Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, June 16, 1995                   TAG: 9506160044
SECTION: BUSINESS                    PAGE: A-9   EDITION: METRO 
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE:                                 LENGTH: Medium

HMO INTERESTS DOCTORS

More than one-third of Virginia's 14,000 doctors have said they're interested in a proposed doctor-owned-and-managed health maintenance organization.

The Medical Society of Virginia initiated the project in May, and by Thursday had received replies from 4,493 physicians with 4,230 wanting a prospectus. This week is the deadline for doctors to show interest.

Almost 300 Roanoke Valley doctors asked for information, said Joy Winstead, the Medical Society's spokeswoman.

"We felt like we needed 2,500 to go forward with it, and we had 2,100 in the first two weeks," Winstead said.

The medical group, which represents 6,500 of the state's doctors, said it plans to join with PHP Inc., a North Carolina managed health care company, to establish an HMO.

Shares in the MSV-PHP company are expected to sell for about $1,500. Primary care physicians must purchase at least one share and all other doctors would be required to purchase two shares.

The Medical Society wants a minimum $6 million to $7 million investment to start the company, but needs only half that amount to be raised from the doctors because PHP has agreed to match the physicians' investment. PHP is the second-largest of North Carolina's 13 licensed HMOs.

The trend in health care is for a HMO company to select a particular hospital and group of doctors which employees of client companies must use in order to get full reimbursement of medical expenses.

Many insurance companies have established these networks, as have some hospitals and entrepreneurial managed-care companies. But physicians have little say in the operation of these companies.

The Medical Society intends to involve doctors in operational decisions, and as stockholders they bear some of the risk but will be recipients of any profits.

The new company, as yet unnamed, should be incorporated by early summer, shares on sale by September and the company in operation by early next year, Winstead said.