Managed care will make headlines again in 1996 as companies continue to consolidate for market clout while laboring to digest acquisitions.
Meanwhile, the unraveling of the merger between WellPoint Health Networks and Health Systems International may give pause to other managed-care companies eager to join forces. It's obviously not as easy as it seems to team up and conquer the world.
But when you've seen one merger-or attempted merger-you haven't seen them all. There are lessons to be learned in comparing how managed-care organizations come together.
For example, the merger of United HealthCare Corp. and MetraHealth Cos. last summer seems to be proceeding smoothly. As United chips away at the job of moving MetraHealth's huge indemnity membership into managed care, it's moving steadily to form new alliances.
United is even planning to partner with a traditional foe of HMOs, a state medical association, to form a jointly owned statewide managed-care company in Virginia.
Meanwhile, HMOs have to keep their eye on upstart provider-sponsored networks that will compete with them for members. The action on this front will be heaviest in regions with strong physician groups. In California, physician and hospital associations are working together to draft state legislation that would allow PSNs to take on global risk.
That would mean capitated providers could contract directly with government and private payers and share responsibility for a group's total care. The California Association of HMOs is expected to fight this proposal tooth and nail. Watch for similar turf battles over PSNs in other states.
That may mean the news coverage of investor-owned HMOs will get even nastier than it's already been. Why, the public will want to know, would for-profit managed-care organizations want to stop doctors and hospitals from offering their own insurance products? Isn't this proof the for-profit HMOs want the whole pie?
The newly merged Group Health Association of America/American Managed Care and Review Association likely will help members deal with the increasingly hostile environment.
On another front, Los Angeles County will be struggling with its own managed-care crisis. To receive a promised $364 million federal bailout, the county must transform its system to outpatient-focused care and privatize clinics. The effort is supposed to be a model for the nation.