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." [...]

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