Angry about losing income and power to insurance companies, the biggest organization of Maryland doctors has formed a company to explore ways to "compete effectively" against giants like Blue Cross and Blue Shield of Maryland.
The 7,000-member state medical society mailed a letter this month to doctors seeking $1,000 contributions and laying out ambitious goals.
The new, nonprofit company could serve as the "parent" of for-profit ventures owned by doctors, including an insurance company and a statewide network of doctors who would contract with employers and others to provide patient care, a function now performed mainly by insurers and "managed-care" companies such as Blue Cross, Mid Atlantic Medical Services Inc., Cigna and Prudential.
"It's still in the exploratory stages," Rose Matricciani, chief operating officer of the medical society, the Medical and Chirurgical Faculty of Maryland, said yesterday.
None of the for-profit ventures are ready to go, she said, explaining that the letter is intended to test the willingness of doctors to invest. No budget has been set.
Doctors in Florida are also working on such a program, said a spokesman for the American Medical Association. He had no details.
The medical society recently formed the nonprofit company, Maryland Physicians Inc., in response to widespread complaints by members about health maintenance organizations and similar insurance plans.
HMOs closely manage care, saving money by restricting the number of doctors they hire and patients' freedom to see specialists.
Doctors charge they are often arbitrarily turned away by HMOs that won't reveal their criteria for hiring and firing.
Some doctors also fume about the rules imposed on them by health maintenance organizations, including payment systems that reward doctors for prescribing fewer expensive tests and for making fewer referrals to costly specialists.
By creating their own statewide network, doctors would have an alternative to existing companies "that often seek to control physicians and patient care with seemingly greater consideration for economics than the medical needs of patients," the letter states.
The state medical society is also upset with insurance companies that are cutting fees paid to doctors. Blue Cross and Blue Shield, the biggest insurer in the state, with 1.4 million subscribers, ignited a furor with its recently disclosed plan to slash most specialists' fees by as much as 25 percent.
That plan is awaiting action by the insurance commissioner.
The medical society is increasingly at odds with Blue Cross.
Leaders of the society appeared yesterday at a public hearing in Baltimore held by Insurance Commissioner Dwight K. Bartlett III and urged him to delay action on the nonprofit insurer's plan to create a for-profit HMO company that would sell stock to investors.
The doctors warned that the HMO company could divert resources from subscribers to stockholders.
Irritated, Blue Cross President William L. Jews chided the medical society for not disclosing at the hearing its interest in creating what he called a "competing" network of doctors, which could rival Blue Cross' own network of more than 11,000 doctors.
Mr. Jews' comments, which he did not elaborate on, brought to light the medical society's interest in physician-owned alternatives to insurance companies.
Dr. Donald H. Dembo, president of the medical society, later told a reporter he had previously discussed the society's interests with Mr. Jews.
Dr. Dembo said the society hadn't discussed these interests publicly -- and didn't mention them at the hearing -- because "we don't have anything to really talk about."
The society has not received any checks from doctors yet, he said.
"I have great doubts we are in position to be in competition with any insurance carrier," Dr. Dembo said, alluding to the huge costs involved in starting insurance companies and doctor networks.
Blue Cross is a company with $2 billion in annual revenue.
The letter warns doctors of this obstacle, even while encouraging them to contribute start-up money. "It won't surprise you to hear that [the new nonprofit company's] ambitious goals, designed to respond to the clearly stated concerns of Maryland physicians, will cost a lot of money to accomplish."
At the least, the society's efforts could lead to creation of an organization that would act as an advocate and source of technical assistance for doctors dealing with insurers, Dr. Dembo said.