DOCTOR GROUPS: Left Behind by HMO Reform
A Los Angeles Times news analysis Sunday reported that while the Legislature has tackled HMO reform with gusto, "little attention [has been] paid to the network of doctor groups that form the backbone of the state's HMO system." Within two years, the Times reports, physician organizations will cease to exist or undergo dramatic changes, "squashed under a combination of poor management and inadequate payments from health plans." The trend has already forced 115 physician groups to declare bankruptcy or go out of business. These altered doctor groups will force consumers to "experience changes in the way they access care" and to pay more for services. But, instead of focusing on doctor group solvency, the Legislature concentrated upon "requiring the health plans and medical groups to provide more services." The "minimal financial regulations" the state Legislature did agree on "are not expected to be enough to stem the tide of bankruptcies that is looming, potentially leaving hundreds of thousands of Californians in a no-man's land as their doctors struggle to reorganize."
Grading System Altered
To win Gov. Gray Davis' approval, State Sen. Jackie Speier (D- Daly City) had to omit several key provisions of the solvency requirement that would have set up a public grading system for physician groups. Speier argued that a properly executed grading system would have allowed consumers to check "the health" of their medical groups, prompting health insurance companies who were fearful of a backlash to offer larger monthly payments to medical groups.
Experts like Peter Kongstvedt, a health-care consultant with Deloitte & Touche in Washington, DC, are predicting that some large physician groups will dissolve altogether or restructure themselves to offer doctors "economies of scale in purchasing supplies and added clout when negotiating with health plans." But these groups would no longer serve as "middlemen," who pay for all aspects of patient care out from a portion of a patients' premium. Some groups will be paid a fee every time a doctor sees a patient, while others might only be paid for primary-care visits, but not visits to specialists. Doctors also might contract directly with health plans, forgoing medical groups. In either case, the Times notes, premiums will have to increase to keep troubled groups afloat (Bernstein, 9/12).