Georgia Radiology Network starts fast by inking early PPO contracts

August 30, 1995

Executives build relations with managed-care payorsIt's never too early for radiology networks to begin forging relationshipswith prospective payors. The Georgia Radiology Network was inits formative stages in June 1994 when network

Executives build relations with managed-care payors

It's never too early for radiology networks to begin forging relationshipswith prospective payors. The Georgia Radiology Network was inits formative stages in June 1994 when network representativesfirst made contact with local managed-care organizations. Thepayoff came this spring when the Atlanta-based network, afteronly four months of active negotiation, turned two of those contactsinto contracts.

HealthStar Managed Care and CorVel Corp., both preferred-providerorganizations, first heard about GRN while network organizerswere doing early market analysis -- even before prospective physicianmembers had voted to go forward with network development. GRNrepresentatives surveyed as many managed-care companies as theycould find in Georgia to determine the payors' interest in a horizontalradiology carve-out.

In January 1995, armed with 15 member practices and 114 physicians,network officials revisited those managed-care companies thathad responded positively to the idea of a radiology network. Fourmonths later, the first two contracts were signed.

"What we essentially did is transform those early marketassessment relationships into a series of contract negotiationsand discussions," said Ernest Berger, executive directorof GRN and chairman of its marketing committee. "We builta relationship with those payors last summer. We then went backto them and said, `This is the value we're going to bring to youin our current configuration. Let's sit down and talk. And withoutexception, the payors have expressed uniform interest in doingthat."

HealthStar Managed Care, headquartered in Lincolnwood, IL,operates one of Georgia's largest PPOs, with 500,000 group healthand workers' compensation lives covered. CorVel, a national workers'compensation managed-care company, provides PPO networks and othermanagement services to third-party administrators, self-insuredemployers and insurance companies.

An advantage to thorough market analysis prior to network formationis that the network is better able to gauge the needs of the market,giving payors what they want without wasting effort in providingservices that payors aren't ready for.

GRN has a stated commitment to forming long-term relationshipswith managed-care organizations, a view that sets it apart frommuch of the radiology establishment.

"We do not view managed care as the enemy," Bergersaid. "We view managed care as a reality in the health-caremarketplace and so we work very hard to understand the needs ofthose organizations and to try to meet those needs."

The managed-care market is not as mature in Georgia as it isin other areas where networks have developed, and consequently,the expectations of a radiology network are different. For manymanaged-care organizations in Georgia, the geographic coveragethat GRN provides is value enough.

The network's physician members are developing credentialingcriteria, and network executives are looking at options for informationsystems and utilization management, but they see no need to rush.

"This is becoming a world of finesse, and we want to implementwith the right timing, not too early and obviously not too late,"Berger said. "I would think we will be well down the roadtoward implementing our value-added programs in a variety of areasby the end of this year."