May Be Necessary Evil For Managed Care Age

The Foundation for Taxpayer and Consumer Rights issued tentative support for new California legislation (SB 2007) that drops anti-trust barriers to collective bargaining by physicians, but said that it would be preferable for the state to directly regulate the “capitated rates” paid by HMOs to physicians. Such a state-run prior-approval system is used by the Department of Insurance (under Proposition 103) in pre-approving all property casualty insurance premiums before they take effect.

“The dangers of price fixing by doctors are very real if anti-trust walls come down, but the imbalance of power between physicians and investor-owned HMOs demands more leverage for physicians in negotiating the rates they are paid,” said Jamie Court, FTCR’s advocacy director and co-author of Making A Killing: HMOs and the Threat To Your Health. “There is a very real link between the reimbursement rates paid doctors and the quality of care received by patients. This bill may be a necessity given today’s epidemic of physician group bankruptcies, but a far better approach would be to directly give the state the power to guarantee that all rates paid to doctors are sufficient to care for patients’ medical needs.”