Some of Montana's largest hospitals and physician groups have banded together to launch a new HMO serving the state's three largest cities: Billings, Helena and Missoula.
The provider-owned plan's formation comes at a time when hospitals across the country are losing millions of dollars in the commercial insurance business.
But the Montana providers say operating their own managed-care plan is the only way to control their own fate in a state historically resistant to HMO expansion.
"Rather than being just a vendor or subject to another HMO, we wanted to be the masters of our own destiny," said Grant Winn, president of 115-bed Community Medical Center in Missoula, one of the new HMO's owners.
The other provider owners of the Helena-based HMO, called New West Health Plan, are Community Medical's 130-physician physician-hospital organization; 80-bed St. Peter's Community Hospital in Helena and its 82-physician PHO; and 232-bed Deaconess/Billings (Mont.) Clinic and its 140-physician PHO.
Officials would not disclose the not-for-profit HMO's startup costs.
New West began enrollment in March and has about 3,000 enrollees, mostly in the Billings area, said Russ Hill, its president and chief executive officer.
Hill, former executive director of Prudential HealthCare's operations in El Paso, Texas, projected enrollment will reach 38,000 within five years, which would make it the state's largest HMO.
Helena-based Blue Cross and Blue Shield of Montana is the state's largest insurer, with about 25,000 enrollees in two managed-care products separate from their fee-for-service plans.
Hill said New West has no immediate plans to launch a Medicare provider-sponsored organization.
The northern Rocky Mountain states are a tough market for managed care because of their geographic isolation. Many residents perceive HMOs as invasive representatives of big business, which makes it difficult for HMOs to capture enough enrollment for financial viability (July 14, 1997, p. 46).
However, cost concerns are slowly eroding resistance. With Montana's median household income more than 20% below the national average, both employees and employers are looking for less expensive alternatives to indemnity coverage, Hill said.
"This is a doctor-run, doctor-owned HMO, and that will really make it different from other plans," he said, noting that physicians hold nine of the 15 seats on New West's board. The other six seats are split among the provider owners' CEOs and members of the community.