San Diego County Medical Society Grapples with Capitation
The San Diego County Medical Society wants to "reduce or eliminate" the capitated payment model, saying "it provides an incentive to provide less care," the San Diego Union-Tribune reports. The medical society, which represents 40% of the county's practicing doctors, has included the suggestion in its "broad blueprint" for improving the region's health care. Under capitation, health plans pay doctors set amounts each month to provide patient care, and physicians "assume financial risk beyond that." The Union-Tribune reports that the risk "can be huge" for doctors because monthly payments are unaffected by the amount of care required by patients, and the cost of treating one very sick patient "can bankrupt a provider." The California Medical Association in 1999 reported that low monthly payments put nearly 90% of physician groups in the state "in danger" of bankruptcy or closure. Hospitals have been "leaders" in turning away capitated contracts, the Union-Tribune reports. The Scripps hospital system now "routinely insists" on fee-for-service contracts. However, among many medical groups, capitation is the "preferred way of doing business," and some predict that the "classic" capitated managed care model could regain popularity as the economy slows and employers look for ways to save money (Fong, San Diego Union-Tribune, 4/18).
Meanwhile, pharmacists across the state also are "voicing similar frustrations" with the fee system, the Union-Tribune reports. As drug costs continue to rise, pharmacists say reimbursements have steadily declined for years. They say part of the problem is the increasing use of pharmacy benefits managers. To contain costs, more employer groups and health plans are turning to PBMs, which "negotiate discounts with drug manufacturers and establish networks of pharmacies for their customers." However, some pharmacists say PBMs do not "understand their business" and do not "take into account the services pharmacies provide to consumers, such as explaining drug interaction or proper dosage." The San Diego Pharmacy Alliance has "discourag[ed]" its members from accepting low-paying contracts from some PBMs, but pharmacists say that "rejecting them is no better" because a competing pharmacy could take up the offer and draw business away (Fong, San Diego Union-Tribune, 4/18).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.