Blue Cross Leading HMO Campaign To Destroy California Medical Groups, CEO of University Affiliates IPA Charges.

Health/Medical Writers

ALHAMBRA, Calif.--(BUSINESS WIRE)--April 8, 2002

Blue Cross and other HMOs are attempting to destroy California medical groups so they can dictate terms to individual physicians and achieve de facto control of the state's healthcare system, the CEO of a major Southern California medical group charged today.

"Blue Cross and other HMOs are systematically attacking California medical groups with tactics that include under-funding patient care, manipulating enrollment/eligibility rolls and deliberately delaying payments," said Dr. Sam J.W. Romeo, a nationally-known healthcare figure who is president and chief executive officer of the non-profit University Affiliates IPA, Inc.

"Their intent is clear: destroy California medical groups so they can continue funneling premium dollars into the pockets of their well-heeled executives and institutional shareholders. Their campaign is succeeding. Medical groups are going under and patients and their physicians are taking a back seat to profits, obscene salaries and ill-gotten executive perks."

More than 23 cents of every premium dollar Blue Cross collects goes not to patient care but to excessive administrative expenses and profits, Dr. Romeo noted, citing a recently released California Medical Association report summarizing the financial operations of California HMOs.

"The numbers show that Blue Cross, California's largest for-profit HMO, is also one of the worst offenders when it comes to spending the least amount possible on patient care," Dr. Romeo said. "And, as the CMA notes, the profits of the largest health plans together could pay for health coverage of all the uninsured people in California."

Dr. Romeo called on state legislators and the Department of Managed Health Care (DMHC) to act before California's physician community and health care system are irreparably damaged.

"If our regulators and representatives don't stand up to the HMOs, California's already-tottering health care system is going to crash," he said. "It's time for those in power to enforce laws such as SB 260 and the Knox Keene Act and to hold hearings on the destructive practices of HMOs."

University Affiliates is one of Southern California largest medical groups and currently serves about 105,000 patients in Los Angeles and Orange counties. A non-profit, mutual benefit organization, University Affiliates has about 2,500 member physicians and is the nation's first fully-accredited IPA (Independent Physicians' Association). Dr. Romeo, who began practicing medicine in 1969, was named Physician Executive of the Year in 1998 by the American College of Medical Practice Executives.