It's going to require a relatively large employer who knows what his employees want. Practical applications For L. Maximilian Buja, M.D., dean of the University of Texas Medical School at Houston, this discussion crossed from the theoretical to the practical about two years ago. Buja's school is associated with a 500-physician IPA centered at Hermann Hospital, a teaching facility and one of 10 hospitals in the Memorial Hermann Healthcare System, which accounts for a fourth of the Houston market. In addition to typical MCO contracts, the IPA in 1997 began contracting directly with Randall Supermarkets, offering health services to the company's approximately 5,000 area employees. There's a legitimate purpose for the insurance industry and that's taking on risk.
Direct contracting has to be done carefully in terms of analyzing potential patient populations.
HMOs have little to fear. Perhaps, though, that's not the issue. The managed care backlash is sending a message to many employers that they are failing in that endeavor. American industry, remember, has a way of taking what's impossible in one generation and making it common in the next. It is true that PPO enrollment went up more than HMO enrollment, but remember that HMO enrollment, while it dropped 1 percent of total managed care, actually grew in gross numbers.