Byline: Laura Koss-feder
Convinced that anyone could do a better job of providing affordable health insurance than the industry giants, a group of New York doctors decided six years ago to create their own insurer.
At first, it seemed they were right. Attracted by the promise of better service and premiums that were 25% to 35% lower than what the big players charged, people flocked to Atlantis Health Plan. Within two years, it boasted 25,000 members.
Then the wheels fell off. The 10 founding doctors had been right about the market's need for a company with their model but woefully wrong about their ability to build and run it.
By 2002, Atlantis' overtaxed claims-processing system went into meltdown mode. Claims went unpaid for weeks, then months. The company had little idea how much it owed or to whom. Disgruntled members defected in droves.
'We felt that we could use our expertise as doctors and our knowledge of the health care marketplace to control costs without affecting the quality of care,'' says Dr. Sury Anand, a Brooklyn gastroenterologist who is chief executive and a co-founder of Manhattan-based Atlantis. 'But we were not professional managers, and soon we were in chaos and in danger of going under.''
To save their enterprise, the physicians changed virtually everything. To begin with, they dug into their and friends' pockets for $10 million, on top of their original investment of $9 million.
The cash infusion let them make crucial, and costly, fixes. To begin with, the group contracted with Houston-based claims processor Patriot Managed Care Systems to build an operation from scratch.
The doctors then went on a hiring spree for professional managers. One of the first on board was Thomas Dwyer, who had worked at Arthur Andersen as well as for health care providers. Installed as Atlantis' chief operating officer, Mr. Dwyer recruited seasoned insurance professionals to run the various departments.
A real sales structure
one of the most important of those hires was 20-year industry veteran Steven Denes, who became senior vice president of sales in April 2004. He and his team of nine have nearly doubled Atlantis' client lists, though they are still far off highs established in 2002.
'Several clients who had left us even came back,'' Mr. Dwyer says. 'They knew we were on the right track and could deliver the best prices.''
With professional managers handling things, the doctors have been able to return to the tasks they know best: supervising medical care and working directly with the network's participating physicians and hospitals.
Rebuilding membership
company officials say it will most likely take another few years to regain peak membership levels; in other ways, Atlantis is far better off.
It posted revenues of $20 million last year on contracts covering employees of 800 small companies, 30% of which are in Brooklyn. Atlantis' 75 employees also oversee relationships with its network of 15,000 doctors and 43 hospitals.
Atlantis recently opened an outpatient center in Brooklyn that offers diagnostic services; no co-pays, deductibles or preauthorizations are required. Two similar centers, in Manhattan and Queens, are scheduled to open by May.
'Atlantis has carved out a real niche and has turned itself into something that people really want and need: a low-cost insurance provider that will even serve the sole proprietor,'' says Richard Allen, president of American Corporate Benefits Inc., a Manhattan broker and consulting firm.
Shaun Clancy agrees. The owner of Foley's NY Bar and Restaurant, in Manhattan, says that four of his 15 employees have opted for Atlantis health plans. Coverage costs range from $220 to $600 a month, and Mr. Clancy contributes 50%.
'Atlantis is a straightforward insurance company with no hidden fees or agenda,'' he says. 'It gives my staff and me some piece of mind.''
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