Strategies for Physicians in Health Care's Market Revolution (The Five Stages of Managed Care) (Column‪)‬

THE FUTURE OF MEDICINE IS NO LONGER A MYSTERY. Physicians can "read the tea leaves" and calculate their future market position according to the level of managed care enrollment in their local marketplace. The pattern of managed care enrollment and provider integration is quite predictable. (1) America's practicing physicians don't need a weatherman to know which way the wind is blowing ... from the West, bringing HMOs, capitation, and "medical groups from hell" who take global capitation and dictate payment terms to all providers in the "food chain" of managed care. (2) Managed care is coming to every region and state. As of January 1, 1996, some 630 HMOs served 22.3 percent of the U.S. population, totaling 59 million, who have signed up with HMOs and their popular point-of-service (POS) alternatives. The annual growth rate was 16.7 percent. Despite rapid growth, the managed care takeover is far from complete, especially in the South and Mountain states. More than five states still have less than 5 percent HMO market penetration (please see Table 1).