What are we without risk? The physician organization at a crossroads.

The managed care market in Chicago is experiencing rapid change. As health maintenance organization (HMO) enrollment flattens or even declines, and capitation becomes less sustainable for many, physician organizations are reevaluating their continued participation in risk-based contracts and are struggling to define their future roles. Physician organizations are looking for new ways to provide value to their physician members. Physician hospital organizations (PHOs) in particular are reassessing how the organization can continue to serve the interests of both the physicians and their hospital partners. To better understand the concerns of physician organizations, The Lowell Group surveyed Chicago area provider executives on their top issues. Three major concerns emerged: (1) protecting the financial health of the organization; (2) predicting the future of the managed care industry; and (3) evolving the physician organization to meet changing market conditions. Ultimately, physician organizations must make business decisions that support their true goals-serving patients and purchasers of care, physician members, and the organization's owners.