Health Care Premiums in Sonoma County May Rise 15% Next Year
Health care premiums in Sonoma County may rise 15% next year, the largest increase in a decade, the Santa Rosa Press-Democrat reports. While the increases would be similar to those expected nationwide, health analysts say that the county's rising premiums are driven more by higher reimbursements to physician groups than by the increasing cost of medical services and prescription drugs, the factors most responsible for driving up health care costs around the country. The Press-Democrat reports that reimbursements in recent years have "been playing catch-up to rising treatment costs," which have led to the "collapse" of four medical groups in the county in the past three years and prompted many local doctors to exit managed care. Dr. Bob Schultz, Kaiser Permanente's medical director and president of the Sonoma County Medical Association, said that the rise in reimbursement rates is "designed to funnel more money to doctors and hospitals that have buckled under financial pressure." Some of the premium increases that members of the county's managed care companies will see include:
Health Plan of the Redwoods, with 80,000 members, will raise premiums an average of 15%.
- Kaiser Permanente, Sonoma County's largest HMO, with 123,000 members, will raise premiums 14%.
Health Net, with about 20,000 members, will raise premiums 13% to 14%.
PacifiCare, with about 12,000 members, "plans a 12% to 15% increase."
The Press-Democrat reports that the premium increases will be the largest seen in the county since 1988-1993, when they "ranged from 7% to 18% annually." Premiums in Sonoma County and California have trailed national averages over the past five years, but the 2002 increases "should put" them in line. As a result, employers will likely increase employees' cost-sharing so they can "shoulder more of the burden" (Rose, Santa Rosa Press-Democrat, 9/30).
The "gospel of managed care" -- emphasizing preventive care and focusing treatments toward primary care physicians and away from emergency rooms and specialists to hold down costs -- has been proven false by recent double-digit premium increases, a Press-Democrat editorial says. While managed care "worked" for a "while," the editorial says its "shortfalls" in recent years "have become apparent": many patients are unwilling to diet and exercise; "doctors argue that the referral system" places control over medical decisions in the hands of insurers; and the rising costs of prescription drugs is "largely out of the HMOs' control." Furthermore, the editorial says that the "years of flat or declining premiums" seen in the 1990s "make it financially difficult for doctors to accept poor people as patients." The editorial concludes that while the expected rate increase is "necessary to address the immediate crisis, the real question is whether a cash infusion is enough to fix a system built on faulty assumptions" (Santa Rosa Press-Democrat, 10/1).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.