Cost Containment Through Risk-Sharing by Primary Care Physicians: A History of the Development of United Healthcare

A new type of independent practice association has been organized to encourage primary-care physicians in private practice to become coordinators and financial managers for all medical care. Each patient chooses one internist, family or general physician or pediatrician and must be referred by that physician for all specialized care. The primary-care physician authorizes payment from his own account for all care provided to his patients. He shares any dificit or surplus remaining at the end of the year. After four years of operation, United Healthcare has 610 primary-care physicians treating 23,000 patients. Total hospital use during 1978 and 293 bed-days per 1000 patients, as compared with 479 for Blue Cross. The hospital-admission rate per 1000 was 88, as compared with 101 for Blue Cross. Average lengths of stay were 3.3 and 4.7 dyas, respectively. This plan represents another means to control costs in the private medical marketplace.