Doctors organize for managed care

HEALTH CARE INDUSTRIES

June 28, 1994|By Patricia Meisol | Patricia Meisol,Sun Staff Writer

Doctors are beginning to organize their own independent groups to bargain with managed care companies in Maryland, in the belief that physicians themselves are the ones who know best how to give and direct others to give top-quality care at the lowest price.

Alliances of doctors seem to come in two general forms: specialists who band together and offer a single price to insurance companies in exchange for exclusive rights to their patients, or primary care doctors who come together with the eventual goal of directing all patient care, including specialist referrals and hospitalization.

"Our belief is that a primary care model is going to be the most successful over the future. That is not to say we don't want to work with everybody -- hospitals, specialists, etc.," said Scott Rifkin, an internist who is organizing what appears to be the largest group of primary care doctors in Baltimore, with 20 doctors signed up to date. His group has a shared bank account and single billing system, and is signing up new primary care doctors weekly.

Doctors also have the choice of joining a physician-hospital organization, which is usually linked to one hospital. PHOs are the vehicle being used -- and are often set up -- by many Maryland hospitals as a way to win contracts from insurance companies to provide care to large groups.

The disadvantage of such groups is that hospitals, at least initially, can't be selective about the doctors they allow into the network. (They are working on it, though. For instance, part of the pioneering network set up by North Arundel Hospital includes a way to rank doctors, introduce them to new health care practices and, if they don't get it, to let them out of the network.)

The doctors in the Rifkin group -- family practitioners, internists and obstetricians -- are now selecting hospitals and specialists with whom they want to work most of the time. The practice is modeled on doctor companies in Southern California.

"The secret is creating alliances with hospitals and specialists in the ratios that make it all work," Dr. Rifkin said. "You are going to work with a limited number of hospitals and specialists, but what ends up happening is that, because you are using a select number of other providers, you make them more efficient. You direct case management to them, you keep their specialists in business, all of which lowers the cost per procedure."

Eventually, groups like his want to work with one insurance company and a few hospitals. They would collect the entire estimated cost of care for each person and manage the dollars. This is the same arrangement undertaken by hospitals or chains of hospitals -- Columbia/HCA Healthcare Corp. is an example that has broadened to include its own doctors, nursing homes and outpatient centers.

Which of these models is best? That's the question investors are asking as they consider opportunities and watch hospitals, doctors and insurance companies battle for control of health care delivery systems.

Around the country, doctor groups are fewer in number than hospital alliances, and publicly traded groups are rare. But they are growing. The market leader is PhyCor Inc., a band of 974 doctors and 21 clinics in 13 states. It recently announced an agreement with Metropolitan Life Insurance Co. to provide physician networks for Metlife, its managed care arm.

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