Plans' execs mixed on impact of fee schedule.

With Medicare's physician fee schedule set to begin phasing in this January, executives at healthcare plans and medical groups are mixed on the impact of the plan. Because the schedule will lower fees for specialists and raise payments to primary-care providers, many healthcare managers are concerned about cost shifting. Others expect the schedule to have a minimal effect on fees because many prepaid plans already have resource-based payment methodologies.

HMOs form networks to serve firms with offices in more than one region.

Health maintenance organizations are establishing administrative links nationwide in response to concerns from the business community about cost and quality. At least six HMO groups have formed to service companies with offices in more than one part of the country. Industry experts point out that hospitals on good business terms with successful HMOs in their areas stand to benefit through increased volume and prestige.

Facilities slow to join Medicaid HMOs.

Hospitals generally have been slow to get involved in public-sector managed-care programs, even though proponents say the programs increase provider reimbursement and improve access to care, but hospitals' fear of managed care and a lack of cooperation between physicians and hospitals on the programs may doom a nationwide hospital-sponsored managed-care approach.

HMOs show new signs of consolidation.

As a record number of Americans join managed-care plans, the industry is showing signs of another round of consolidation. Enrollment in HMOs climbed 5% last year to 36.5 million, but the number of prepaid plans has dropped significantly since 1988.

Insurance, business leaders fault state-mandated benefits.

As healthcare costs continue to soar, the cost of providing medical insurance is becoming unaffordable for many businesses, contributing to the growing number of uninsured. Business and insurance leaders say part of the blame rests with the growing number of state-mandated benefits, which they say should be rolled back.

CAC-Ramsay finds formula for growth, profit in South Florida.

CAC-Ramsay, a unit of Coral Gables, Fla.-based Ramsay-HMO, seems to have found a formula for growth and profit, specializing in serving the Hispanic populations of southern Florida. Thanks to above-average federal reimbursement rates, the HMO can offer Medicare enrollees a multitude of free perks and healthcare services through its clinic-based network.

Defense Dept.'s cost-cutting could forge new civilian links.

Defense Dept. belt-tightening could provide new opportunities for managed-care joint ventures between military and civilian providers. A new, three-year program would empower military hospital commanders to establish provider networks and negotiate discounts with civilian providers.

Humana banking on insurance.

In a push to regain Wall Street's affection, Humana is forging ahead with its insurance business. But some critics wonder if the growing emphasis on health plans is at the expense of the company's hospital division. Humana recently expanded its reach into Chicago, where it bought both a health plan and a hospital.