THE EDITOR'S CORNER
Group practice may be a mechanism which, when properly used, can preserve a private enterprise system in the professions by offering an alternative to socialization. This can be done if private professional group practices are able to provide comprehensive, high quality health care for large numbers of people and yet incorporate characteristics which have attracted support among consumer groups, third party organizations, and legislators.
One of the concepts that is currently in high favor in those circles is the HMO or Health Maintenance Organization. HMO is not one thing. It includes a variety of possible mechanisms. Basically, it is a group of providers who contract to deliver a menu of more or less comprehensive health services in return for a per capita prepayment.
One of the more successful arrangements of this kind is the Kaiser-Permanente Plan. Within it, the Kaiser Foundation Health plan contracts for health care for over two million people in six geographic areas. The Health Plan is a nonprofit, tax-exempt organization. It makes contracts with individual and group clients for specified items of care, for a specified period of time, for a prearranged and prepaid premium.
In order to fulfill these contracts, the Health Plan also contracts with the Kaiser Foundation Hospitals for beds and with the Permanente Medical Groups for professional services. Like the Health Plan itself, the Hospitals are nonprofit, tax-exempt organizations. The Medical Groups, on the other hand, are independent, profit-making, taxpaying partnerships and associations. The Medical Groups make fee-for-service contracts in addition to the prepaid contracts. Since the Hospitals and the Medical Groups share in annual surpluses, it is to their advantage to operate efficiently.
More than one thousand full-time physicians and numerous part-timers are organized into closely-knit groups, most of whose members are specialists or the equivalent, operating in health centers at or near Foundation Hospitals. They serve as salaried employees of the Group for three years before they are eligible to join the partnership. In addition to an acceptable salary level, the doctors enjoy a variety of fringe benefits.
There are other interesting aspects to the Kaiser-Permanente Plan. It does not include a profit-making third party fiscal intermediary. The presence of profit-making insurance companies as third parties in health care could only be justified if it can be shown that they have a unique service that no one else can deliver, or that they can perform that service less expensively than other agencies, or that they can provide more protection to the public for cost, quality and quantity of service. There is some indication from the experience of the Kaiser Permanente Plan over the past quarter of a century that the opposite may be true; that this method is more economical; that involving the doctor in a share of surplus produces a more efficient and economical service; that professional men who have joined together in this manner are better able to police themselves and to reevaluate the costs and levels of service.
Thus, it seems possible that a mechanism such as Kaiser-Permanente can offer a high quality of health care satisfactory to the consumer, and professionally and financially satisfactory to the doctor. This could avoid some of the seemingly inevitable inroads that commercial insurance companies make into professional practice when they pay the doctor, define the program, and police it for performance and quality.
It is significant that the Kaiser-Permanente Plan does not include dentistry. The cost of the premiums would jeopardize the medical program. So, it is far from clear what course a similar prepaid dental program would take.
Groups are attractive to health buyers because they offer continuity of service, they can be set up to encourage preventive programs, they are easier to deal with from the point of view of administration, finance and quality control. Also, health buyers expect groups to operate more economically than individuals and result in a reduction of cost of health care. Whether this is true in dentistry to any significant extent remains to be seen. However, we had better find an alternative to the kind of group which operates as a closed panel exchanging low fee, low quality dental services for high volume referrals. Rather should the problem be approached from the other end--how to develop a high quality, high volume service and how to make that available to the maximum number of people.
So, it may be important to know something about group practices and we are indebted to Dr. Melvin Mayerson for giving us a detailed description in this issue of JCO of the group orthodontic practice to which he belongs.
