EL DORADO COUNTY: Managed Care in Jeopardy After Physician Groups Fold
The recent liquidation of the physician group El Dorado Medical Associates and the announced closing of the Marshall-El Dorado Physician Hospital Organization has left El Dorado County with a "murky" future in managed care, the Sacramento Business Journal reports. El Dorado Medical Associates, an independent practice association, "abruptly" shut its doors last month after learning that it had amassed a $1.5 million debt this year. Marshall-El Dorado PHO, which Marshall Hospital and El Dorado doctors established to negotiate "joint contracts with health plans," has said it will close by the end of the year. The Marhall-El Dorado PHO had negotiated contracts to provide hospital care and physicians' visits for more than 10,000 area members of two health plans, PacifiCare and Western Health Advantage. Now, both plans are attempting to sign individual contracts with El Dorado Medical Associates' former doctors, but "they'll need to put together a complete medical network to do it," the Sacramento Business Journal reports. Complicating the issue, Marshall hospital is concerned that new deals between doctors and HMOs will "pressure the hospital to accept flat rates for any care the hospital provides." But precluding HMO patients from treatment would also hurt the hospital's business. PacifiCare will pay physicians on a "discount fee-for-service basis" until the end of the year and hopes Marshall will accept capitation payments. However, Marshall said last week that it will not accept managed care rates through Dec. 31 unless the "health plans place [an] incentive on physicians to control hospital costs," something the hospital fears will not occur under a fee-for-service payment system. Despite the plans' efforts to recruit doctors, it is "unclear" how many will sign contracts for next year. Dr. Gary Cutter, chief of staff at Marshall and former El Dorado Medical Associates board member, said, "It may be a tough sell to specialists, and the majority of the physicians in the IPA are specialists." He added that most specialists had "huge ethical problems" accepting capitation because they "believe it encourages doctors to scrimp on care" (Robertson, Sacramento Business Journal, 10/9).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.