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Related Experiment Videos

The promise and the peril

D Whelan

    Tennessee Medicine : Journal of the Tennessee Medical Association
    |May 2, 1998
    PubMed
    Summary
    This summary is machine-generated.

    Provider organizations should consider forming or joining Provider-Sponsored Organizations (PSOs) to directly contract with Medicare. This strategic move allows for greater control over the Medicare population and financial benefits, mitigating the risks of inaction.

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    Area of Science:

    • Healthcare Management
    • Health Policy

    Background:

    • The Medicare population is crucial for healthcare providers.
    • Medicare is promoting risk-based plans and direct provider contracting.
    • Provider-Sponsored Organizations (PSOs) are encouraged to facilitate direct contracts with Medicare.

    Purpose of the Study:

    • To examine the strategic advantages and necessity for providers to engage with Provider-Sponsored Organizations (PSOs).
    • To highlight the potential benefits of PSOs in managing risk-based contracts with Medicare.
    • To underscore the risks associated with not participating in or forming PSOs.

    Main Methods:

    • Analysis of Medicare's policy shifts towards risk-based plans.
    • Evaluation of the role of Provider-Sponsored Organizations (PSOs) in direct contracting.

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  • Assessment of the operational requirements for PSOs in a managed care environment.

    • Main Results:

    • PSOs can eliminate intermediaries (HMOs), enabling providers to control their destiny.
    • Direct contracting via PSOs allows retention of financial risk and potential profit within the community.
    • Successful PSO management requires key elements for operating in a managed care setting.

    Conclusions:

    • Provider organizations must evaluate the potential of starting or joining PSOs.
    • Failure to engage with PSOs poses significant risks, including loss of control over the Medicare population and reduced revenue.
    • The greatest risk may be inaction, leading to decreased utilization, lower payments, and loss of capitation revenue.