dr. solomon's dilemma






financial incentives

statistics and trends on risk-taking by doctors

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· Half the primary care doctors in the US are at some financial risk for the care they give.

· The top five states for doctors involved in risk-based contracts are: California, Arizona, Minnesota, Florida and Massachusetts.

· Though most medium-to large-size metropolitan area in the U.S. will have doctors who are capitated in risk-based contracts, rural areas, where there are fewer patients to form risk pools, often have doctors still being paid on a per-procedure basis (known as fee-for-service).

· In California, the state where risk-based, capitated contracts have the longest history, doctors receive monthly fees ranging between $35-$50 for each patient they see who is covered by a commercial plan. They must manage the total care of that patient for that amount. If a patient needs extensive care, that patient becomes a money-loser for the physician's practice.

· According to PriceWaterhouseCoopers, 10 percent of the medical groups in California are operating under Chapter 11 protection, while one-third of the medical groups are at or near bankruptcy. The cause: Doctors are not able to cover the operating costs of their practices based on the reimbursement rates of these risk arrangements.

· The number of patients doctors have in capitated, risk-bearing contracts varies from practice to practice. However, when as little as 25 percent of a doctor's patient pool is capitated, that provider will generally treat all patients as capitated, meaning he or she will become cost-conscious indiscriminate of the fact that many are covered by traditional indemnity health plans.




Sources:

Peter Boland
author of The Capitation Sourcebook.
Boland Health Care
1551 Solano Ave.
Second Floor
Berkeley, CA 94707

Albert Lowey-Ball
President of ALBA Inc., a Sacramento-based health care management consultant company.



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