San Francisco insurance confusion

October 2, 2009 8:16 PM

What's the deal with the Brown and Toland vs. Hill Physicians division in San Francisco medical care? Why must San Franciscans with HMOs be referred to specialists who not only accept your insurance plan, but are also part of the same medical group as the referring doctor?

I've always found the demarcation of Brown and Toland vs. Hill Physicians doctors in San Francisco to be strange. Having to go to specialists who not only accept your insurance but who are also part of a specific medical group is certainly inconvenient and problematic for patients, and it doesn't seem to be so great for the doctors, either.

Is there a reason San Francisco medical care is divided into these sub-groups? Does this actually benefit anyone to add an additional layer of middlemen? Is it like this elsewhere? I can't recall experiencing this anywhere else, and Googling doesn't seem to help explain the origins of these groups.

Thanks!

posted by eschatfische to health & fitness (4 comments total)

Previously
posted by jchaw at 9:26 PM on October 2

jchaw, this is intended as a follow-up question to the question you linked to. That question was about a specific hospital's change in medical group affiliation, while this question is about why San Franciscans with HMOs have to deal with these medical groups in general instead of just their insurance companies.
posted by eschatfische at 9:38 PM on October 2

This sort of thing is pretty common with HMOs. In San Jose the 2 big ones are San Jose Medical Group (SJMG) and Santa Clara County something-something Association (SCCIPA). There are others as well (Palo Alto Medical Group, El Camino Medical Group, etc). The deal is, the local group tells Blue Cross or Healthnet or Aetna or whoever that they can cover your medical care cheaper via these groups.

The simple explanation is:
Lets say, for example, 28-year-old single non-smoking males cost Healthnet $1000 a year, and Sub-group (SG) treats that male for $800, SG gets to keep the extra $200. Main insurance company likes the SG system because they don't have to do anything but collect premiums. They don't have to have huge departments dedicated to receiving claims and sending out individual checks to various doctors. They send one big check to SG and that's it.

SG can treat the patients cheaper because all the doctors in their network are contractually obligated to take what SG pays them for care. The doctor benefits by having a patient pool that can't elect to go to anyone else, and really they don't have much choice- HMOs are cheaper for employers so more patients have them. Primary Care Physicians (PCPs) in the SG systemare under pressure not to send patients to more expensive specialists, so the PCPs are forced to treat conditions that may be outside of their expertise. Specialists don't care for SGs because of lower reimbursement and lots of red tape for specialized care.

SG's will tell you that the advantage of the SG system is localized care. If you have a question you don't call Healthnet's 800 number and sit on hold for 3 hours, you call the local SG number (and only sit on hold for 2). It's a weird, confusing system, but I doubt it's going anywhere soon. The best way (IMO) for a patient to choose a SG is to look for ones that have real, practicing physicans on the board of directors, especially if those physicians are a mix of PCPs and specailists. They understand more than a business administrator what needs to be done for patient care, and they tend to be a bit more lenient with approvals for care.
posted by dogmom at 10:34 PM on October 2 [2 favorites]

Yes, dogmom is right, the whole point of these "middlemen" is to shift the financial risk for patient's care from the insurance company to the doctors who care for the patients instead. This has its benefits and drawbacks.

The typical critique of insurance companies retaining 100% of the risk is that providers (not only doctors but hospitals and everyone else) have an incentive to provide as much care as possible under a system where they get paid for each procedure performed, without necessarily paying a lot of attention to whether a particular procedure is "worth" the cost. Insurance companies then have to try to restrain medical costs--which have been rising at around 8% - 10% per year for the past few decades, forcing more and more people to drop coverage as it gets more and more expensive--in really heavy-handed ways (requiring pre-authorization for medication or surgeries, paying very low reimbursement rates to doctors so their networks are really small, etc) that their customers generally hate. These heavy-handed ways are also not terribly clinically effective--they tend to hold down use of medical care overall, not just the stuff that one might argue is of marginal benefit to a patient.

Insurance companies sharing some of the risk with provider groups is meant to "align incentives" for care: doctors aren't paid more for doing more (as they would be if they had nothing at risk and merely got paid for each thing they did), they're paid more when patients use less care. Of course, there's two ways for patients to use less care; one is that docs follow all the evidence-based practice recommendations (example: don't prescribe antibiotics for colds), make sure everyone is staying healthy by really staying on top of chronic diseases (example: foot exams for diabetics every year, to catch problems before they require amputation), and not recommending treatments that don't have a lot of scientific evidence backing usefulness (example: prescribing physical therapy instead of back surgery for lower back pain, because back surgery has been shown to be no better than cheaper alternatives). The other is to make it a big pain in the ass to seek care.

In terms of whether you see this elsewhere: it's definitely becoming more prevalent nationally. However it's really limited to places where there's enough population density that you can have a physician group with enough specialists to provide all or most of the care that individuals need (so maybe not so much in Nebraska or Iowa).
posted by iminurmefi at 10:07 AM on October 3