The low co-payment that health maintenance organizations offer for a routine office visit may be a popular bargain for patients, but it’s no longer a good sell for some pediatricians in Evanston.
Doctors at North Suburban Pediatrics say they couldn’t get an adequate financial return from HMOs that insure about 2,000 of their patients, so they will no longer do business with HMO health plans, effective Jan. 1.
Neither the HMOs nor the doctors would disclose financial terms of the contracts.
“People over-utilized (office visits) and HMOs underpaid us,” said Dr. James Downey, a pediatrician in the group.
When primary-care doctors such as pediatricians contract with HMOs, they typically get fixed monthly payments in exchange for furnishing all patients’ basic medical needs such as a routine office visit for a child’s cold.
At North Suburban, HMO-insured patients paid between nothing and $20 for each office visit through HMOs owned by Aetna Inc., Blue Cross and Blue Shield of Illinois, Cigna Corp. and United HealthCare Corp. of Illinois.
Downey said the low co-payments offered by HMOs resulted in medical service to HMO patients “constituting around 7 to 10 percent of our practices’ (HMO-insured patients) but amounting to 15 percent of our utilization.” The seven-doctor practice has 8,000 families, or nearly 20,000 total patients.
Industry analysts, however, say doctors can make more money on HMOs over the long-term because HMOs pay doctors each month even if patients stay healthy and don’t come in for office visits as often.
“It should be a good thing to have more office visits because preventive health leads to healthier people,” said Robert Mendonsa, general manager for Aetna in Illinois.
Education venture: Not all primary-care doctors are hostile to HMOs.
For the first time, the Illinois Association of HMOs on Wednesday will hold its annual fall managed-care conference with the Illinois Academy of Family Physicians, which includes about 4,400 family doctors in Illinois.
The joint education venture comes after family doctors last spring snubbed the state’s largest doctor group, the Illinois State Medical Society, and went with the HMOs’ position against regulation when patients’ rights bills being debated in the Illinois
Legislature.
The Lisle-based family doctors’ group and the HMO association were unsuccessful in their opposition to additional regulation of managed-care plans but say they are working together to make managed care work for patients.
Furthermore, the family doctors and HMOs will discuss how new patient-protection laws will be implemented during an all-day conference at the Rosemont Convention Center.
Blue Cross bids adieu: The acquisitive Blue Cross and Blue Shield of Illinois stayed away from a bidding war earlier last month when a Colorado insurer was on the block.
The state’s largest insurer, however, hasn’t lost its appetite for acquisitions.
In an interview following the Illinois Blues annual meeting last week, Chief Executive Raymond McCaskey disclosed that the state’s largest health insurer offered to buy Blue Cross and Blue Shield of Colorado and Nevada.
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The Illinois Blues, however, was rebuffed by Indianapolis-based Anthem Blue Cross and Blue Shield, which exercised a right to match the Illinois Blues bid of $155 million, Anthem said.
Anthem won the right to match any offers earlier in the year when the Illinois Blues wasn’t a part of the bidding process. Anthem already owns Blues operations in Indiana, Kentucky, Ohio, Connecticut and New Hampshire.
Despite $1.2 billion in reserves and a debt-free balance sheet, McCaskey said the Illinois Blues “didn’t want to get into a bidding war.”
There are, however, other Blues plans in McCaskey’s sites although he wouldn’t disclose them and said it’s “highly unlikely” a deal will be announced yet this year.