SAN DIEGO: Health Care Market ‘Alive and Well’

      Focusing on one of the nation's "most progressive" health care markets, global rating agency Duff & Phelps Credit Rating Co. says in its latest analysis of the major health care markets that San Diego is several years ahead of other markets and may provide a glimpse of what the future of health care looks like. According to the report, the rapid growth of managed care and intense HMO price competition in the area has spurred consolidation among hospital s and HMOs, creating very low inpatient utilization rates, aggressive use of capitation, low premiums and increasing integration among providers. As San Diego hospitals attempted to keep pace with the rapid growth of managed care they encountered periods of "significant financial stress," but "survived the shakeout" and emerged "leaner and more economically and operational efficient," according to the report. Further consolidation among San Diego providers is unlikely, but if additional consolidation does occur, the most likely contestant to "purse a formal strategic partner" is UCSD Medical Center, "which remains hampered by the higher costs inherent to academic medical centers" (release, study text, 3/25). To access the full-text of "San Diego Health Care: Alive and Well," visit DRC's Web site at www.dcrco.com.