MEDICARE HMOs: Santa Barbara Health Authority May Launch Own Plan
Concerned by the exodus of Medicare HMO plans in surrounding areas, the Santa Barbara Regional Health Authority is looking into administering its own Medicare health plan, the Santa Barbara News-Press reports. David Lamkin, the Health Authority's executive director, said, "A permanent and nonprofit Medicare HMO run by the Health Authority could help stabilize a local senior health insurance market otherwise susceptible to a disruptive exodus of for-profit plans." The Health Authority -- a nonprofit independent government agency -- was formed in 1983 to provide a managed health plan for county Medi-Cal beneficiaries. The agency has formed an ad hoc committee to investigate implementing a Medicare HMO, and has hired the consulting firm Deloitte & Touche to prepare a feasibility study. Among the possible implementation scenarios outlined by the firm are restricting a plan to only the county's 20,000 Medicare HMO beneficiaries, or to also include beneficiaries in San Luis Obispo County, who have been "particularly hard hit by Medicare managed care withdrawals in recent years." Either option would require the agency "to rewrite portions of its state health plan licenses and also contract" with HCFA. Lamkin also said administrative startup costs would be "significant," requiring the county to tap into its $20 million in reserves (Schultz, 10/1).
More Local Medicare HMO News
Cottage Health System, which administers the three Cottage hospitals in Santa Barbara, has announced that it will no longer contract with HMOs that "do not cover the full costs of treating HMO patients," in an effort to curb millions of dollars in annual losses. The not-for-profit Santa Barbara, Goleta Valley and Santa Ynez Cottage hospitals will lose nearly $20 million in 1999, on top of $13 million lost last year. Dr. Robert Reid, Cottage medical affairs director, said that of "the $20 million [in loses] $7 million is because of senior Medicare HMOs" (Schultz, Santa Barbara News-Press, 10/2).