
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, November 29, 1995                   TAG: 9511290059
SECTION: BUSINESS                    PAGE: B-5   EDITION: METRO 
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE:                                 LENGTH: Short

DOCTOR-RUN HMO GAINS STRENGTH WITH BUYOUT

The Medical Society of Virginia's managed-care project gained muscle Tuesday when PHP Inc., its North Carolina partner, completed a sales agreement with United HealthCare Corp. of Minneapolis. The stock purchase of PHP is valued at $146.4 million.

United HealthCare, which had more than $8 billion in revenues last year, represents more than 40 million customers in a variety of insurance plans. United has managed PHP since it started in 1985. PHP and the Virginia physician group said this spring it would create a physician-run and directed health maintenance organization.

Gregory Lockhart, a Richmond thoracic surgeon who is chairman of the medical society's HMO committee, said United is committed to allowing patients open access to doctors within a group. He

expects the venture to be ready to offer insurance in 1996.

The Medical Society talked with about 15 regional and national insurance companies, including some in Virginia, when it began searching for a partner, he said.

"They blew us off," he said. "They didn't think doctors had any business providing health care insurance. I think that'll change."

The Medical Society has more than 6,600 members, almost half of the state's doctors. More than 4,000 members, including 300 from the Roanoke area, have indicated interest in the HMO.

The agreement calls for United to issue 2.43 million shares of common stock in exchange for all the outstanding equity ownership in PHP. United's stock closed Tuesday at $60.25 a share, up $1.75.

by CNB