Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, November 6, 1994 TAG: 9411070053
SECTION: VIRGINIA PAGE: C1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: TYSONS CORNER LENGTH: Medium
Only a few "nays" sounded Saturday afternoon when a vote was taken on the proposal that doctors link up and package themselves to purchasers of health care. Giving physicians more clout is the impetus behind the effort.
The Western Virginia delegation to the society's annual meeting gave unanimous approval to the network.
The network business plan outlines a two-part venture, which includes a nonprofit organization that will sign up network members and a for-profit company that will negotiate contracts and provide management services to members in a variety of areas from patient billing to staff selection.
The proposal brought passionate debate on both sides Friday, but speakers generally favored its passage.
"This represents our last opportunity to organize and fight," said John W. Hollowell, a retired Portsmouth physician who spent 41 years in practice.
Hollowell noted that some of the managed care companies use "godfather tactics" to get doctors to sign their contracts, but the main beneficiaries of those contracts are the "managed care managers."
There are no statistics that show that managed care plans have controlled overall health care costs, he said.
Those in favor of the network believe it will give doctors a chance to show they can manage health care costs on their own and still give patients unlimited access to quality care.
"There is a lot of fat in health care," Roanoke physician Newell Falkinburg said. He is president of the Roanoke Academy of Medicine, which represents about half of the Roanoke Valley's doctors.
The network is a few years late in coming, but it "puts medicine in the proper prospective," he said. "If corners have to be cut, physicians ought to be cutting them, because they know where the edges are."
Virginia doctors, especially those in less-populated areas, are smarting from their first brushes with managed health care, where insurance companies set the rules for who can treat a patient and how the treatment should proceed.
More restrictions can be expected. No part of Virginia has the highest level of managed care, noted the consultants who crafted the medical group's network plan. The Lynchburg-Danville-Southside area has almost no experience with it, and Southwest Virginia is seeing only a "loose framework" of managed care.
The main objection to the network came from Northern Virginia, where physicians fear it will be an ineffective tool for them, because they have to practice across state lines and in the District of Columbia. However, officials from the Maryland and West Virginia physician groups urged the passage of the network and said their groups would be interested in working with the Virginia plan.
The network will be open to all physicians, whether they are members of the Medical Society or not, although nonmembers will be asked to pay a higher entrance fee. Membership in the network also will not interfere with a physician's right to join other groups. Nor will it mean that every contract negotiated must involve the statewide membership.
Since one of the objectives of the network is to give physicians more influence over health care in their communities, geographic subsets of the network will be able to contract independently.
The society invested more than $800,000 in the network study, including legal fees and fees to Lewin-VHI Inc., a Fairfax consulting company. Lewin said that the $7.8million start-up cost represents a "worse scenario" for the network.
Most likely, the network will require $6.1million in start-up costs and reach financial stability by the first quarter of 1997, the consultants said. Dues and income from health care contracts should provide $3.3million of the operating money. The remaining $2.8million could be raised through physician contributions, a loan or by taking a partner.
Consultants recommend that the society seek out a partner already established in the managed care field, because the partner could provide an instant infrastructure to get the network operating.
Two North Carolina managed care companies and one from Virginia already have expressed interest in a joint venture with the network, the consultants said.
Partners National Health Plans of North Carolina Inc. is one of those who has had discussion with the Medical Society. Partners last week became the first health maintenance organization, or HMO, to be licensed in Western Virginia.
by CNB