During the initial period of my medical practice in California (1970-1980) the finances of running a medical practice seemed straight forward. In 1980 things began to change and by 1986 most physicians were bracing themselves for what seemed to be an Armageddon.
Looking at physical facilities for medical clinics and hospitals and the development of marketing techniques and continuing profitability of insurance companies and their stockholders, it became apparent who was suffering the most…providers and patients.
I had the opportunity to review financial reports from the California Health Care Foundation. I knew things were bad, but had no idea how bad it has become.
Beginning in 1999 until May 1, 2012 there were 260 medical groups that were closed due to financial failure and/or absorbed by another entity. 5,695,685 lives were effected by these group closures. NUMBER/PERCENT OF CLOSURES DUE TO FINANCIAL PROBLEMS 97/ 37.3%.
The CHCF report is 46 pages long and can be found amongst these other reports:
PDF File 1
PDF File 2
PDF File 3
ZIP File 4
PDF File 5
PDF File 6
PDF File 7
PDF File 8
PDF File 9
Approximately one in five Californians lost continuity of coverage, or moved to another group. The not so hidden legal costs are obvious and added to the legal tort fiasco. Other financial impacts are not accounted for by the inefficiency involved in transferring care to a new doctor or medical group.
Highlights for 2009 include:
- Health spending in California reached $230 billion, triple 1991 levels.
- California’s per-capita spending of $6,238, was the ninth lowest in the nation. By comparison, the US spending per capita was $6,815.
- Health spending accounted for 12.2% of California’s economy — a smaller share of the economy than most states or the nation.
- Hospital and physician services continued to account for the majority of spending, totaling 63%.
- Medicare and Medicaid accounted for nearly 40% of California health spending, up from 27% in 1991.
What will health information technology, health information exchanges, electronic health records, accountable care organizations, outcome studies, new ICD codes, elimination of procedural based reimbursement accomplish.
How will our system increase the number of primary care physicians.
All these issues face the current and next generation of health experts and physicians.