Physician-owned insurer uses high-tech approach

Internet, virtual business’ are keys to success

To compete in a competitive market, Medical Community Insurance Company (MCIC) in Houston has developed key business strategies that distinguish it from most other managed care companies and give it the potential to grow rapidly without a large expenditure of capital.

Strategies include heavy use of the Internet, creating a virtual business model, creating alliances with experts in the field, allowing the company’s staff to focus on customer relationships, and working with network physicians on health management.

The company is in the process of building one of the nation’s first Internet-based health care companies. Its World Wide Web site,, includes a public section with general information about the company and its insurance product, and separate sections, some of which are password- protected, for physicians, members, employer customers, and insurance agents.

Unlimited quotes

For instance, general insurance agents can use an Internet application to get quotes on groups of two to 50 employees and to enroll them through the Internet. That allows the company to deal with an unlimited number of quotes, says Christine Hollinder, marketing director.

The physicians’ area of the Web site has copies of physician service agreements and fee schedules, protocols for various diagnoses, applications to certify patient eligibility and advise of admission to the hospital, links to Physicians Inc. committees, and a bulletin board for physicians.Physicians Inc. is the physician-owned health care system in Houston that owns MCIC (see story, p. 46).

MCIC has created strategic partnerships with other organizations that allow it to have access to skills and experience without the expense of hiring full-time staff. For instance, the company has a strategic partnership with The Texas Medical Association Insurance Trust, which is a licensed third-party administrator that offers customer service, claims administration, and billing.

Other services provided by strategic partners include physician education, risk management, marketing, actuarial, credentialing, legal, Internet, and utilization review.

"These strategic partnerships enable a new company to have years of experience from day one without the expense of developing its own procedures or making big upfront investments in systems," Hollinder says.

Are you big enough?

If the physicians in your area are interested in starting a similar organization, here are some suggestions from Physicians Inc.:

1. Make sure your market is big enough to support your company. For instance, the Houston market has a population of 5 million. Capturing just 10% of that market is big business, points out Michael Manley, president and chief executive officer. "You have to be in a market that gives you the possibility of growth. If your market is too small, you can’t make it work," he says.

2. Make sure you have the support of the physicians in your community. This will help you develop a broad selection of physicians and hospitals, which is the key to making a managed care organization work, Manley says. "You need a delivery system that gives enough choice, but you also have to have physician leaders who will be involved." The plan has more than 150 physicians who volunteer their time on hospital review teams, governance, and committees to develop protocols.

3. Develop a comprehensive marketing strategy to make sure all stakeholders in your market know about your company. Marketing strategies include radio advertising, advertisements in a weekly business journal, direct mail, and special events for insurance agents. In addition, physician members of the network are encouraged to tell their friends and contacts with small businesses about the company.