Analysis of the Transfer of Risk and Clinical Management Responsibilities to Physician Organizations

How do HMOs share risk with capitated physician organizations (MDOs)? Researchers at the University of California at San Francisco studied risk-sharing arrangments of MDOs, which can be independent physician groups, but also can be owned or controlled by a parent company (examples include physician practice management companies (PPMCs), hospital-led networks, network model HMOs, and organizational hybrids). The researchers addressed a number of questions, including: what contractual and ownership relationships do MDOs enter into with affiliated entities and subcontractors? How do at-risk MDOs clinically manage care, and how do they use physician payment methods and clinical information systems? What determines how much risk transfer takes place? The investigators also examined the determinants of MDO risk-bearing, using a multiple case study design to study 40 different MDOs in four different health care markets. The goals of the project were to: 1) systematically describe risk-bearing arrangements between MDOs who take more or less risk, and 2) generate insights and hypotheses about relationships between increased dependence on risk-bearing and key MDO organizational relationships and management practices.