The second dimension is the legal relationship between the physicians and the
MCO, as characterized in the following listing.
Employees: Physicians are simple employees of the MCO, with no
intervening physician group. Except for governmental MCOs, corporate
practice of medicine bans make these MCOs less common than
independent contractor MCOs.
Physician Group: Developed in response to corporate practice of
medicine bans, physicians are either employees, partners, or
shareholders in a physician- controlled partnership or professional
corporation, which in turn contracts with one or more MCOs. This is the
most common organizational structure for the older HMOs, such as
Kaiser-Permanente Health Plan in California.
Independent Contractor: In this model, physicians may be either sole
proprietors or members of a partnership or professional corporation, but
they individually contract with one or more MCOs. The contracts are
similar to those utilized in the physician group model. Interference with
individual physician decision making is much more personal and
intrusive when there is no physician group to function as a buffer
between the physician and the MCO.