California’s Health Care System ‘Out of Sync’ with Resources
When KPC Medical Management declared bankruptcy three months ago, it was just one of the many "symptom[s] of a [heath care] system out of sync with resources," the Orange County Register reports. In the past two years, 38 physician groups statewide have filed for bankruptcy, closed or been sold, according to the California Medical Association. Numerous other groups "are near insolvency." The Register reports that a "financial crunch" in the health care system is "pitting patients against health plans, health plans against physicians and hospitals, and all three against the federal government." Reductions in Medicare reimbursements have "coincided inauspiciously" with an increase in overall health care expenses, the result of a growing elderly population and a "brisk demand" for expensive procedures. In addition, insurance premiums in parts of California are below the national average, decreasing the resources available to cover health care costs. Large managed care companies have compensated for low Medicare reimbursement rates by exiting the Medicare managed care system, leaving "nearly a million senior Americans" nationwide this year to find coverage elsewhere or return to fee-for-service Medicare. Meanwhile, in the private sector, insurers have been passing rising costs on to employers, who pay the "lion's share" of health coverage costs for most Californians under age 64. Ed Rotan, president of Medical Pathways, an Orange County physician management group, said, "Everybody's been squeezed, and it just has to change. If it doesn't change, I guarantee you there will be a more severe crisis than the KPC crisis in the next six to nine months. It will hit everybody" (Wolfson, Orange County Register, 2/11).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.