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Physicians contracting with managed care.

¹University of Arkansas for Medical Sciences, Little Rock 72205, USA.

Health Marketing Quarterly

|December 9, 1994

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Physicians with lower costs are not more likely to join managed care plans like Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). Physician decisions are influenced by demographics, location, and market factors, not practice costs.

Area of Science:

Health Economics
Healthcare Management
Physician Behavior

Background:

Managed care systems, including Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), are associated with lower healthcare expenditures and utilization rates compared to conventional insurance.
Limited research has explored provider-level factors, specifically physician characteristics, that may contribute to these observed differences.

Purpose of the Study:

To investigate whether physicians with lower practice costs and utilization patterns are more inclined to contract with managed care organizations (HMOs and PPOs).
To identify key factors influencing physicians' decisions to participate in managed care networks.

Main Methods:

Logistic regression analysis was employed.
Data from the 1984-1985 Physician Practice Costs and Income Survey were utilized.

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Main Results:

No significant evidence was found to support the hypothesis that physicians' contracting decisions with HMOs and PPOs are linked to their practice costs or utilization patterns.
Physician socio-demographics, practice region, and prevailing market conditions were identified as significant determinants of managed care contracting.

Conclusions:

Physician cost and utilization are not primary drivers for joining managed care networks.
Physician demographics, geographic location, and market dynamics play a more crucial role in managed care contracting decisions.