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Managed-Care Reform

November 19, 2000

* "Ailing Doctor Groups in Critical Need of Remedy" [Nov. 5] was fairly comprehensive in its analysis but failed to mention several key components of the problems facing California's medical groups.

Capitation rates by commercial HMOs to medical groups for commercial patients in California are roughly half the rates found in the rest of the nation, and are only slightly higher than those paid by Medi-Cal HMOs for their managed-care patients. Is this reimbursement really what employers and their employees want for their care? Could this possibly be the main reason roughly 90% of California medical groups are in dire financial straits (according to California Medical Assn. estimates)?

Perhaps the biggest obstacle to managed-care reform is the lack of understanding patients have of managed care. Most of my patients, with whom I routinely answer all questions (both medical and bureaucratic in nature), have no concept of capitation whatsoever. Furthermore, most patients do not comprehend the difference between their health plan and their medical group, and they have no idea that the former subcontracts to the latter for their health care.

California's health plans are currently torn between satisfying their investors and supporting the medical groups that actually perform the care they claim to provide.


Chief of Dermatology

KPC Medical Group

Los Angeles


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