Kaiser Permanente's 15,000 doctors want to sell their knowledge to help other providers form a Medicare provider-sponsored organization and have contacted at least one medical group about the venture, MODERN HEALTHCARE has learned.
The move by one of the nation's largest physician groups shows just how interested providers and managed-care companies are in getting into the business of PSOs any way they can.
PSOs are networks of hospitals and physicians that for the first time can contract directly with Medicare to provide care to beneficiaries. HCFA is drawing up final financial solvency requirements for PSOs, with the first PSOs expected to be licensed in January (See story, p. 2).
The Permanente physicians would get into the PSO consulting business through a for-profit venture called Permanente Co., or PermCo. The doctors formed the unit about a year ago to develop new business ventures for the Permanente Federation, the organization that ties together all 13 Permanente medical groups across the country. The federation is the physician arm of Kaiser Permanente.
PermCo has submitted a PSO business proposal to Advocate Medical Group in Oak Brook, Ill., confirmed Cal James, president and chief executive officer of PermCo.
Advocate Medical Group is the physician branch of Advocate Health Care, which operates eight hospitals in the Chicago area. Last week Advocate announced plans to acquire 13 outpatient clinics in the market from Humana (See story, p. 28).
The PermCo proposal to Advocate is under consideration, James said, stressing that PermCo has no other PSO business proposals pending. He called them a "low development priority" for the company and denied that PermCo is working on marketing PSO services nationally.
"We would only do it where there was a clear interest on the part of Kaiser to go into a market area," using a PSO partnership as a vehicle, he said.
No Kaiser physicians would provide care to beneficiaries through a PSO. Services offered would consist solely of consulting on delivery practices, according to Kaiser.
A spokesman for Advocate Medical Group said neither the system nor the medical group is considering contracting directly with Medicare through a PSO.
"Advocate already contracts through Humana and other managed-care providers that offer Medicare-risk products," the spokesman said.
A source at Humana, who requested anonymity, said Humana has also approached Advocate with a PSO proposal, under which Humana's new subsidiary MedStep would help Advocate get into the Medicare direct contracting business (Jan. 19, p. 6).
Meanwhile, in several months PermCo will launch its first business line: a company that will market disease management technologies.
James said the venture will involve a for-profit partner that "brings a technology we don't have" in the area of data management. But he declined to identify PermCo's partner and would not elaborate on the type of technology or how it would be marketed to protect the partner's identity.
Permanente medical groups, as well as the partner, will own shares in the new disease management company.
The venture will increase the use of disease management information technologies throughout Kaiser Permanente by a means not described. It also will sell the technologies on the open market, James said.
PermCo also is considering getting into the business of physician practice management, James said.