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More California physicians rejecting new HMO patients

In the state considered managed care's bellwether, more physicians are feeling empowered to limit themselves to PPO and cash-paying patients.

By Robert Kazel, amednews staff. Jan. 13, 2003.

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Fewer doctors are accepting HMO insurance coverage in California, the state that once was viewed as a vast laboratory of managed care innovation, a study said.

Just 58% of physicians in the state are accepting new HMO patients, according to the California Workforce Initiative's December 2002 report. And only 77% of office-based primary care doctors in the state had any HMO patients in 2001, compared with 80% five years earlier.

"In a state like California, that led the charge into managed care, the retreat really has now sounded for managed care," said Kevin Grumbach, MD, principal author of the CWI report, "California Physicians 2002: Practice and Perceptions," and director of research at the University of California, San Francisco, Center for the Health Professions.

Doctors in the state are feeling more empowered to exclude HMOs and limit their practices to patients willing to pay cash upfront or those from preferred provider organizations or point-of-service organizations, said Dr. Grumbach, an associate professor in the Dept. of Family and Community Medicine at UCSF. "Previously, doctors in solo, small offices got dragged kicking and screaming into HMOs because they saw it as an economic necessity."

The CWI report said that the "California model" of managed care, in which many private physician practices remain independent from insurers but are loosely linked to them through HMO contracts, is "unraveling," partly because fewer doctors are part of an independent practice association. Those associations traditionally were most closely aligned with HMO networks in California.

Less affluent people are tending to retain their HMO coverage and are having trouble finding doctors while upper-middle-class employees in group plans are opting for more flexible plans, frequently paying more out of pocket for care, Dr. Grumbach said.

Eighteen million Californians were enrolled in HMOs in 2002, or 51% of commercial insurance customers, according to a recent survey by the consulting firm Cattaneo & Stroud Inc., Burlingame, Calif. Nonetheless, that survey found that statewide HMO enrollment dipped slightly compared with 2001, as 16 of the 26 plans offering commercial HMO coverage in the state lost members.

The CWI survey reflects deep and growing dissatisfaction among California physicians, according to Jack Lewin, MD, CEO of the California Medical Assn. "The average solo doctor in California is severely distressed and is looking for a way out."

About 2,000 of the state's 55,000 doctors have dropped all managed care contracts, including PPOs, in the last couple of years, and Dr. Lewin said he expects that number to rise sharply.

Susan Pisano, spokeswoman for the Washington, D.C.-based American Assn. of Health Plans, said the findings of lower HMO participation among California doctors "doesn't square with what I know" about the traditional popularity of managed care in that state.

Bill Packer, spokesman for the California Assn. of Health Plans, said managed care continues to appeal to many patients and the notion that the state's managed care networks are unraveling is "a considerable exaggeration." But Packer acknowledged that PPOs, not HMOs, are now the plans that are showing growth.

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 ADDITIONAL INFORMATION: 

              1996  2001
              ----  ----
None           20%  23%
1% to 50%      47%  41%
More than 50%  33%  36%

              1998  2001
              ----  ----
None           23%  37%
1% to 50%      58%  49%
More than 50%  19%  13%