HMO NEGOTIATIONS: St. Joseph Joins Health Systems Playing Hardball
The Orange County Register reports that local health care providers are "in a risky stare-down with managed care health plans" that could result in higher reimbursement rates but may also cause "huge patient upheavals." The St. Joseph Health System, in negotiations with "at least two sizable" HMOs, has followed the lead of the San Mateo County IPA and Sutter Health, which took hardline stances with Aetna U.S. Healthcare and Blue Cross of California, respectively. Those contract disputes took different paths: Blue Cross "reportedly coughed up, although figures were never disclosed," while the San Mateo-Aetna standoff has yet to be resolved. According to an unnamed St. Joseph official, the ploy was successful: the "threat helped wring reimbursement increases out of HMOs for the first time in several years."
The Register reports that many local health care providers feel it's "only a matter of time before Orange County faces" a crisis when HMOs and providers cannot reach an agreement and patients lose access to their doctors. Monarch HealthCare President Dr. Bart Asner said, "We can't perform services at the rates that some health plans, and employers, are willing to pay. Medical groups have been running things at a loss -- and that is unsustainable." Managed care officials counter that companies' poor management -- as seen in the FPA Medical Management debacle -- is to blame for the providers' financial woes. PacifiCare Health Systems spokesperson Ben Singer said, "Some medical groups have gone out and aggressively bought and expanded, and in the process lost money because they didn't do a good job integrating." Amidst all the blame-laying, some physicians feel caught in the middle. Dr. James Strebig, who received a warning letter from Prudential HealthCare when St. Joseph was in negotiations last year, said, "St. Joseph almost lost Prudential, playing hardball with them. If they get more out of them, then that's great -- but I just want to take care of my patients without worrying about all this" (Crabtree, 2/8).