If you can’t beat them and you can’t join them, what do you do? That’s the dilemma facing physician-executives as they struggle to find ways to work with managed-care plans that don’t hurt them economically or their patients medically. The two marquee stories in this issue of Modern Physician highlight that dilemma.In our Top Story, by frequent contributor Jay Greene, Miami physician business executive Julio Pita Jr., M.D., laments on the demise of his HMO, Doctor Care, late last year. Pita and about 200 physicians launched Doctor Care, a Medicare HMO, a little over two years ago in the hopes of gaining more economic control over their Medicare patient base. But factors such as inadequate capitalization, little underwriting experience and sicker-than-expected patients combined to tank the venture. In our Feature story, reporter Mark Taylor reports on efforts by physician business executives to breathe life back into a managed-care negotiating strategy that was considered all but dead just a few years ago. Doctors again are considering the creation of physician-hospital organizations, or PHOs, to gain market clout against health insurers. As Taylor reports, their efforts were bolstered by a recent antitrust settlement with a group of nearly 3,000 physicians practicing in and around Chicago. Although the FTC dinged the doctors for refusing to deal with insurers and other problems, the agency gave the physicians’ PHO, known as Advocate Health Partners, the green light to pursue a clinical integration program. In other words, if the participating physicians sufficiently integrated their practices clinically, they could be considered a single economic unit incapable of engaging in price-fixing conspiracies as competitors. That would insulate them from antitrust allegations if they play contracting hardball with payers in the future. Each case offers important business lessons for physicians who want to take on managed-care plans and win. You can start your own plan, but you better have a solid business strategy and experienced management if you want to avoid the same fate as Doctor Care. Or, you can take plans on through tough contract negotiations if you structure your PHO the right way. Both are rough roads, but our Top Story and Feature offer physician business executives two road maps to make the ride a little smoother.
We’ll manage, you’ll care
To navigate winding roads of managed care, we offer you some road maps
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