SELECTING MANAGED CARE PLANS

Thousands of managed care plans exist today, but you may find only a few that fit the needs and style of your practice. Consider the following as you assess which plans can benefit your practice:

Spread your risk.
Any one managed care plan should not account for more that 10 to 15 percent of your practice income. Otherwise, you are vulnerable if a plan drops you or tries to renegotiate a lower rate.

Your geographical location will impact your choices.
If your practice is located in a rural area with few managed care programs, you may feel relatively secure practicing independently. In areas with many dermatologists and a high concentration of managed care plans, you may consider forming or joining IPAs or merging with another practice to increase your bargaining position.

Network.
In the long run, managed care organizations may prefer contracting with large multispecialty groups over solo practitioners. Physicians that don't join together will eventually be passed over by most managed care plans.

Keep statistics on your business. Track the average number of patients seen weekly, patient age distribution, average charge per patient, practice revenue and expenses, and your overall business goals to help plan your managed care strategy and successfully manage your practice in line with your goals. Keeping a close eye on your expenses and income and performing periodic financial analyses will provide you with data critical in determining the potential profitability of a contract and in negotiating effectively. [Section IV - pages 5 to 13]

Managed care is a complex area -- at some point you'll want to consult an advisor who specializes in the field of managed care to guide you through the intricacies of negotiating managed care contracts or to negotiate contracts for you.