An unlikely combination of expertise from the American Medical Association and money from a for-profit subsidiary of a not-for-profit hospital system is helping 2,200 physicians in southeast Michigan form a new health plan.
The plan will be the first doctor-dominated plan to be created under the AMA's Physician Capital Source program. The program, started last year, helps doctors develop business plans and finance their own health plans.
Michigan Provider Network's deep pocket is CareAmerica Health Plans, an HMO based in Woodland Hills, Calif. It's a for-profit subsidiary of UniHealth, a not-for-profit system of seven hospitals. CareAmerica has 250,000 covered lives in Southern California and annual revenues of about $500 million.
Gerald Sherman, M.D., an otolaryngologist and president of Michigan Provider Network, said the doctors were looking for a partner that was experienced in managed-care administration, put physicians in charge and was financially strong for the long haul.
"We had the network set up," Sherman said. "We were looking to find a strategic partner that had the infrastructure, technology and business record to be compatible with us."
He said the AMA "introduced us to each other. They analyzed our physician network, told us where our strengths and weaknesses were. And they reviewed our business plan, which was a great help to us."
The AMA's program is working on 40 proposals around the country. Some are for doctor-developed medical devices and information systems, but most are physician-led networks and insurance products.
Sherman expects the capitalization of the Michigan venture to approach $20 million. The network's physicians are putting up some of the funding, but the majority will come from CareAmerica.
CareAmerica will provide information technology, some medical management, claims processing, marketing and corporate infrastructure.
The key point for the Michigan network, though, was that doctors retain control of patient care and quality assurance. Local physicians will take half the seats on the joint venture's board of directors and will have 60% of the seats on the quality management committee, which resolves patient-care questions.
The new plan expects to start enrollment by the end of this year. It will offer an HMO, PPO, point-of-service and workers' compensation plans, and later a Medicare risk HMO.