Competition between hospitals and medical groups is intensifying in California as capitation declines, according to a market report from the California HealthCare Foundation. "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, author of the report. With less demand for what has been one of their chief roles -- managing the care of patients enrolled in capitated health plans -- California doctors are ceding more power to health plans and hospitals. While total dollars available from employer premiums have increased, "hospitals have placed themselves higher on the proverbial food chain and have generally benefited more than medical groups," the report said. However, the negotiating power of both hospitals and physicians has been bolstered by another emerging trend -- limited capacity. In addition, variations in practice and performance have emerged as a key issue in payment systems, the report said. Download or order the report. -- by Michael Romano
Wane in capitation divides Calif. hospitals, docs
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