COLORADO: New PacifiCare System Stirring Debate

      Beginning Jan. 1, PacifiCare of Colorado, the state's largest HMO, will institute a new system of paying doctors which it hopes will "return health care decision-making to the exam room." Under the new system, PacifiCare will "break its physicians into groups of primary care and specialty doctors, a system commonly called pods." Each pod is then paid a set capitated fee for each patient, leaving it up to the doctors to provide the most efficient care possible under the set fee. "PacifiCare began testing the new program this year," with problematic results. Twelve of 18 pods lost money, leading the doctors' physician management company, Columbine Medical Group, "to cut its payments to doctors to stretch its money through the year." As a result, many physicians simply quit the plan, while others went out of business. Dr. Daniel Brugioni, medical director for Denver Orthopedic Specialists, said, "We were not bringing enough money in the door to pay our costs. We bailed to cut our losses and as a statement that what PacifiCare is doing is making it miserable for physicians, which is making it miserable for patients."

Pros And Cons
      The Rocky Mountain News reports that Pacificare claims doctors like such capitated plans "because it gives them more control and they have the potential to make more money if they can provide efficient care to their patients." Dr. Val Dean, CEO for Pacificare, said, "This will take PacifiCare out of the medical micromanagement position," an opinion with which many doctors agree. But many critics are concerned that "most doctors are not adequately trained to accurately predict the health care needs of their patients in the future and then manage the use of health care services." Heidi Frey, president of the Patient Advocacy Coalition in Denver, said, "They are so excited about getting some element of control back that it causes them to be naive about how they will manage the risk and how much money they will need to treat their patient population." In response to the doctors' concern about low caps, PacifiCare said that payments may increase next year, as "premiums are set to go up between 5% and 10%" (Conklin, 8/9).