to a membership in excess of 500 providers encompassing the South Bay and Marina Del Rey communities. In addition, under a wholly owned subsidiary – First Choice Administrators (FCA) and through separate management and consulting agreements, FCA provides contracting services to physicians located throughout the Los Angeles basin, San Fernando Valley, Long Beach, Orange and Riverside Counties and the San Francisco Bay Area. Through these agreements FCA represents over 1,000 additional physicians statewide. FCA also performs credentialing and re-credentialing functions for a Southern California County Medical Society Foundation PPO. The providers of SBIP represent all medical and surgical specialties. Most are affiliated with either the two major hospitals in the South Bay (Providence Little Company of Mary Hospital, Torrance Memorial Medical Center) or the major facilities in the Marina del Rey and Santa Monica areas. SBIP providers are dedicated to rendering excellent healthcare within a system that incorporates both strong utilization and cost-containment measures and quality assurance programs. The administrative staff of SBIP currently manages over 70 healthcare agreements representing in excess of 2,000 payer groups (insurance carriers, multiple-employer union trusts, third party administrators, etc.). Administratively SBIP reviews all agreements for its members and evaluates/critiques the various terms and conditions found in those agreements. SBIP also negotiates the non-fee aspects of those agreements. The majority of the non-HMO patient visits to SBIP members result from the operation of these agreements. Recently, SBIP began offering consultative services for members wishing to convert their practices to the Concierge model. This is being done through a cooperative venture with SpecialDocs, one of the leading national concierge consulting companies. The members of SBIP are dedicated and will continue to develop new and creative products that are designed to offer the best in quality, cost-effective healthcare delivered through the private practice setting. Medical Travel Today (MTT): Is your medical group active in the HMO market? William T. Ross (WR): We are active in the physician fee-for-service market, whether it’s medical or workers’ compensation PPO. We tend not to work in the HMO market unless it is a fee-for-service model. I personally manage three multi-specialty medical groups – one located in the south bay of Los Angeles, another in Long Beach/Riverside, and the last one in the San Francisco Bay Area. This encompasses a little over 1,000 physicians, both in private practice and some hospital based. MTT: How long have you served on the board of the AAPPO? WR: I first got involved with the organization in mid to late 1995 when they were looking to turn around a downward trend in revenue. We have undergone a number of transitions since that time, and have weathered a few challenges. MTT: What is your involvement in the medical travel industry? Share some of your perspectives on the domestic and international medical travel market — incoming and outgoing. WR: A number of our physicians are involved directly and take care of patients from other countries, whether it’s Europe, Middle East, Asia or Canada. We also have some South Americans that come to California for care. In some cases, we help them with their travel arrangements and coordinate care with the insurance companies that are bringing them to the U.S. As a rule, I’m not aware that any of our physicians are involved in recommending that their patients travel to other countries for medical care. MTT: How do these patients get referred to your physician group? WR: The referrals come through one or more PPOs. There are different PPOs that have relationships with certain medical travel companies, and they make the information available to patients regarding the specialists and care available. They arrange for patients to travel here and see one of the physicians in our group or provide a consultation. Sometimes the doctors are contracted with the various PPOs, but not necessarily contracted for international service. The PPOs are U.S. based, and usually have relationships with companies that have a U.S. division. In other instances, the PPO is an international organization, and arranges care for ex-pats or foreign nationals that are coming here. MTT: What are the challenges when patients arrive here? Are there language barriers or issues with electronic health records? WR: Language is always an issue. There are certainly physicians who are comfortable with this type of service and others who are not. A number of physicians are fluent in some of the Asian languages that are commonly spoken in this area, and they tend to work with the companies who send over the Asian patients. We don’t have as much of a language problem with the people coming from Europe or the Middle East since they often tend to speak English. Otherwise, we use translation services that are usually arranged through the companies or the PPO. The transfer of information via an electronic health record is almost non-existent at this point, especially if the patient is here on a vacation — they don’t usually have anything with them. People return to their homelands for follow up, and we send the information either with the patient, or forward it to the travel company or medical manager. MTT: Do the physicians here confer with the doctors in the patient’s home country? WR: In some cases, yes. It depends upon what happens at the other end, because patients are not always certain about the doctor they will be seeing when they return home. MTT: Can you guesstimate the volume of foreign patients? WR: It’s not a huge volume at this time. I would estimate in any given year we have 50 to 100 patients that fall into this category, either coming in for care or being here on vacation or business. Some of the auto companies have their headquarters in this area, and so we get those business individuals. MTT: What percentage undergoes surgery? WR: There is a percentage that undergoes surgery, particularly Canadians. They come down here because they can’t get what they need up there, at least not in a timely fashion. MTT: Are the doctors in your practices contracted with specific hospitals? WR: We don’t contract with the hospitals. The PPO’s are contracted with the various hospitals. MTT: Are the patients usually cash paying customers? Do they use credit cards? WR: Some of them pay in cash, but we do have a bit of an issue with collections depending upon the company. We have had to terminate relationships with some of the companies because of non-payment. They simply don’t follow through. When that occurs, we give them a chance, and then after that we cancel our relationship with them. MTT: Do you process all of the claims that come through for these patients? WR: We don’t process the claims for that type of service. The physicians bill the patients directly or if there is an insurance carrier behind them, they will bill the insurance carrier. Where we do get involved is when the insurance carrier doesn’t pay — to make sure that the payment is paid — or that the insurance carrier loses its contract with us. MTT: We have heard that there is an influx of pregnant women coming to California from Asia to have their babies in the U.S. Do you have any experience with these types of patients? WR: That’s not something I would expect our physicians to publicize. They obviously want to help their patients and they respect patient confidentiality. I’m going to talk to the OBGYN community in general terms and see if there have been inquiries. I haven’t heard anything, but that doesn’t mean it’s not happening. MTT: If patients undergo surgery, is it something routine, an esthetic procedure, or a cataract? WR: I wouldn’t characterize the surgery as routine. Generally, patients can get routine surgery where they live. Although we’ve had Canadian patients come down for routine procedures because they couldn’t access care in a timely fashion. Some of the surgery is more specialized, particularly for those patients who are coming from the Middle East, Europe or South America. I can’t say that it falls into one particular specialty, and there is little to no plastic surgery. MTT: Would you be willing to give us the names of the PPO’s that you deal with? WR: We deal with almost everybody: Multiplan and a plethora of their contracted PPOs and First Health. These large players are buying up everything that’s out there. Second tier companies like Health Smart also attract this type of business. MTT: So all referrals come from the PPOs – you don’t market internationally? WR: We don’t have any organized marketing program where we go out and seek these patients; we’ve got enough to do without them. Obviously, we take them when they come in and we help them as much as we can. MTT: Do you foresee this market growing? WR: That’s a good question. The market is in such an uproar right now because of what’s coming down the pipe that there may be numerous physicians who would like to increase this type of business, particularly the surgeries. I suspect that for us, personally, we will not see much of this in the future — only because the physicians that have tended to do this are either already retired or are looking at retiring within the next three to five years and just getting out from under. MTT: What about wealthy individuals in emerging nations that don’t have any access to healthcare but can afford to travel here? WR: If we really wanted to spend the money and organize ourselves into a marketing program to go after these patients, we could. But at this point, it’s not really a priority. There are so many other things we are doing, particularly just trying to work with our current physician base and helping them maintain their practices amid everything that’s going on at the government and payer levels trying to force physicians out of private practice. MTT: Do you have any perspectives on the intra-state U.S. medical travel market? Do you find people coming to your doctors from other states? WR: We do. Usually these folks are either on vacation or on business travel. Sometimes it’s a referral from friends or family. It’s not really something we have sought out, so it’s more private referral or just serendipity. MTT: Do you have any other thoughts on this medical travel industry that you would like to share with us? WR: I guess right now the thing I’m seeing from the physician community is incredible discouragement. Private practice physicians – who tend to be middle aged or older – see their whole way of life changing. They are extraordinarily concerned about where quality care is going because we have not seen evidence of quality improvement. It’s as if the Canadian patients are purposefully coming down to California for care. We are also getting patients from a variety of HMOs who are leaving their local plans to get the care that they need from our practice. These are simply anecdotal and subjective observations, but it’s something we are seeing and it is increasing. And, it’s scary. The doctors are worried for their own practices and where the care is going for patients in the long run, even after the doctor decides to retire. We’re seeing more concierge physician practices – physicians are escaping the wrath of regulation and hassles — and things get worse every year. MTT: That’s why we are seeing a lot of people leaving the country to access care overseas. WR: I can understand that. There a lot of good organizations and physicians overseas that are very well trained that can do these types of surgeries for a lot less money. There are other good healthcare systems around the world that work out quite well. I still think we have a wonderful healthcare system, with the exception that the larger that we get on the group side, things are going to get worse and worse.

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