As we talk to potential prospects and customers, we sometimes come across health plans, medical management firms, and TPAs who seek to build and maintain their own panel of physicians to do internal medical peer reviews. Formerly this may have been a good practice for them. But now they need to question whether it’s the best practice. We live in the age of outsourcing. In the past, many health care organizations sought to organize and deploy all of their resources for all aspects of their business under one roof. Today they are more likely to shed non-strategic, non-core parts of their business, outsourcing them to specialty providers. We believe that independent review organizations are best situated to provide medical peer reviews to healthcare organizations.

So if you’re a managed care organization, a TPA or a health plan, why would you consider outsourcing to an IRO? Particularly if you’ve already built a panel of physicians and allied health care professionals to do claims reviews for you?

First, there’s a high cost of building and maintaining a panel of specialists who are all credentialed, licensed, in active practice and board certified. The function of building and maintaining such a panel can be very costly to an organization that doesn’t have enough cases to amortize those expenses over. A managed care organization or health plan is in the business of generating quality outcomes, insuring patients and members and providing them with benefits. Maintaining a large staff of physician specialists isn’t part of their core competency. If you could outsource the same medical decision-making for a fraction of the cost of doing internally why wouldn’t you outsource?

Other elements include the changing standards of care, the new experimental and investigational treatments and how they’re impacting medical decision making. It’s very difficult for a static panel of physician specialists to maintain expertise about the latest levels of quality of care in all areas of medicine. Medicine is accelerating at light speed with lots and lots of changes in the standard of care, medical treatments and the use of technology. An independent review organization is constantly recruiting and credentialing specialists who have cutting edge knowledge, skill and the ability to apply that experience in reviewing cases. An organization that doesn’t conduct a large number of reviews cannot afford the cost of continuously recruiting and credentialing specialists, and therefore it can lag behind in its ability to make effective decisions.

An independent review organization also develops a trusted advisor relationship with the managed care organization (MCO), the health plan or the TPA. Over time, the client to garners allows many side benefits from this relationship–in addition to access to an expert panel, getting free advice on what to do in particular patient situations and getting advanced statistical analysis / reporting from the IRO related to determinations, patient outcomes by population and other tracking systems. As the IRO develops client relationships, it can provide lots of consultation on other issues, such as how to improve plan language in order to make the decision-making process easier, and other similar favors that help clients improve their business. For this reason, many MCOs, medical management firms, health plans and TPAs turn to independent review organizations even though they’ve already have their own specialty panels. The cost of maintaining internal peer review panels versus outsourcing medical peer review to an IRO is just too high.