PROVIDER-SPONSORED ORGANIZATIONS: Santa Clara Group Applies For License
The Santa Clara County Individual Practice Association plans to file this month for "a limited Knox-Keene license -- the credential that allows companies to operate" HMOs. The license won't permit SCCIPA "to sell an HMO product directly to consumers," the San Jose Business Journal reports. But SCCIPA President Dr. Larry Bonham said "it may be the initial step toward becoming a physician-sponsored organization." The Journal notes that PSOs, or groups that allow physicians and hospitals to contract directly with Medicare, "represent the newest form of managed care plan, and SCCIPA's would be the first in the South Bay" area. Many providers want "to get a share of the lucrative Medicare business," the Journal reports.
But others are not so optimistic about PSOs, the Journal notes. U.S. Rep. Pete Stark (D-CA) "is concerned that patient care could suffer under PSOs, as doctors would wear the dual hats of health care provider and payer," according to a Stark spokesperson. The staffer, who wished to remain anonymous, said, "Our concern will be how well beneficiaries do under this form of care, (and) if there's any evidence of a drop in utilization of services." Others criticize PSOs because they are doubtful "whether PSOs can stay financially afloat." James Robinson, a professor at the University of California's Berkeley School of Public Health called PSOs "an excellent opportunity for providers to lose money." Earlier this year, the Journal notes, the California Medical Association's health plan filed for bankruptcy. But PSO supporters say doctors can give better care than "HMO middlemen" (Delevett, 3/10 issue).