HMOs Are Developing Their Own PODS

Medical Economics, October 14, 1996 | Go to article overview

HMOs Are Developing Their Own PODS


orth American Medical Management, based in Nashville, isn't the only company-or even the first-to form PODS-like entities. Several HMOs are doing the same thing to help organize and motivate office-based physicians.

In the early '80s, for example, Blue Care Network-Health Central, a staff-model HMO based in Lansing, Mich., started forming community physician groups outside its clinics. Then the only capitated plan in the area, Health Central was trying to get community leaders to help it recruit other doctors.

Today, the HMO has about 20 CPGs in a fivecounty area. They include 220 capitated primarycare physicians who refer to 650 fee-for-service specialists. The CPG doctors can pick specialists on the HMO panel or use other consultants who meet Health Central's credentialing requirements.

What makes CPGs similar to PODS is that their members know one another and share financial risk. Return of their 15 percent withholds depends on the CPG's performance, as does eligibility to share surpluses in hospital and referral risk pools. In addition, each practice may receive a care-management bonus based on its individual quality, utilization, and degree of cooperation with the HMO.

The number of CPGs that receive withholds back each year varies with their performance, notes FP Dale Rice, the HMO's medical director. Some are much better at controlling utilization than others, he says. But he believes that sharing risk has encouraged the CPGs to perform well, because he's noticed improvements in most of them.

"There are always physicians within each group who do an excellent job," says Rice. "We try to get them to work with the physicians who don't understand what's required of them." But he hasn't observed as much peer pressure in the CPGs as he'd like.

FP Marvin Fields of Jackson, Mich., belongs to a CPG that includes his two partners and six other physicians. In the 10 years his practice has contracted with Health Central, he says, he's never felt that his colleagues in the CPG were letting him down.

"There's a tendency to look at the other doctors and gauge whether they're performing well enough," he says. "But we've never encountered a physician who's a significant outlier.

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