Medical groups in California are ceding more and more power to health plans and hospitals as a result of declining demand for what long has been their core role: managing the care of patients enrolled in capitated health plans.
The changing nature of this balance of power has led to fundamental changes in the relationships between the three key elements of the U.S. healthcare system, according to a new report from the California HealthCare Foundation.
While the total dollars available from employer premiums and provider payments have increased, the report said, "hospitals have placed themselves higher on the proverbial food chain and have generally benefited more than medical groups."
In addition to noting a decrease in those capitated patients for medical groups, the foundation's "California Health Care Market Report 2004" also shows that providers' negotiating power has been bolstered by another emerging trend: the limited capacity of hospitals and physicians. What's more, variations in practice and performance have emerged as a key issue in payment systems and the way patient safety is addressed, the report said.
"Hospitals and medical groups once were partners, but they are now more likely to be competitors whose economic interests are more in conflict than alignment," said Allan Baumgarten, the author of the report.