October 1999 Bulletin

CMA: Physician groups in trouble

The California Medical Association (CMA) has counted 115 bankruptcies or closures of physician groups since 1996 and is warning that up to 80 percent of the remaining 320 medical groups in the state are in serious trouble.

Fifteen groups have gone under so far in 1999 and at least two dozen are expected to go out of business by the end of the year, according to CMA. Some groups are losing as much as $500,000 a month.

A report by PricewaterhouseCoopers, an actuarial firm, shows that even as the cost of living and health care costs rose steadily throughout the 1990s, the amount of money paid by health plans to physician groups to take care of patients dropped from a high of $45 per patient per month in the period of 1990-1993 to a low of $29 from 1997 to 1999.


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