Your Doctor's Boss May Be An Insurance Company

The hassles were getting to Dr. Ruth DuPont. Steep malpractice premiums, labyrinthine billing systems, and mounting paperwork were taking a big toll on the family physician's time, not to mention her finances. So last fall, DuPont took a step many physicians consider heretical: She signed on with Aetna Life & Casualty. By becoming an employee in Aetna's growing network of doctors, DuPont shed tiresome, costly administrative chores in one fell swoop.

Physicians such as DuPont are becoming hot commodities. Over the past two years, hospitals have been buying up doctors' practices aggressively, sucking doctors out of insurer-run managed-care networks and signing them up as employees. By cementing ties with doctors, hospitals gain leverage in the changing health-care arena. Now, insurers are fighting back, buying or building practices to secure a flow of patient revenues and avoid being cut out of the loop by health-care alliances. "If insurers don't do this quickly, they'll be out of the business," says Samuel H. Havens, president of group operations at Prudential Insurance Co. of America.