MD GROUPS: First CA, Now Denver — A Failure Trend?

      Medical groups in Denver have undergone a crisis in the past year, placing an immense financial strain on physicians, forcing patients to find new doctors and alarming experts who foresee Denver's story repeating itself around the country. In the past year, five Denver physician groups have gone broke, and about the same number are "on the brink of insolvency," the Dallas Morning News reports. Some hospital systems also have shuttered owned practices on which they couldn't make a consistent profit. Centura Health, for instance, will close all of its practices, which employ a total of 55 physicians, by the end of the year. Several physicians have moved away from Colorado or retired, while others have been forced to borrow money to keep their practices afloat. Some are working two or three jobs, filling in for other doctors; others are competing for positions with staff-model HMO Kaiser Permanente -- once disdained as a "haven for second-tier doctors." Patients are often left to find new doctors, and may experience delays in referrals to specialists or other needed care. Says one area doctor, "It was no longer the difference between a vacation in California and a vacation in Europe. It's the difference between macaroni and cheese and Hamburger Helper."

Causes, No Ready Solutions
      Denver's situation stems from a number of key factors, including an overabundance of doctors, low managed care reimbursement and a failure by physicians to work together, experts say. The oversupply component may be changing, however: The number of primary-care doctors in Denver has decreased 5.2% since 1997, while the population has increased 3.6%. The cohort of doctors older than 51 has shrunk most quickly, raising concerns about quality of care as experienced physicians explore other career options or simply retire. Combined with the situation in California, where according to a recent report 90% of physicians' groups are on the verge of bankruptcy, the scene in Denver has some experts fearing a nationwide crisis in the health care delivery system. In Dallas, for instance, 960-member Genesis Physicians Practice Association filed for bankruptcy in July -- an ominous sign when coupled with the closure of eight University Medical Group clinics the year before. But insurance executives, doctors and medical group administrators disagree on how to solve the problem. One official of a Denver physicians' group sums up what may be the chief point of agreement: "It is going to get worse before it gets better" (Ornstein, 10/31).