A doctor-owned health insurance company took its first step toward becoming a reality Friday when about 225 San Diego physicians contributed a total of $1.5 million to fund the proposed company's administrative arm.
Doxx Enterprises now must raise $3 million in capital that is needed to fund the actual insurance company, according to Jack Ingber, a former aerospace and electronics industry executive who serves as chief executive of San Diego-based Doxx.
Doxx expects to draw that $3 million from about 1,000 San Diego physicians who would then become owners of the health insurance company. Many of those doctors also would become health-care providers for the Doxx organization, according to Ingber.
Last week's $1.5 million capitalization funded Equinoxx Inc., a Doxx subsidiary that will market the insurance company to the public and to operators of other health-care provider plans in San Diego, Ingber said.
Doxx expects to draw $3 million in capitalization from physicians who believe that doctors can effectively operate an insurance company that will flourish despite tight margins that have hurt the profitability of better-capitalized insurance companies, Ingber said.
"The very finest physicians from a quality standpoint happen to be quite cost-effective," Ingber said. "And the corollary is that some marginal physicians (from a health-care standpoint) may be the problem" on the economic side.
Doxx was incorporated early in 1987 by a group of physicians who "understand quite well why (health insurance companies) have gotten into the problems that they have today," Ingber said. "Doxx was structured to preclude those kinds of things from happening to us."
During the next few months, Doxx will begin marketing itself to "the small- to mid-sized employers, a market which is literally going untouched by larger companies," Ingber said.