Health Plans and Physician Organizations in California: Mutual Dependence or Mutually Assured Destruction?
California HealthCare Foundation
October 2001
By James C. Robinson, Ph.D., Professor of Health Economics, School of Public Health, University of California, Berkeley
"Implications for the California Experiment"
"The HMO product in California shows the signs of serious financial, intellectual, and managerial underinvestment. Instability among physician organizations, disaffection among practicing physicians, dissatisfaction among enrollees, and regulatory enthusiasm among politicians reflect a long and serious neglect of organizational relationships. The contemporary skepticism and antipathy presage mutually assured destruction if a sense of partnership cannot be renewed. If the financial instability of the medical groups leads to widespread bankruptcies, the health plans will shift to PPO products and rely on consumer cost-sharing rather than provider integration to control cost growth. Similarly, if the contemporary enthusiasm among purchasers for open-access products leads to a renunciation by health plans of capitation and medical management, most medical groups and all the IPAs will fragment into their component physician practices. Either way, the California experiment with physician organization as the heart of the health care system will have come to an end."
For the full report: <http://admin.chcf.org/documents/chcf/SolvencyRobinsonArticle.pdf>http://admin.chcf.org/documents/chcf/SolvencyRobinsonArticle.pdf
Comment: These are not hypotheticals, as Professor Robinson seems to imply. This process is well underway now. But Professor Robinson apparently has telegraphed his true opinion by the topic he has selected for the forthcoming Leadership Academy of the California Medical Association. His topic? "The End of Managed Care."