Published: 05 July 2001
Analyst(s): Patrick J. C. Powers
Management Summary Albuquerque's healthcare providers and payer organizations are struggling to provide better healthcare with fewer resources for an economically and ethnically mixed population. Local industry observers argue that the entire state of New Mexico is experiencing more difficulty than most other states in its efforts to absorb the local consequences of a national crisis in healthcare reimbursement and quality. Abuquerque's healthcare providers, three of which market high-cost Medicare managed-care products, spent 2000 seeking ways to be more cost efficient to avoid a recurrence of the massive deficits the local hospital systems incurred in 1999. Although most of the area's leading hospitals finished 2000 in the black, local industry observers acknowledge that Albuquerque's hospitals must realize at least 5 percent net profit margins on an annual basis to do better disease management, improve the quality of local healthcare and lower the incidence of medical errors. Albuquerque's providers and payer organizations are also struggling to maintain cost-effective statewide healthcare networks that win patient loyalty by providing rural healthcare and basic medical services for New Mexico's uninsured population, which constitutes approximately 25 percent of the state's residents. Currently, New Mexico has a nursing shortage, with more than 350 openings in Albuquerque remaining unfilled as of April 2001. As well, industry observers report that the state is losing physicians at a high rate, even while the state's population grows with retirees who flock to Albuquerque's warm climate. They attribute the loss of physicians to the low reimbursement rates from federal, state and commercial payer organizations, as well as to the state's reluctance to reform the payment rates for Salud!, the state's Medicaid managed-care program. Also, many physicians complain because New Mexico is only one of two states (along with Hawaii) that charges physicians a gross...
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