December 1, 2001


What's a Patient to do?

Knee Surgery Deaths

Doctor's Receive Incentive to Do Things Right


HMO & Global Rates

Malpractice Rates

S. California IPA drops 35 OBs

FDA Warns a Doctor's Patients

I Love My Plan

How Physicians may Make More Money

What's a Patient to do?

As everyone knows there is almost never an agreement between a MCO and the provider until the last minute or even after that.  The California Governor called for legislation to ensure continued coverage when these disputes make the patients lose coverage.  The problem is the legislators can not get it right.  Currently those in their last trimester of pregnancy or who have serious diseases such as AIDS or cancer can continue to see their physicians and the MCO must pay for that care.  The others need to find other physicians. Governor Davis is backing a bill by Democrat Thomson that would require a physician to continue to treat a patient for up to one year without a contract.  The bill does not state who will pay for that care.  A suggestion is payment at the old rates plus an medical cost inflation factor.   

Health Net and Sutter have to no one's surprise agreed to terms for two years.  Health Net is now attempting to work out the details with the John Muir/Mt. Diablo System and the two John Muir medical groups.                Top

Knee Surgery Deaths

Minnesota has had three deaths following elective knee surgery at different hospitals.  Two had total knees and the third a cartilage graft.  All knee surgery was been cancelled in the state until the cause can be determined.  The first patient was embalmed so no tissue samples could be obtained.   The other two have had tissue obtained and one had clostridium in his blood.  The medications used on the patients are also being tested.   After one week the moratorium was lifted without a resolution as to the cause of the problem.  Some patients have decided to postpone their elective surgery.                                     Top

Doctor's Receive Incentive's to Do Things Right

Florida employers are giving financial incentives to physicians who are highly rated by their patients and meet quality standards (read cost).  The employers have asked the notorious Millman USA (they had to change their name after the law suits) to figure out the rewards.  This may be part of a trend since New York Hospitals are part of an award system as well to use electronic prescriptions and also have intensivists.  It used to be those who practiced the best medicine were rewarded by having a better reputation and more referrals.                          Top


Who need HMOs? Marshall Hospital in California stopped all capitated managed care contracts and gone from a loss of $21 million in four years to a net income of $4.5 million for this fiscal year.  The LIPs that use Marshall had some problem at first but are now coming back as well.  A PacifiCare spokesperson said she understood Marshall's reluctance to deal with her organization since Marshall made more money off a regular Medicare patient than one from her organization.  Since the breakup of the PHO and the loss of PacifiCare about 85% of the patients have returned to traditional Medicare.  

San Luis Obispo, California 92 bed General Hospital, the hospital of last resort, has been given an ultimatum.  They have too many empty beds and are losing money.  They need to cut costs $5.5 million in six months or may be forced to close.  If the hospital closes the Board of Supervisors may go to a clinic system and allow the patients to be absorbed into the private hospitals.  The hospital is attempting to turn itself around by bringing in new administration.  The tough new administration has cost the hospital physicians and nurses.  The hospital is also facing lawsuits from terminated physicians.  

Down the road in Los Angeles two non-profit hospitals were purchased by Tenet.  As part of the deal Tenet promised to keep the emergency rooms open for at least 12 years.  Tenet told the Attorney General, who must approve the purchase, that if the purchase goes through, they will promise to keep the busy Daniel Freeman emergency room open for five years.  This ED gets many no-pay patients and will be a drag to Tenet's bottom line.  If Tenet does not buy the two hospitals, they will probably close.  If bought, the hospitals will consolidate services with other Tenet hospitals in the area.  The Unions are fighting since their jobs are on the line.                    

In the California central valley Madera Hospital has ended negotiations with the state over Medicaid payments and will drop their contract.  They will only care for emergency patients.  They have been seeing about 450 Medicaid patients per month.          

California is not alone.  New York's Mt. Sinai Hospital is in serious financial trouble.  The problem is so bad they have called in the Hunter Group.  These penny pinching turn around specialists use as their m. o. the removal of the hospital's top brass and the replacement with their own people. Here they don't have to worry. Mt. Sinai has no leader.  They blame their problems on 9/11.  That is erroneous.  They lost one day of income and gave no care since there were only a few people alive after the tragedy.     Top

HMO & Global Rates

The Washington Post reports that the Mid Atlantic Medical Services (MAMSI) is offering a take it or lump it approach to Washington DC hospitals.  The original premise was for global rates including physician fees for joint replacement surgery.  Most hospitals have said "Go away, you bother me."  MAMSI has therefore backed off the proposal.  The HMO is also well known for its penuriousness to providers.            Top

Malpractice Rates

West Virginia and Pennsylvania tort problems have now added new states, Mississippi and Washington.  In Mississippi, The rates for malpractice coverage has gone up dramatically.  The OB/GYNs are dropping obstetrics.  The common denominators in West Virginia, Pennsylvania and Mississippi are St. Paul Insurance and high jury verdicts.  These states need tort reform in combination with using doctor owned insurance companies.   

The latest malpractice related news is that the lack of plastic surgeons has cause the Charleston Area Medical Center to apply for a lower trauma center rating since one plastic surgeon did not have insurance and another refused call.  This left three and not enough for the 24/7 coverage required for a top trauma center.  Patients with trauma requiring a plastic surgeon are shipped to out of state hospitals.  The hospital has also stated that they may need to close surgery entirely on January 1 since 230 physicians, including most of the orthopedic surgeons, may lose their St. Paul insurance at that time.

Washington has a doctor owned company but the second largest company is leaving the state.  Washington Casualty had cheaper rates than the largest company, Physician's Insurance but they are only going to insure the hospitals, not the physicians.  These companies, like others in the United States, have lost a lot of money in the stock market.  This money used to subsidize premiums.  With this money now gone premiums will need to be raised, not only to cover the insurance risk but also the return on investment that was lost by the companies.      See also Malpractice under this month's Recent Legal News and an article on West Virginia in the Recent Legislation Section.                  Top

S. California IPA Drops 35 OBs

Who needs HMOs?  The Memorial HealthCare IPA has dropped 35 of their 40 OBs from the plan.  The IPA has kept only the five OBs in one group that are board certified.  The 35 dropped doctors are apparently non-certified.  The decision was made by a committee of primary care physicians.  The percent of those primary care physicians that are board certified is not known.  Nor is the ability of five to do the work of 40 and still have time for their other patients.  It is always a very bad idea to allow others to have control over your practice.                       Top

FDA Warns Doctor's Patients

The FDA has taken the unusual step to warn the patients of Dr. Victor Souaid of Pompano Beach, Florida.  Dr. Souaid is an urologist who is being investigated for dilution of Depot Lupron.  The patients have been alerted by letter and asked to see another physician to determine if their testosterone level is at appropriate levels.  Dr. Souaid has not been charged with any crime as yet.                    Top

I Love My Plan

The LA Times has a story of someone who loves her health plan.  Why, you ask.  She has freedom to chose the physician (used to be provider) she wants.  Her plan is one that is gaining in popularity, defined-contribution.  The plan has a low premium to the employee and a fixed amount from the employer. These plans are now being offered by Aetna, WellPoint and soon by United.  It is a take off on the experimental MSA plan allowed by the government.  This allows the patient to have higher than usual co-payments and lower premiums.  If the money is not used in that year it may be carried forward to the following year.            Top

How Physicians May Make More Money

Physicians can make more money by learning how to code correctly.  Most physicians are so paranoid about the federal government, they intentionally under code.  If the physician Will document what they do they will be able to justify a larger and more appropriate billing.  In the ED one may bill for critical care at a higher rate but most physicians are reluctant to do so.  They should not be as long they can document and justify the codes.  As long as one body system is acutely impaired it is a legal billing.  ED observation also increases the code.  Top


DISCLAIMER: Although this article is updated periodically, it reflects the author's point of view at the time of publication. Nothing in this article constitutes legal advice. Readers should consult with their own legal counsel before acting on any of the information presented.