MANAGED CARE: Doctors Head Back to Fee-for-Service Plans
Many California doctors, contending that "managed care is a raw deal for them and their patients," are leaving the HMO market and returning to traditional fee-for-service medicine, the Business Journal of San Jose reports. A undetermined but growing number of Los Angeles physicians have switched their practices back to the fee-for-service model, in which patients pay up front and then get reimbursed through their insurer, a process that often relieves the physician from the billing process. Dr. Faith Carlin, who has dropped all but one HMO contract, said, "Reimbursement has dropped 35% since 1992, and all of my expenses keep going up. I'm reviewing all of my PPO contracts and will start weeding out the poorly paid ones. I will never sign another HMO contract." Dr. Thomas LeGrelius withdrew from his last HMO contract one year ago and now is the president of the not-for-profit Independent Doctors Traditional Practice Association, where 110 participating doctors have "vowed to drop their managed care affiliations and cooperate with one another." Similar groups have emerged around the state in Sacramento, Orange County and San Diego, as well as in Florida, Michigan, Minnesota, South Dakota and New York. LeGrelius said that moving out of the HMO market "freed" him, adding, "I'm immediately ready to resign from any PPO that jerks me around." Bob Redling, spokesperson for the Medical Group Management Association, a professional group of medical practice administrators, said the trend of doctors joining nonmanaged care groups is "not big yet, but it is ... certainly something to keep an eye on." He added, "The trend in the past has tended to involve the smaller practices that are below the radar of a national group like us. These are the kind of doctors who don't tend to join large groups."
Patients Also Move Away from HMOs
At the same time, an increasing number of patients are willing to pay more money for "less-restrictive coverage" and are moving away from HMOs. Michael Chee, spokesperson for Wellpoint Health Networks Inc., said, "Consumers want the biggest bang for their buck, and in this day and age that bang is in being able to go wherever they want in the health care system. People want the lowest monthly premium, but they're willing to fork out a little bit more to have that flexibility." As an example of this trend, 75% of Blue Cross business is non-HMO, and more Blue Cross patients are opting for more expensive, catastrophic coverage (Shepard, Business Journal of San Jose, 7/31).