HMO upstart seeks physician investors

By CYNTHIA WASHAM

May 18, 2004 – June 7, 2004

A Miami-based upstart is poised to establish dozens of physician-owned Medicare HMO franchises in Florida, and later, nationwide.

“We're rolling out a full marketing effort in Florida and the rest of the country later this year,” said Robert Trinka, chairman and CEO of doublesys Corp. “We expect to be a significant player.”

Trinka is building a company that will give HMOs the benefits of central management and local ownership and governance. He'll head an administrative team in Miami to handle franchise operations. Franchises will contract directly with the Centers for Medicare & Medicaid Services (CMS) and distribute profits among local physician investors.

“We're combining the best elements of physician management, community health plans and economies of scale,” Trinka said. “The difference between us and other physician-owned plans is that we're supported centrally.”

Managed care over Medicare

Trinka founded doublesys, pronounced “unified,” following a 30-year career in health-insurance administration, including a vice presidency with John Alden. In March, he obtained start-up funds through a reverse merger by way of share exchange with e-4Music Networks Inc. The publicly held corporation is traded under the symbol UPHD.PK.

doublesys's debut comes on the heels of Medicare reform designed to increase enrollment in managed care. About 11 percent of Medicare beneficiaries nationwide are enrolled in managed-care plans. With enrollment of 18 percent, Florida has one of the highest participation levels in the country.

The Bush administration aims to increase enrollment nationwide over the next three years to 35 percent by increasing payments to Medicare managed-care plans. Plans are expected to invest the additional revenues in enhanced benefits designed to lure beneficiaries away from standard Medicare.

“We believe we'll double Florida's enrollment in a five-year span,” Trinka maintained.

doublesys has a market ripe for growth, agreed Bob Wychulis, CEO of the Florida Association of Health Plans.

“We still have a substantial number of Medicare beneficiaries not in Medicare plans,” he said. “I think we'll see continued and steady growth.”

Trinka's plan is to enroll beneficiaries by building a network of established physicians who work well under the constraints of managed care.

“(Beneficiaries) choose the plan by choosing their physician,” he said. “These doctors are residents. They have their practices established in the local community.”

Hundreds of physicians

Trinka envisions franchise networks of about 130 physicians, 80 to 100 of them investors. Each plan will be governed by a board made up of physician investors and doublesys representatives. Some franchises will be organized along county lines. Others will encompass two or more counties, depending on the region residents us for their health care. Each franchise will serve some 5,000 to 25,000 Medicare enrollees.

doublesys will provide start-up funds for franchises, with a “nominal investment” from physicians. Each franchise's board will determine the amount physicians invest, according to Trinka.

He predicted that investors will earn profits of 5 to 10 percent of gross premiums. So if the HMO receives $650 per month for every member, and an investor earns 10 percent, he or she would receive $65 in monthly profits for each of his or her doublesys patients.

Local plans will contract with hospitals and ancillary care providers.

For more information on doublesys, call doublesys, 305-779-1779, www.doublesys.com.

This article originally appeared in Florida Medical Business , an award-winning business newspaper read by Florida's 45,000 physicians and 3,000+ hospital executives for over 15 years. For more information, call 800-327-3736.