BOSTON-Six months after entering the Boston-area market, an organization composed entirely of primary-care physicians has inked its first contract.
Primary Care, a limited-liability corporation, agreed to accept a flat percentage of premiums and share financial risk as part of a deal with the Medicare HMO offered by Tufts Health Plan, said Guy Spinelli, M.D., spokesman for the Norwell, Mass.-based physician organization.
The Medicare HMO-called Secure Horizons, Tufts Health Plan for Seniors-is the largest such plan in the state with about 43,000 enrollees. Primary Care has 150 physicians based in the city of Boston and 60 communities in the southwest suburbs and along the state's South Shore.
Tufts has developed a primary-care network within that area but hasn't been able to gain a foothold in certain pockets that Primary Care has covered, a Tufts spokeswoman said.
Spinelli said the clinical case-management approach at Secure Horizons was a good fit with the physician organization, which is subdivided into about a dozen teams of doctors that meet weekly to discuss cases.
Tufts case managers will work with the group's physicians, and the HMO will keep 20% of the monthly premium. Primary Care will receive 80% of the premium and use it to manage the primary, inpatient and tertiary care of Secure Horizons enrollees, Spinelli said.
The corporation will take 2% to 3% of the premiums and invest the money in information systems and other networkwide investments, he said.
Four community hospitals in the area have agreed to a risk-sharing arrangement with Primary Care to meet care responsibilities in the contract. They are Faulkner Hospital in Boston, Quincy (Mass.) Hospital, Milton (Mass.) Hospital and Jordan Hospital in Plymouth. Two other hospitals are in negotiations, Spinelli said.
About 20% of the physicians in Primary Care already are in the Secure Horizons network, bringing an estimated 3,000 patients into the new contract. The physician organization forecasts serving an enrollment of 3,800 to 4,000 by the end of the first year and 6,000 within two years.
With federal Medicare payments averaging $440 a month in the Boston area, Primary Care's 80% share of the expected initial patient base could exceed $1 million a month in revenues.
Demands for start-up capital emerged as an issue a year ago for physician groups interested in organizing for a slice of the managed-care market (May 20, p. 49), but Primary Care has gotten this far on two rounds of per-physician contributions-one for $500 each and another for $1,000 per doctor-for a total of $225,000.