Employers’ interest grows in building coalitions

When William J. DeMarco wrote a book on setting up a community-based, physician-driven health plan in 1998, he did so with physicians in mind. But lately, most purchases of that book have been from employer coalitions.

"In the last two months, I’ve gotten more calls from employers than from doctors," says DeMarco, MA, CMC, president of DeMarco & Associates, a Rockford, IL, health care consulting firm.1

Employers who once bought services only from HMOs are now reconsidering and are looking for physician-hospital networks and physician networks, DeMarco says. "They want to go into direct contracting in exchange for higher performance and an improved clinical product."

Direct contracting is not a new concept, but it’s been gaining attention for several reasons, says David Main, an attorney with Shaw Pittman, a Washington, DC-based health care law practice. Health insurance premiums are on the rise again, and many people believe that insurance companies, particularly those that are for-profit, are taking more profits than they should.

Providers and patients alike have had real problems with the way big insurers administer insurance claims. And many people are frustrated when their plan doesn’t cover certain types of treatment, and they blame HMOs.

"The perception is that there is a big problem with HMOs and many employers with enough size are saying they can do a better job themselves," Main says.

Direct contracting is an idea whose time has come, adds Bo Bobbitt, a Raleigh, NC, attorney who has set up 70 physician networks in the Southeast. "People are ready for direct contracting. Employer reps are hungrier for it than the doctors are. As soon as self-funded employers get wind of it, they are the ones setting deadlines and asking when can the start."

The timing is good, Bobbitt says. "The physicians are already treating these people. They know them well and can feel good about taking charge of the physician-patient relationship again."

(DeMarco’s book, Physician Driven Health Plans: Innovative Strategies for Restoring Physician-Community Integration, is available from Amazon. com on their Web site: www.amazon.com.)


1. DeMarco WJ, Hekman KM. Physician Driven Health Plans: Innovative Strategies for Restoring Physician-Community Integration. New York City: McGraw-Hill; 1998. The book is available from Amazon.com.