In an effort to keep medical decisions in the hands of physicians, single and multispecialty groups in New Jersey and Pennsylvania are forming their own contracting organizations.
"Doctors are reacting in spite of the fact that they don't know what's going to happen in Washington," said Fred Palace, M.D., president of the Medical Society of New Jersey, which represents 95,000 physicians. "Our position is that doctors and patients have to get together and control the delivery of medical care," he said.
Dr. Palace cited several new examples of physician networking activities throughout the state. For example, Physician Healthcare Plan of New Jersey has raised a total of $17.5 million in a stock sale to physician investors. The Trenton, N.J.-based group is seeking regulatory approvals that would allow it to become the state's first HMO owned and operated by physicians (July 18, p. 25).
Separately, a group of New Jersey radiologists is attempting to form its own contracting network. Because the group is still being formed, an attorney for the radiologists declined to provide more details, including the number of participants.
Such new physician-controlled organizations are forming in response to worries that insurance entities rather than medical professionals are controlling medical-care decisions.
"Our serious concern is that larger and larger insurance conglomerates are gobbling various pieces of the delivery system," said Roger Mecum, executive vice president of the 20,000-member Pennsylvania Medical Society. To what extent physicians will maintain autonomy in these types of organizations is a serious concern, he said.
The newly formed Pennsylvania Physician Healthcare Plan, based in Wyndmoor, is seeking to establish a statewide physician-owned IPA-model HMO. A recent letter to physicians across the state seeks $500 contributions toward the cost of conducting a feasibility study. It needs to raise $300,000 to $400,000.
The plan has retained the Garvey Group, a Merrick, N.Y.-based consulting firm, the same firm used by M.D. Health Plan, a North Haven, Conn.-based physician-controlled HMO established in 1987, and Physician Healthcare Plan of New Jersey.
John J. Nevulis, M.D., vice president of Pennsylvania Physician Healthcare Plan and an orthopedic surgeon in a Norristown, Pa.-based group practice, said the goal is to create "a more effective healthcare plan" that will allow physicians to control healthcare delivery.
Similarly, a group of physicians in southeastern Pennsylvania will be surveying their colleagues in the eight-county region to determine interest in forming their own managed-care plan.
Thomas Gabuzda, M.D., president of the 3,900-member Philadelphia County Medical Society and chief of hematology at Lankenau Hospital in Wynnewood, Pa., said such an entity would give physicians control of utilization review, quality assurance and appeals processes while offering patients another health plan choice.
In the current managed-care environment, in which physicians are subject to "second judgments" of their medical decisions and other "inconveniences" that result in lost time, "everybody feels nickled-and-dimed to death," he said. The proposed physician-owned HMO would operate on a not-for-profit basis, he said.
Medical societies themselves are shying away from organizing activities because of the Federal Trade Commission's recent opinion regarding a proposed statewide physicians' PPO in Montana (July 11, p. 14).
The FTC said the PPO's potential to control a large group of physicians could lead to anticompetitive actions against payers and consumers. In addition, the FTC said physicians in the PPO didn't control enough financial risk to make them legitimate business partners rather than competitors fixing prices through a third party.
"Our general advice to physicians is to try to get a little bigger," Mr. Mecum said.