Richman knows firsthand the pressures they face. His medical group, Lakeside Health Care, has struggled along with the rest of the industry to provide quality care while holding down costs. Last year his group pulled out of the town of Tarzana, where it was serving more than 11,000 patients, citing low reimbursement rates from HMOs. This kind of thing is becoming more common as medical groups retrench or go under. When it happens, patient care is disrupted as people often have to change doctors and travel farther to get what they need.
Doctors say HMOs have been squeezing too hard.
Richman says his group has been losing money on most of its privately insured patients. Without the higher payments they get from MediCare, he says, they'd be out of business. Their patients ranged from immigrants who lacked insurance and did not speak English to some longtime Valley residents who were quite wealthy. Richman arrives in the Capitol at a time when doctors are pushing the Legislature to intervene in their relationship with the health plans. HMOs pay medical groups.