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Practice administrators in Miami operate in one of the country’s largest and busiest managed care markets, characterized by high penetration, growing Medicare enrollment driven by a large population of retirees, and intense competition among plans and products.
Eighteen HMOs operate in South Florida, and nine in the Miami area are approved by the Health Care Financing Administration (HCFA) to serve Medicare beneficiaries. United Health Care Plans of Florida had the largest Medicare enrollment in Dade County (which includes Miami) at the end of 1996, with Humana Medical Plan in second place, according to the office of the Florida Insurance Commissioner. (See accompanying chart on p. 74.)
One and a half million people 37% of South Florida’s residents are in HMOs, reports Ken Berkowitz, a health care consultant with Towers, Perrin in Ft. Lauderdale. In Dade County, 37.3% of eligible Medicare beneficiaries are enrolled in managed care plans, second only to Broward County (41.6%), just to the north, according to HCFA.
Statewide, but particularly in South Florida, Medicare payments to HMOs "are so generous that premiums are nominal or even nonexistent, and benefits are among the richest in the country," says Berkowitz. Benefits often include "generous" prescription drug, dental, vision and hearing payments, he says.
"It’s a highly competitive, price-sensitive health care marketplace," declares Berkowitz. "There’s a large supply of physicians and an abundance of specialists. There’s a lot of merging of HMOs and a number of hospitals and integrated delivery systems all are competing for market share. Consolidation is a significant factor in this market."
In addition to its large retiree population, Miami’s health care market is influenced by a substantial Hispanic community. "Delivery systems for Hispanics tend to be more through medical groups than through individual practitioners, as you would find in most markets," says Stephen Jackson, president of Communique, the Mature Market Advisory, a New York City- and Los Angeles-based firm that advises HMOs and other medical organizations on marketing to the 55-plus community.
In the Hispanic community, "the extended family is very close and one family member usually decides where all family members will receive their care," adds Anne Desonier of Tampa, who chairs the Healthcare Financial Management Association’s managed care committee.
"That makes for some interesting situations because of capitation," she continues. "If a family member is assigned to a facility that is 50 miles from where the family patriarch has decided the family will go for its care, that family member will not go where assigned but will drive the 50 miles to the family’s facility.
"I found in analyzing claims down there that a lot of family members, no matter what health plan they are enrolled in or if they are capitated, what PHO they are assigned to will ignore that and go to the family’ hospital." She adds that there’s a trend in Miami toward more capitation.
"I see capitation looming," agrees Cynthia Mayes, practice administrator in Miami Children’s Cardiology, a private practice based at Miami Children’s Hospital. "It’s already happening in many specialties."
"I think capitation will be more restrictive," says Mayes. "If you are given X amount of dollars and you have one sick child and you have to send this patient out to a subspecialist or have cardiac or cardiovascular surgery, that can seriously affect your income."
For that and other reasons, physicians and practice administrators in Miami, as elsewhere, have mixed feelings about managed care. "Some physicians understand the concepts and benefits of managed care and some don’t," says Jackson.
"Managed care companies are in charge of medicine right now, but it’s been our experience that consumers are very unhappy with that," adds Mayes. "Patients show up at our window and we have to say to them, OK, you’re authorized to see us, but you can’t have any tests done here; you have to go to another facility or to a diagnostic center,’ and they are upset about that. They expect full service, then and there, and they’re not getting it and there’s nothing we can do about it."
There is general agreement on the prediction that the Miami managed care market will continue to grow. "There’s still a lot of room for growth," says Berkowitz.
"Within the Medicare population, we’ll see more and more people move into managed care," adds Jackson. "Managed care has shown its ability to cut costs and Medicare is going out of sight at the moment."