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If Scott Rifkin's revolt against HMOs works, he and other 'old-time doctors'will be ... Operating Independently


It's 7:30 a.m., and on the 10th floor of the Alexander & Alexander building in Owings Mills, a vigilante group of doctors is plotting to take back control of its patients' health care.

Scott Rifkin, 35, an internist in a rumpled suit and the leader of this revolution, rushes in with the agenda. As the hunt for coffee begins, he tells them that Sandy Granger, a new hire, will hit the streets Monday to help recruit doctors in Baltimore, Towson, Annapolis and on the Eastern Shore and wants every name on their lists. Heads perk up.

In the past year, Dr. Rifkin and others have persuaded 35 Baltimore-area doctors to sell their practices in exchange for a share in a new, doctor-run company. The lure: a chance to regain the power to treat patients the way they want.

"This is the last attempt by private physicians to preserve relationships with their patients, to be old-time doctors," Dr. Rifkin says.

With a boyish face, tousled hair and steel-rimmed glasses he regularly pushes up his nose, Scott Rifkin has the air of an eager schoolboy. But his political connections -- his brother, Alan, is the top lobbyist in Annapolis -- and business smarts make him a force to be reckoned with as he seeks to put doctors back in charge of their patients.

His idea is the Doctors Health System, a health care network in which doctors decide the rules for care -- where and which patients get X-rays, operations, second opinions -- with the same lump sum of money that now goes to health maintenance organizations and other managed-care companies. He is telling insurance companies, "Give us your patients and a lump sum of money, and we'll take care of them."

What difference does it make who is in charge -- doctors, an insurance company, or hospital executives -- if everyone is trying to cut costs with preventive care, shorter hospital stays and less use of specialists?

If doctors set the rules, they will both make more money and provide better care, Dr. Rifkin says. Patients won't have to switch doctors when they or their employers switch health plans, which will make it easier for them to establish long-term relationships with physicians and get better preventive care.

Dr. Rifkin's group is competing directly with powerful new alliances of hospitals, which also want to manage health care.

Groups such as the Helix Health System, which owns Union Memorial, Franklin Square and Good Samaritan hospitals, and Johns Hopkins are deluging primary care doctors -- internists, pediatricians and family doctors -- with letters asking them to join health care systems. The hospitals hope they will get first crack at any patients that need to be hospitalized, and send other patients into hospital-run health systems that would provide a variety of care options -- nursing homes, hospices, home care, etc.

Dr. Rifkin says doctors can do all this better and cheaper because they don't have the overhead of a hospital or the pressure to fill empty beds. Nor are they beholden to certain hospitals that may be more expensive or to the hospital's specialists. And they would probably make more money.

One way the doctors would cut costs is by reducing hospital days and providing alternative and preventive treatments. The Doctors Health System could send a patient on IV fluids home from the hospital with a full-time nurse. Or it might send a carpenter to fix stair railings in the homes of patients over 70 who are at risk for falling and breaking a hip -- an injury that can lead to long hospitalizations and end in death from pneumonia.

"Hospital groups can't do this. They have to fill beds," Dr. Rifkin says.

To convince others, he carries around a golden-covered book authored by hospital consultants that rates doctor-run groups "A+" and hospital groups "C" for their long-term ability to run health care systems.

Driving his brother-in-law's old Toyota Camry, Dr. Rifkin criss-crosses Baltimore to sell everyone from Blue Cross and Blue Shield of Maryland to Gov. Parris Glendening on the Doctors Health System. An empty Kit-Kat wrapper lies on the car floor, partially hidden by the wrapper from a Baskin-Robbins ice cream cone. "Watch out for dog hairs," he tells a passenger.

Another doctor is taking his patients today, but on his car phone, Dr. Rifkin tells a businessman complaining of a sore throat to come by the Doctors Health System corporate office at 6 p.m.

"There's gotta be a flashlight there somewhere," he says. "You gotta treat your patients like they are family and, what happens ++ is, you get a lot of referrals," he says.

In seven years, he has built a practice of 3,000 patients. A quarter of them are people he grew up with or friends of his family. He gets 40 to 50 calls a day, including sometimes a dozen during the evening. He has always given out his home phone; it's easier than going through a service.

"One day I am going to paint a picture of him and he'll be on the phone," says his wife, Fran Rifkin.

But he is always willing to talk to patients. Once, he and Fran were on their way to a wedding when the phone rang. She listened to him explain the same thing nine times, nine different ways, to a confused patient. "And it wasn't even a major medical problem," she says.

His days are split between patients and the new business, for which he serves as chairman. Sometimes he leaves in the middle of the day and drives over to Franklin Elementary School to see sons Robert, 9, and Daniel, 6, in school assemblies. In baseball season, he and Fran trade off watching their sons play on different fields. They also have a daughter, Amy, who is 1 1/2 years old. He tries to be home for dinner every night, even if it's pizza, because his wife insists the family eat together. Often he goes out again afterward to make hospital rounds.

People often wonder when he sleeps. "He manages to give a piece of himself to everybody," Mrs. Rifkin says.

He has always wanted to be a doctor. It could be because as a 4-year-old, he spent a month at University of Maryland Hospital after open-heart surgery for a blocked passage to the heart. His doctor was R Adams Cowley, best known for founding Maryland Shock Trauma Center.

A second heart operation as a teen-ager helped him focus on a career in medicine, he says. He's always planning for the future.

"He's not even thinking 'today' anymore," says Howard Friner, a high school friend who drops in on Dr. Rifkin at Union Memorial one morning. "Today is finished. He's thinking 10 years from now."

He gets ideas the way hens hatch eggs. "He has a kind of deal-a-day mentality. He would be thinking of new ideas, new business ventures, projects and come to my office almost on a daily basis to talk about them," says Jeffrey J. Lefko, vice president of planning at Saint Joseph Medical Center. He first met Dr. Rifkin at Union Memorial Hospital.

His first venture, with partner Alan Kimmel and others, was a pre-operation examination center at Union Memorial that cut the hospital's costs dramatically. Next he was part of a group that built a physicians' office at Union Memorial.

But the Doctors Health System is a far more ambitious venture than anything he has undertaken. The doctors need cash -- probably $20 million in the next few years -- to pull off their revolution.

Dr. Rifkin is not daunted by the obstacles. A lot of people have talked about forming a doctor-controlled health care system, which is common in California, but no one else on the East Coast has done it. "It just seemed so obvious," Dr. Rifkin says.

When he graduated from George Washington School of Medicine in 1988, insurance companies were just starting to overrule doctors on patient care to cut costs. Dr. Rifkin didn't doubt their motives -- only their methods, which reduced the time doctors had with patients and sometimes interfered with good care.

"I have a low sense of frustration," he says. "When I see things working the right way sometimes for good and sometimes bad, I try to change them."

Now things are coming together: Paul Serini has moved from a health care practice at the law firm Venable Baetjer and Howard to help. New CEO Stewart B. Gold took a 65 percent pay cut as a vice president at Blue Cross of Western Pennsylvania. Sandy Granger and Terry Spoleti recruited doctors and negotiated contracts for a hospital -- Greater Baltimore Medical Center -- when they switched to Dr. Rifkin's team.

Chesapeake, Prudential and PHN-Flex Choice managed-care companies already have hired the group to provide basic patient care. They will pay the doctors part of what they collect from employers.

The Doctors Health System is already taking care of at least 70,000 people for a lump sum every month from insurance companies. It is planning to get into managing care for Medicare patients by Oct. 1. It expects to add another 30 to 40 practices by the end of the year.

More doctors are joining the system than those of hospital

groups or any other doctors' groups. They tend to be young and have thriving practices, like Francis Wiegmann, a Parkville internist who is 40 and sees 85 patients a week.

Dr. Wiegmann spent eight months investigating what he says is known around town as a radical group of doctors before deciding to join. "I haven't thought of anything I want to change, and I've thought about it a lot," he says.

One of the doctors reporting in at today's meeting has met twice with peers at Franklin Square Hospital and followed up with a letter. Another says he's got the ear of primary care doctors at St. Joseph Medical Center.

At Union Memorial, only a few internists are not signed up. At Mercy Medical Center, one doctor wants in after finding the hospital system quiz her over whether to X-ray a patient. More defections at Mercy are expected, and Dr. Rifkin agrees to hold a meeting there.

Although he is competing with hospitals, there are few hospital CEOs he can't get on the phone. He has talked to all of them about his idea.

Most don't think a doctor-run system will work. But one, St. Joseph Medical Center, gave him $5 million for 10 percent of the stock. The check came April 1 and the doctors used it to set up their office and buy a $1 million information system. "Anybody who has been assessing the trends understands this will be common in the future," says Mr. Lefko of St. Joseph.

Edward J. Kelly, president of Union Memorial, where the doctors group began, says it has promise. But he also says the golden book Dr. Rifkin carries around has just been updated, to note the financial difficulties doctor groups are having on the West Coast as employers demand lower and lower prices.

In the afternoon, Dr. Rifkin makes his pitch to Nelson J. Sabatini, the former Maryland health secretary now at the University of Maryland Medical System. Dr. Rifkin details the people in his company and some of its strategies -- such as giving its specialty work to a selected group to keep the doctors busy and lower the cost. "We got a colonoscopy down to $133 a person, two-thirds less than Medicare," he says. But the doctors still earn $400,000 a year. He throws out ideas, including a partnership with the hospital for 20 primary care centers in two years.

He gets Mr. Sabatini's attention. The meeting inspires direct talks between Dr. Rifkin and the president of the University medical system, Morton Rapoport.

Next, Dr. Rifkin heads to his first meeting with Gov. Parris N. Glendening, who is coming to the offices of public relations man David Nevins to talk with a group of small-business owners. Dr. Rifkin gets out of the car and grabs his jacket off the back seat.

"Oh, no," he groans. "It's covered with dog hair." A nice woman from the firm gives him a lint brush.

Health care reform is expected to be an important issue during the General Assembly's fall session.

One issue is whether doctor groups need to pass the same financial scrutiny by state regulators as insurance companies. Alone for a second with the governor, Dr. Rifkin asks Mr. Glendening not to let hospitals and HMOs freeze out groups such as his by making requirements too tough.

But he doesn't have to rely on the governor's support. He's got his brother, the top lobbyist in Annapolis, in his corner.

Alan Rifkin's clients include some of the most important health care companies in the state. Now he represents the Doctors Health System.

The Rifkins grew up modest, in Randallstown: industrious, hard-working, highly competitive.

The brothers talk every day, and they are always bumping into each other -- or somebody who knows somebody who knows them.

When Alan was chief aide to Mickey Steinberg, the former lieutenant governor of Maryland, Dr. Cowley of Shock Trauma appeared unexpectedly at his statehouse office.

" 'You don't know me, but 30 years ago I saved your brother's life,' " Alan says Dr. Cowley told him. " 'Now you own me a favor.' "

Dr. Cowley got the French helicopters he was seeking to transport the injured to Shock Trauma, though Alan Rifkin doesn't take the credit for it.

Some of Dr. Rifkin's patients are members of the Maryland General Assembly. He got to know them by being "doctor of the day" during the session. Alan would be promoting a bill coming up for a vote and Scott would tell an opposing lawmaker, "Well, with that sore throat you better not talk much today. Stay here and rest."

Only kidding, Alan says. The brothers are proud of each other. They serve as each others' sounding boards. They are both hot on the new doctors company.

It comes at a time when quality and cost are "under the same microscope," Alan says.

And Dr. Rifkin has no doubts that the Doctors Health System can manage care better than anybody else.

Good care for less. "That's cost and quality," he says.

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