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Do physicians fare better under physician-run managed care organizations? New data from California.
ABSTRACT: We surveyed independent practice association (IPA) physician groups in California about their approaches to staffing, physician payment, and governance. Most IPAs desired more primary care physicians but not more specialists. Capitation was the major mode of remuneration for primary care physicians in 77 percent of IPAs, and for specialists in 30 percent of IPAs. Most IPAs also used financial incentives related to use of referral or ancillary services. Boards of directors were dominated by physicians, but governance tended to be centralized rather than highly democratic. We found that IPAs mirror many of the broader trends in physician staffing and physician payment that exist in managed care organizations.
American physicians are increasingly organizing themselves into larger practice structures.1 One popular type of practice organization is the independent practice association (IPA). An IPA consists of a network of physicians who agree to participate in an association to contract with health maintenance organizations (HMOs) and other managed care plans. Although physicians maintain ownership of their practices and administer their own offices, the IPA serves as a corporate structure for negotiating and administeringHMO contracts for its physician members.2
The IPA physician group has become a prominent organizational structure in western states, especially in California. In other regions most HMOs contract directly with individual physicians in what have been referred to as "two-tier" managed care structures.3 In such systems HMOs deal directly with individual physicians, and payments pass from the HMO to the individual physician or small office-based group practice. In contrast, IPAs in states such as California represent a "three-tier" form of managed care. Rather than contracting directly with different HMOs, physicians in officebased practice participate in one or more IPAs, and the IPA-rather than the individual physician-relates toHMOs and othermanaged care plans. Both practicing physicians and HMOs retain corporate independence from the IPA. In its role as a contractual intermediary, the IPA accepts capitation payments from HMOs and distributes these revenues to participating physicians. The IPA does not actually own physician practices or employ physicians, nor does the IPA act as an insurance plan or a subsidiary of an insurance plan and market itself directly to health plan purchasers.
Most HMOs in California...