Doctor-controlled care system hopes to undercut institutions

November 16, 1993|By Patricia Meisol | Patricia Meisol,Staff Writer

An article in yesterday's Business section incorrectly reported the name of a doctor who founded the Maryland MultiSpecialty Medical Group and is trying to create a physician-controlled health care system. He is Dr. Ahsan S. Khan.

* The Sun regrets the error.

A Baltimore doctor has issued a call for colleagues to join a new company that is shaping up to be the area's largest physician-controlled health care system.

Dr. Khan S. Ahsan, an eye, ear and nose specialist with 20 years' experience at Church and St. Agnes hospitals, is betting that in highly regulated Maryland, physician-controlled systems will be cheaper and more efficient than competitors. So far, hospitals and insurance companies have taken the lead in developing health care systems here.

FOR THE RECORD - CORRECTION

Dr. Ahsan hopes the company he has founded -- Maryland MultiSpecialty Medical Group -- will include at least 150 primary care doctors and specialists who will sell their services as well as those of selected hospitals and other medical providers.

And after only three weeks, at least 50 doctors have signed up. At the first meeting, held last month to publicize the concept, more than 150 doctors attended. A second meeting is planned Sunday at his Baltimore office.

Doctor groups are common in many parts of the nation, but not in Maryland.

Here, doctors began talking about organizing after presidential election results made it clear that managed care will be the dominant health care delivery form -- whether or not Maryland continues to control hospital prices. While many doctors talk about the issue, Dr. Ahsan is the first to make a public appeal.

It's difficult to develop managed care in Maryland because regulations bar the most important providers -- hospitals -- from discounting prices.

A few hospitals recently created low-priced health care packages by aligning with doctors and getting the doctors to lower their fees. The largest group, with 225 members, is based at St. Agnes Hospital in Southwest Baltimore. Its doctors use other hospitals, but the group doesn't negotiate to send patients to those hospitals.

But in a physician-controlled system, doctors don't have to discount their fees as much, and they don't feel bound by loyalty to a single hospital.

That's important, because rates vary among Maryland's hospitals. By being selective about where they send patients, the physician-controlled system could deliver health care more cheaply than a hospital-based system, Dr. Ahsan says.

Stephen J. Sfekas, manager of the health care division at the law firm Weinberg and Green, said hospital-based doctor groups under the current regulatory system will be "inherently unstable." Although doctors and hospitals benefit, only doctors take the risk of lowering their fees. Health systems that are not centered on a hospital may be the way to go, he adds, but no one is sure.

The best guide to the health industry's future, he says, is the experience of other industries following deregulation.

"What ended up happening was a blurring of distinctions," he said. And the same is happening in health care, as doctors, hospitals and insurance companies band together in various hybrids.

"Just like the airlines, some of these ideas are terrible and some will work terrifically well," Mr. Sfekas said.

The same could happen in health care, he says. "Old companies will be out, new ones will enter, and the [smaller existing ones] get stronger."

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