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Biotech / Medical : AHTC Corp (AHTC)-formerly Advanced Health (ADVH) -- Ignore unavailable to you. Want to Upgrade?

To: gcrispin who wrote (152)	5/17/1998 8:44:00 AM
From: Tom D	Read Replies (2) \| Respond to of 371

More on global risk contracting Other than longer hours worked, what global risk contracting does is give the doctors financial incentive to expend the extra effort needed to do cost-effective medical care. For example, to stop by the hospital in the evening, not just in the morning, to discharge a patient (most hospitals count bed days according to the midnight census). I won't take 20 minutes away from my family on the way home from work to do this for a measily $9 per member per month which HMO's pay me. HMO's have some "bonuses" but they are a joke--too stingy. One must remember that our time is worth about $250 per hour on the revenue side. Moreover, I get the $9 whether I am cost effective or not. HMO's are too cheap to spend the money to give docs real incentives to control costs. That extra hospital day costs about $700 (the per diem rate in my city). I will expend 20 minutes to save $700 if I am in a global risk contract. IT is important. We have been doing global risk contracting with minimal IT so far, but we're spend $1M on a system in the next few months. We still don't have electonic medical records either--that is a maturing technology. My group is so small (40 internists doing Medicare HMO global risk contracting) that we were able to be successful because of peer pressure alone. We are growing rapidly, hence we anticipate the need for IT to be able to measure what we are doing. ADVH is counting $10M of revenues from IMM. They did not break down how they would arrive at $1.43 per share in earnings in 1999. I think mgmt is being very conservative about IMM. I expect upside surprises. Best Regards, Tom D