How Major Players Are Driving Regional Networks

healthcare copyFollowing implementation of the Affordable Care Act, large players are consolidating the control of hospitals and physician organizations in the San Francisco Bay area, according to a recent report by the California HealthCare Foundation (CHCF).

In a region with many segmented submarkets, major providers are expanding to manage care efficiently, serve more patients, and compete with Kaiser Permanente. The number of independent hospitals is shrinking as financial problems mount. Independent practice associations are seeking to diversify, raise capital, and keep private practice viable, especially for primary care physicians. Though none of the region’s remaining private safety-net hospitals appear threatened by imminent closure, several face an uncertain future. The safety net is strong, but faces capacity and access challenges resulting from Medi-Cal expansion. Safety net providers are particularly hampered by their limited ability to recruit and retain clinicians. For more information, visit

Hospital-Owned Physician Organizations Incur Higher Costs

Hospital-owned physician organizations had higher expenditures for professional, hospital, laboratory, pharmaceutical, and ancillary services for patients in commercial HMOs compared to for patients in physician-owned organizations. The study, published in the Journal of the American Medical Assn., was conducted from 2009 to 2012. Organizations owned by multi-hospital systems incurred 19.8% higher expenditures compated to physician-owned organizations. The largest physician organizations incurred 9.2% higher expenditures per patient than did the smallest organizations. Hospitals are rapidly acquiring medical groups and physician practices. This consolidation could foster cooperation and reduce expenditures. But it could also lead to higher expenditures through greater use of hospital-based ambulatory services and that fact that hospitals will have more pricing leverage against health insurers. Local hospital–owned physician organizations incurred 10.3% higher expenditures per patient than did physician-owned organizations. For more information, visit

Health Plan Report Card

The California Office of the Patient Advocate (OPA) is offering a health plan report card. Available in English, Spanish, and Chinese, the Report Cards allow consumers to compare the quality of care from the state’s 10 largest HMOs, six largest PPOs and more than 200 medical groups.  For more information, visit

Last Updated 12/01/2021

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