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Provider-sponsored networks. Physicians organize for direct contracting.
1Health Forecasting Group, Santa Clarita, CA, USA.
Physician Executive
|July 6, 1996
Summary
Provider Service Networks (PSNs) offer direct contracting between physicians and employers, bypassing intermediaries. This restructuring aims to enhance physician bargaining power in managed care, though facing potential opposition.
Area of Science:
- Healthcare Management
- Health Economics
- Medical Economics
Background:
- Physicians are restructuring healthcare delivery to adapt to managed care.
- There is a growing interest in direct contracting models to reduce costs and increase efficiency.
- The current healthcare system involves numerous intermediaries like HMOs and third-party payers.
Purpose of the Study:
- To introduce and explain the Provider Service Network (PSN) concept.
- To explore the potential benefits of PSNs for physicians and employers.
- To identify the market dynamics and potential challenges for PSNs.
Main Methods:
- Conceptual analysis of the Provider Service Network model.
- Examination of the direct contracting landscape in managed care.
- Identification of key stakeholders including physicians, hospitals, employers, and consumers.
Main Results:
- Provider Service Networks (PSNs) represent a new managed care model facilitating direct contracting.
- PSNs enable physicians and hospitals to form networks, acting as direct sellers to employers and government programs.
- This model aims to eliminate intermediaries, potentially reducing costs and improving physician leverage for over 225 million consumers.
Conclusions:
- PSNs offer a direct contracting alternative to traditional managed care organizations.
- The success of PSNs may depend on overcoming opposition and navigating market complexities.
- This model has the potential to significantly alter the healthcare contracting landscape.