Is your organization strategically prepared to be a Medicare PSO?

The new Medicare+Choice managed care program authorized by the Balanced Budget Act of 1997 affords hospitals and physicians an opportunity to contract directly with HCFA to provide services to Medicare beneficiaries through a provider-sponsored organization (PSO). Developing and operating a Medicare PSO is a complex process, however, and organizations that lack certain strategic and operational "readiness" characteristics may encounter significant barriers to success. To ascertain their readiness to form a Medicare PSO, providers should assess their capabilities in six key strategic areas: culture and governance, organizational and legal structure, market position and strategy, provider network, risk-contracting experience and supporting infrastructure, and capital resources and fiscal soundness.