THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, November 29, 1995 TAG: 9511290398
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MARIE JOYCE, STAFF WRITER
LENGTH: Medium: 52 lines
Virginia largest doctors' group decided to start a health maintenance organization to help physicians retain some power in the tumultuous world of health care. On Tuesday, the doctors added a big gun to their arsenal.
The Medical Society of Virginia announced that its nascent HMO would be backed by one of the country's biggest health care companies, United HealthCare of Minnetonka, Minn. The move comes as a result of United HealthCare acquiring Physicians Health Plan, a North Carolina company that originally agreed to back the doctors' HMO.
United HealthCare covers 14 million people nationwide in managed care and traditional health insurance plans. In addition, United HealthCare handles about 27 million other people in special plans such as managed mental-health care. It reported profits of $97.3 million for the third quarter of this year.
``It gives us a lot more resources to work with,'' said Joy Winstead, the society's director of communications. The Medical Society is Virginia's statewide professional organization for the doctors, with 6,600 members.
The venture would be United HealthCare's first managed-care plan in Virginia.
However, the company already handles health care for about 190,000 Virginians, a company spokesperson said. Those clients are enrolled in more traditional health plans, and all were acquired last month, when United HealthCare took over MetraHealth Cos. for $1.65 billion. MetraHealth was formed by the merger of the Metropolitan Life and Travelers health insurance businesses.
United HealthCare also has been involved with running HMOs for poor people on Medicaid, a relatively new concept that Virginia's government is encouraging. United also has experience running Medicare HMOs.
The company that United plans to acquire, PHP, is an HMO owned by North Carolina doctors and by a Greensboro hospital and a surgery center.
The Medical Society officially decided to create an HMO last year and announced the alliance with PHP in May. But the HMO still exists only on paper. Enrollment of physicians was stalled by talks between PHP and the Minnesota company.
A United HealthCare spokesman said details of the doctors' enrollment still must be worked out. Society organizers have said all members would be eligible. by CNB