This series of articles will dispel some of the misconceptions about HMOs. Doctors of Oriental medicine are being seduced with misinformation and false assumptions to become part of the HMO panels.
Along the way, certain myths about HMOs have emerged. Let me dispel those myths and share with you some of the realities.
Myths about HMOs
Myth #1: The HMO is a great way to bring patients to a practice, especially for new doctors who are just starting out. (A.K.A.: The HMOs are another source of patients for your practice; the HMO will send patients right to your doorstep.)
Reality: It can take up to a year or more to be listed in the insurance company directory patients use to locate doctors within their HMO plan. Therefore, insured patients won't know who you are for a long time. Do not expect the door to come crashing down with new patients simply because you signed up with an HMO.
Where are those patients? It is my experience that patients will find you through your networking in the community, or through a referral from a previously satisfied patient. In my practice when I was with the HMOs, I averaged about one patient per month who had selected me from the HMO list only. This means that the patient decided to see an acupuncturist, opened the HMO directory and selected me. Was this selection based on my clinical skills? I think not. Usually the selection is based on my practice location, or a warm feeling when my name was read. If I relied on the HMOs to develop my practice, I would be out of business. What grows a practice is marketing in the community. In my practice, I average five to six new patients per week from my other marketing methods. This means that less than 4% of my new patients came directly from the HMO directory. I could not survive, and neither can you, if you depend on one new patient each month from the HMO.
Myth #2: If you do not sign up for the HMO panel, someone else will. The HMO has only a limited number of spaces available in your area. Sign up quickly before it is filled.
Reality: This is a high-pressured sales tactic to get you to sign up. The HMO needs adequate geographic distribution throughout the state to have an eligible panel, otherwise the HMO panel cannot exist. The HMO preys on the desperation of new graduates who are facing student loan repayment, living expenses, and have little or no knowledge of marketing methods. The HMO needs just a few desperate providers to keep the panel alive.
Myth #3: It is good to have a balanced patient base that has a variety of income sources. HMO patients should be part of this. Every practice should have a balance of cash, insurance, personal injury, workers' compensation and HMO patients.
Reality: A decade ago, practice management companies were saying that a well-balanced practice needed a variety of patient payors. If workers' compensation went south, a doctor could fall back on personal injury and health insurance for financial survival. When the HMOs came on board, they were added to the mix. The HMOs promoted themselves as a good way to get a set income and steady stream of patients and a foundation for building a successful practice.
What the HMOs did not tell you is that they are able, in most cases, to undercut the other insurance companies for the employer's health care contracts. This is made possible because you, the doctor, decided to take substantially less for your services. Now 10 years later, the insurance companies are going out of business or being absorbed by others while the HMOs are gaining more market share, and you as a doctor are seeing your practice income shift. Instead of your practice income being 5% from HMO patients, it is now 50% or more. Congratulations: you have more patient visits per week; your practice is making less per patient visit; and your practice income is increasingly dependent on one payor source - the HMO.
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