Calif. county firms studying insurance woes

Employers in the San Jose area are convening to discuss soaring premiums, low reimbursement rates and a shortage of physicians.

By Julie A. Jacob, amednews staff. Sept. 3, 2001.

More than 300 employers in the San Jose, Calif., area, along with representatives of the Santa Clara County Medical Assn. and managed care companies, were planning to meet at the end of August to discuss a countywide health insurance crisis caused by spiraling health care premiums and a looming shortage of physicians in Santa Clara County.

Health care premiums for employers in the region are rising from 10% to 40%, said Peter Kuhn, a principal for IBP Insurance Services, an employee benefits brokerage firm in San Jose that planned the conference.

At the same time health insurance premiums are skyrocketing, employees are complaining that their physicians are dropping out of their health plan networks, forcing them to switch physicians, Kuhn said.

"Doctors are leaving the networks ... patients are experiencing physician disruption," Kuhn said. "It's very disturbing to employers."

Doctors are dropping out of managed care plans because they can't make a living on what they are paid from the insurers, said Donald Prolo, MD, a neurosurgeon in San Jose.

"Reimbursements are abysmal," said Dr. Prolo, who said he recently had terminated all of his managed care contracts except one. "There is a tremendous wave of physicians dropping out of managed care."

A survey last February of Santa Clara County Medical Society members revealed that about 60% of physicians in the area planned to retire, move out of Santa Clara County or seek a non-patient-care position within the next three years, Dr. Prolo said.

In addition, 98% of physicians who responded to the survey said they thought reimbursement levels were limiting their ability to care for patients, he said.

Medical groups are also having a difficult time recruiting new physicians to the area, Dr. Prolo said, because of low reimbursement and high cost of living. Eighty-five percent of physicians surveyed said they had been having problems recruiting new physicians to their practices, he said.

All of those issues were scheduled to be addressed at the conference, Kuhn said. Speakers were scheduled to include representatives from Aetna, Lifeguard, the Santa Clara County IPA and the Santa Clara County Medical Society, he said.

He added that he expected the meeting to be the first of many discussions on soaring premiums and a physician shortage. "It's a good place to start, but this is an issue that will be around for a while," Kuhn said.

For a transcript of the conference proceedings, contact Debbie Zervoudakis at IBP Insurance Services, (408) 414-0132, or by e-mail (debbie@ibpis.com).