Pleasanton IPA to Shut Down Dec. 31
Pacific Health Care Systems, one of the Bay Area's "largest remaining" independent practice associations and the sole IPA in the Pleasanton area, will shut down its operations on Dec. 31, "send[ing] its 30,000 patients to either new doctors or new health plans," the San Francisco Business Times reports. Attributing its "failure" to an inability to win higher capitation rates from managed care organizations, PHC announced recently that it has begun to "dissolv[e]" its contractual relationships with MCOs and will not renew any agreements, "effectively terminat[ing]" the practice. PHC's 400 doctors are "hoping" that their patients will remain with them by moving out of their HMO plan to either point of service or preferred provider option plans. They also are hoping that area HMOs "will want to reconstruct a network" by contracting directly with the physicians. The Business Times reports that the shutdown of PHC is the "latest in a string of failures" among IPAs. Wanda Jones, a San Francisco hospital consultant, said: "IPAs inherently are frail. They take physicians where they are, and they attempt to do contracting, but they don't do anything to change the way physicians practice. The managed care world is unforgiving, and it's quite easy to find that you have the wrong mix of doctors" (Doherty, San Francisco Business Journal, 11/9).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.