Critics of proposed Southern California doctor foundation wary of cost increases

Plans to create a foundation to pair southern California hospitals with doctors are being viewed with some skepticism by groups like the California Medical Association (CMA) and the California Association of Health Plans (CAHP) due to fears that such an idea would allow big health systems to drive up health costs. The idea, proposed by the Hospital Association of Southern California, would be to help smaller and mid-sized hospitals with their recruitment of doctors, and to centralize the administrative processes associated with billing and storing medical records, reports the Wall Street Journal

Both CMA CEO Dustin Corcoran and Donald Crane, CEO of the California Association of Physician Groups, have concerns over how such a group would affect costs. Further, Corcoran believes that the idea could wind up "control[ling] competition in a region" in a monopoly-esque fashion. 

Patrick Johnston, CEO of the CAHP, echoed Corcoran's sentiments, telling the WSJ that such a foundation could possibly create a "greater concentration of power that evidence shows will increase costs." 

However, Jim Barber, the Hospital Association's CEO, sees this as an opportunity to not only increase quality, but also to lend a hand to the little-guy facilities. Barber emphasized that, although the idea for centralized contracting was tossed around initially--something opponents feel would "amplify the hospitals' market leverage" as the number of doctors and hospitals involved increase-- it would not come to pass, in the short term, anyway. Barber instead insists that local doctor groups will strike their own separate deals with hospitals. 

At the outset, roughly 20 of the Hospital Association's 160 members would be likely to take the plunge, with 60 doctors the minimum number set for such a pool. Eventually, the plan could draw "several hundred physicians."

To learn more:
- read this Wall Street Journal article

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