For PSOs, it's ... ready, set, go!

Abstract

With the signing of the federal balanced-budget act earlier this year, the long-awaited era of the provider-sponsored organization is here. The legislation contained a provision giving the green light for Medicare PSOs, an option sought for years by hospitals and other providers. If the rhetoric about PSOs is to be believed, the organizations are the next generation of managed-care plans, ones that are locally controlled and operated by providers, not remote insurance companies. To many in the industry, this idea has become the last best hope for provider-directed healthcare. The government is scheduled to issue the rules for PSO financial solvency and operation this spring so providers can begin forming their organizations. But before they can accomplish anything, PSOs must be sold to consumers and to regulators. In this issue, we examine the marketing and financing of a new breed of healthcare organization.