PHYSICIAN GROUPS: Two More Bay Area Groups Struck by ‘IPA Flu’
Two South Bay independent practice associations -- Foster City- based Santa Clara IPA and Mountain View-based Family Medical Clinic -- are set to pull out of the area, marking the most recent casualties of the " IPA flu," the San Francisco Business Times reports. SCIPA has canceled all contracts with HMOs in the northern part of Santa Clara County and will "focus its efforts farther south," while FMC will close its 125-doctor, 22,000-member organization by the end of the year. FMC, which has doctors located in Palo Alto, Menlo Park and Sunnyvale, is the latest in a series of nearly a dozen failed Bay Area IPAs, most recently San Francisco IPA and San Mateo IPA, both of which shut down within the past few months. SCIPA, meanwhile, has "scrapped" contracts with Blue Cross of California, Aetna U.S. Healthcare, Blue Shield of California, Prudential and Cigna. The two pullbacks will mean that 29,000 patients will either have to switch doctors to stay with their HMO or change to a PPO or indemnity plan to stay with their doctors. SCIPA CEO Dr. Larry Bonham said, "These cancellations are not part of a renegotiation strategy with any of these health plans. It's an exit strategy." He added, "There is a lack of an adequate specialty network around Mountain Valley's El Camino Hospital. We can't negotiate contracts there that the budget will allow." High real estate prices have also made it difficult for both IPA groups to eke out a profit in the mid-Peninsula. FMC CEO Doug McNeil said, "It turns out that in terms of the capitation payments made to our group, we could never be profitable at payment levels that would be acceptable to the physicians" (Doherty, San Francisco Business Times, 10/11).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.