California Physician Group Solvency Standards

Publication Date: August 2002

Publisher: California HealthCare Foundation

Author(s): Christopher Ohman; Paul Gertler

Research Area: Health

Type: Report

Coverage: California

Abstract:

Over the past 20 years, California has led the nation in developing a health care model that delegates financial risk to providers, particularly physician groups, for professional services or professional services and facility services combined. Yet, the delegated model in California has faced significant financial challenges in recent years. In 1999, SB 260 was put in place to establish standards that would identify and prevent provider group insolvency. These standards have been unsuccessful at forecasting a significant number of group failures. This report was designed to provide greater insight into these failures and to suggest new standards that will serve as better predictors. The research also estimates the cost of these problems for the state of California and identifies which provider group characteristics are associated with better performance.