Resolution 7: Insurance-Owned Physician Practices

Introduced by: George L. Bradley, DO – Delegate, Gaston County Medical Society

Referred to: Reference Committee No. 1 – Timothy M. Beittel, MD, Chair

WHEREAS, a new trend in health care has emerged with the acquisition and management of physician practices by health insurance benefit providers; and

WHEREAS, four of the five largest of three insurance providers, WellPoint, CIGNA, Humana, and HIMARK have increased the number of physician practices that they control within the last year; and

WHEREAS, by having whole or part ownership of a physician practice, insurance providers maintain authority to directly influence standards of practice by physicians in their employ through financial incentives, penalties and other arrangements; and

WHEREAS, the business plan of insurance providers have the potential to conflict with the business plans of physicians, hospitals, other providers of healthcare services, emerging aspects of proposed health care law, or patient advocacy; and

WHEREAS, the ownership of physician practices by insurance providers combined with ownership and management of hospitals by insurance providers, may further limit options with regards to hospital care; therefore be it

RESOLVED, That the North Carolina Medical Society opposes the ownership, in part or in whole, of physician practices by health insurance benefit providers; and be it further (policy)

RESOLVED, That the North Carolina Medical Society staff liaison to the NC Department of Insurance to advise the DOI of the concept of insurance-owned physician practices, and encourage the DOI to preempt such practices from emerging in North Carolina. (action)

Fiscal Note: Estimated additional budget impact: $2,000. Current resources will be allocated based on the priorities of the Society and the NCMS budget.

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  • Sandra Brown

    You’re looking at an ACO, essentially. There will be corporate medicine and, on the fringes, independent medicine. This resolution attempts to resist the tsunami that is the PPACA. More study is needed.

  • Doug Sheets MD

    I think this would be a good resolution to refer for study and report back. It would be nice to know the magnitude of this problem before we develop further policy.

  • Jeff Wright

    I noticed no one has commented on this. Perhaps Dr. Bradley can explain how this is different from Kaiser?

  • Tim Reeder

    The ACO model may evolve into this very idea. It is not hard to imagine that a single entity becomes the employer of the physician, owner of the hospital and also the insurance company. Does the physician employee of an insurance company have any more risk of influence than a physician owned by a hospital or health system. I’m not sure. I think this is a very important issue. This resolution may be correct, but I would rather refer to the Board for report back.