Physicians Practice - September 2008 - (Page 44) GETTING PAID Lessin is quick to point out how difficult the insurance business can be. With more than two decades’ experience, he is constantly amazed at companies that balance estimated and unclaimed expenses against actual revenues yet still may not know how they are performing financially until halfway through the year. A wrong guess about the number of unsubmitted reimbursement claims can mean the difference between a very good year and bankruptcy for some insurance organizations. “It is not a business for dilettantes,” confirms Lessin. “You had better be prepared.” MVP wasn’t always prepared, and it nearly paid the price for that mistake. In the early 1990s, with healthcare costs on the rise and most managed-care plans facing a financial crunch, MVP’s financial ratings were down in the D range. (Its rating is back up to a solid A.) The company had a number of problems that could have put the company out of business, including a falling out with one of its contracted IPAs that caused it to stop operating in five counties in northern New York. (Even today, MVP doesn’t offer coverage in that area.) “It’s a very risky investment,” says Lessin. “That doesn’t mean it can’t work, but it might have worked easier 25 years ago when there wasn’t a lot of managed care around and there weren’t all these behemoths to compete with. … You should go in with your eyes open.” That’s sage advice for anyone inspired by TPAC or MVP’s examples. A lot depends on your own market situation, the regulations in your state, and the goals you and your partners have for starting an insurance company. If you’re only in it for the money, you might want to think again. “A lot of physicians would like to start something like this,” says Rubadue. “It’s going to look very attractive, but it’s also a very regulated industry.” It’s fine to put patients before profits, but any successful insurance venture, like any successful medical practice, has to be run like a business. “If it’s just a bunch of doctors saying, ‘Hey, we can do this,’ I would have my doubts,” says Lessin. “Being in a business you don’t understand is a ticket to disaster.” • Robert Anthony, BA, a former associate editor for Physicians Practice, has written for the healthcare and practice management industries for six years. His work has appeared in Physicians Practice, edge, Humana’s Your Practice, and Publisher’s Weekly. He is based in Baltimore, Md. He can be reached via editor@physicianspractice.com. 44 | PHYSICIANS PRACTICE | SEPTEMBER 2008 WWW.PHYSICIANSPRACTICE.COM http://medical.konicaminolta.us http://medical.konicaminolta.us http://WWW.PHYSICIANSPRACTICE.COM
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