In the late 1970s, Dr. Robert Margolis was part of small group of doctors working out of the basement of California Hospital Medical Center. His medical group, California Primary Physicians, cared for mostly elderly patients in underserved downtown Los Angeles, but in the ensuing years it rode the growth of Medicare and the managed health movement to evolve into HealthCare Partners Medical Group, the state's largest private physician group. Margolis is co-founder and chief executive of the group, which has become known for its expanded use of computer systems that track patient records as a means of improving care. Margolis is also a big supporter of pay-for-performance, which provides doctors bonuses for following certain protocols of care. In January, he will become chairman of the National Committee for Quality Assurance, an accreditation group that's developing pay-for-performance measurements for doctors, hospitals and other health-care providers.


Question: How would you rate doctors' care these days?
Answer:
Doctors, with very few exceptions, are hardworking professionals trying to do the right thing. A lot of the problems that get the most attention are not within the doctor's direct control.


Q: Such as what?
A:
A patient has health problems over time, and it takes good information systems, reminder systems, outreach systems and other things to manage that. But in a traditional system, a doctor sees a patient for 15 minutes once every three months, or six months or a year and doesn't have the opportunity to intervene in their lifestyle, their nutrition, their education about health care, any time in between. So it's not that the doctors aren't trying hard.


Q: What about hospitals?
A:
There's been a spotlight on errors that has made people nervous and cautious, but hospitals aren't any less safe than they ever were. But a hospital has the same challenge as the doctor. Even if a hospital does the best it can, it can still discharge a patient into an uncoordinated system for follow-up care.


Q: So what can a doctor or hospital do about this?
A:
I think coordinated physician groups and hospital networks with electronic records systems are much better positioned to create transparency of information and be accessible to patients and consumers to help them make choices. Right now, we're not patient-centric as an industry. We're location-centric.


Q: Is this changing?
A:
Where we're headed is toward a coordinated patient-centric approach. It's where a patient's records are available to a health care professional or a hospital anywhere they are.


Q: Is this what you are doing with HealthCare Partners?
A:
We have some 60,000 seniors in Medicare HMOs. Because Medicare patients tend to be sicker and have more chronic conditions and require a lot more coordination of care, that's been the basis of all our care coordination programs. Our information-tracking systems all came out of our need to manage closely the complicated sick patients that we were taking care of.


Q: So how has HealthCare partners managed to do this when scores of physician groups haven't survived?
A:
You'd like to say there was a big master plan, but it really just evolved. In 1979, California Primary Physicians got out of the hospital basement and into a small building at Olympic Boulevard and Georgia Street. In 1983, we expanded into a 100,000-square-foot building next door. We certainly didn't have the patient population to support that; Los Angeles was really a pretty barren zone in the '70s, not a lot going on downtown. So it was a massively underserved, with a lot of elderly residents who didn't have primary care physicians. That is the void we were able to fill.


Q: A lot of medical groups got killed by the advent of managed care in the 1980s. How come you didn't?
A:
We were one of the first groups in the state to offer our services to managed care plans like HealthNet and Blue Cross and PacifiCare. What we learned in managing Medicare risk patients helped us with managed care.


Q: How did you expand your reach beyond L.A.'s urban core?
A:
HealthCare Partners is really the history of four major groups with a history of success in managed care. What we were able to do in the early 1990s, as we all grew into adjacent geographic areas, was to come together rather than compete.


Q: What have all the groups that have failed done wrong?
A:
Staying private was crucial to our survival. Hospital systems were going public; all the health plans except for Kaiser were public. Some of the physician groups tried that and it did not work. And we were the beneficiaries of the collapse of that, both in our physician networks and our patient population. As groups began failing, individual doctors would consider joining us and their patients came with them.


Q: How did you get into administration?
A:
It's been mostly on the job, like most other doctors. It's certainly hard to be a full-time physician, serving patients and running a business, which is one of the reasons physicians and physician groups choose to join a group.


Q: What about becoming chairman of the National Committee for Quality Assurance?
A:
As the anti-HMO movement developed in the 1990s, NCQA set itself up as a neutral arbiter of quality measurement. For (HealthCare Partners) it will fit right into our skill house, because that's what we do. We were involved in developing California's pay-for-performance program through the Integrated Healthcare Association, so we're very versed in how to work in a pay-for-performance environment.


Q: Why are you such a big believer in pay-for-performance?
A:
Some of us believe that's the golden thread that will finally allow us to understand practice patterns and to be more transparent to our customers and to be an accountable health care system, which I think the country needs desperately.


Q: But many doctors are suspicious of these efforts.
A:
Organized medicine traditionally resists change. It's breaking down very slowly. I'm not a big fan of government regulation, but I can say that there are just some things that are the right thing to do. I think understanding practice patterns, reporting on results is the right thing to do.


Q: And if they don't go along?
A:
The opportunity here is for physicians to take the lead in developing the measures and developing the reporting, as opposed to having the government and others impose it.


Q: Imagine the future of health care.
A:
I think there will be patient smart cards (containing a patient's entire medical history), but we're not anywhere near that yet. There are electronic personal health records systems that are moving in the right direction, like Kaiser or a physician group like ours. But that has some weaknesses because if a patient goes out of the network those records can't be accessed. So no system is perfect yet. But those are the ways we need to move toward.


Q: How long before this is a reality?
A:
It's getting there. There are a number of boards in hot pursuit of standardization and they're all competing with each other for whose standards are going to apply. So just like all the other industries like VHS tapes vs. Beta there is a lot of debate going on. How long it's going to take depends on your end game. Agreeing on the standards relative to information sharing? Maybe a year or two. Before every patient has a smart card? Many years.


Q: Sounds like the Marcus Welby days of practice are over.
A:
We all want to be Marcus Welby, the doc who is there to supply everything, but it's just very hard in this industrialized world. Medicine used to be a cottage industry and there was no measuring, no oversight. It was a wonderful way to practice, and I did it for many years, but it's a bygone era.


Q: Do you still see patients?
A:
No, I stopped seven years ago. I missed it a lot in the early stage, but there were the demands of a large and growing group that was clearly in need of full-time attention. Someone had to do it and I had the interest.

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