Site Visit

Site Visit to Southern California — Plans and Providers: Risk, Accountability, and Staying Power
November 17–20, 1998


Lisa Sprague, MBA & Sandra M. Foote


This site visit was the second of two focused on managed care operations and market dynamics in California, a state notable for high HMO market penetration and intense competition. In southern California, large physician groups and independent practice associations were highly visible and influential. They had assumed significant financial risk and care management responsibility for patients in HMO plans. The result was a distinctly different model of managed care than existed in other regions of the country. The visit included meetings with leaders from physician organizations and managed care organizations in San Diego and Orange counties, as well as an onsite session at the regional operations center of PacifiCare Health Systems to learn about its Secure Horizons program, the largest Medicare risk plan in the country. Topics included the roles of managed care organizations in this model, their relationships with providers, the ways the physician organizations paid their members and the effects of these compensation methods on clinical decision-making for HMO patients, quality management, and issues related to the transition of beneficiaries under federally funded programs (such as Medicare, Medicaid, and the Children's Health Insurance Program) from fee-for-service to HMO plans.

Related Materials

For details on participants' impressions, see the Site Visit Report.

See also "Managed Care: As Good As It Gets?" (Site Visit Report, January 2002) and "Physician Organizations Assuming Risk: Market and Policy Implications" (Issue Brief 727, November 1998).

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