Louisville, Ky.-based Humana has unveiled plans to market its physician clinics to rival payers as part of a plan to make the clinics "stand on their own two feet."
The managed-care company intends to create a physician practice management division to run its 100 clinics, which have about 500 physicians and operate in five markets: Chicago, Florida, Kansas City, Louisville and Texas.
The action could be viewed as a step toward eventually selling the clinics or spinning them off into a separate company. Over the past few years, several HMOs have ditched their physician operations, citing underutilization and red ink.
But casting off the clinics "is not our plan now," Humana spokesman Jon Drayna said. "I think our intention is that this is going to be a successful business unit."
He said the purpose of the new unit is not to acquire physician practices, although doctors could be added in some markets.
Currently, the clinics operate under Humana plans in each market, Drayna said. They serve 410,000, or 9%, of Humana's 4.8 million enrollees.
By unifying operations in a distinct business unit, the clinics would submit their own balance sheets and follow their own business plans, Drayna said. The new unit is expected to be operational by January.
Humana declined to disclose the financial status of the clinics, and Drayna said he didn't know whether it was tracked.
Marketing Humana's clinics to other payers could prove difficult, if the experience of FHP International, a Fountain Valley, Calif.-based HMO, is any indication.
In January 1996, FHP created Talbert Medical Management, a wholly owned subsidiary for its unprofitable staff-model operations. Talbert had little success in marketing itself to rival plans. An FHP spokeswoman said plans were reluctant to contract with Talbert doctors because of FHP's ownership (July 22, 1996, p. 8).
Talbert, like several other former HMO staff-model operations, was purchased by a PPM. Birmingham, Ala.-based MedPartners announced plans last month to buy Talbert. Last week, the Federal Trade Commission cleared the deal, and it's expected to close by the end of the month.