Facing financial problems, Dimensions Health Network, a Largo-based physician-hospital organization, shut its doors Nov. 15.

The five-year-old PHO, which negotiated with insurance companies and health maintenance organizations on behalf of its member doctors and hospitals, reported a $1 million loss on revenue of $24 million this year. Last year, Dimensions Health Network broke even on revenue of $18 million.

Dimensions Healthcare System, an integrated, nonprofit health care company also based in Largo, contributed $300,000 when the business started up, but it is a separate business. Dimensions Healthcare System's president and chief executive is Winfield M. Kelly Jr., former Prince George's county executive.

Despite rising health care costs and the unpopularity of HMOs, Dimensions Health Network "probably would have continued to function, but when one of the insurance companies canceled their contract, which was 40 percent of the business," that caused irreparable harm, said Henry Beumler, president of the network. He was referring to United Healthcare Corp., a managed-care service provider based in Minnetonka, Minn.

Dimensions Health Network, whose member organizations serve Medicare and Medicaid patients, is trying to limit the impact of its closing to 1,500 member doctors in the organization by putting them in direct contact with their insurance companies, Beumler said. "With us, [physicians] could deal with one entity" instead of filing papers with numerous insurance companies, he said.

The doctors may not be paid as much by the insurance company without the PHO negotiating for them, Beumler said.

In the long term, that places Medicaid and Medicare patients--who represent 74 percent and 26 percent, respectively, of Dimensions Health Network's 18,000 patients--at risk of losing coverage, he said. As compensation to physicians drops off, more doctors are leaving those programs--although he hasn't heard directly from Dimensions' physicians who plan to do that, he said. In Ohio, that trend is already advanced, and "we're starting to see that same sort of thing in Maryland," he said.

The 23 employees of the network were told Nov. 16 that the company was closing and that they would lose their jobs, Beumler said.