February 1, 2004 News

Hospitals and Systems

Quality of Care



HMOs and Insurers

Medical Marijuana


A story in the LA Times states that some hospitals are giving up hope of survival due to various state laws.  It discusses the closing of Santa Teresita Hospital in Duarte, California, due to the nursing ratios.  It also states that in past decade 60 hospitals have closed in the state while only 26 have opened.  Two other hospitals in southern California have also closed in the past month but for financial reasons; Century City in LA and Santa Paula in Ventura.  Another hospital is on the verge, Trinity in northern California.  Santa Paula stated its payor mix was terrible; 65% Medicare and MediCal and 20% managed care.  They were getting about 35% of each dollar spent.  If it would have remained open the percentage would have decreased in order to pay higher nursing costs due to the ratio law.  The CNA representative stated that this is part of a hospital campaign to discredit the CNA ratio law.  This is a funny way of doing it, closing hospitals.  

California is now investigating the Santa Teresita Hospital closure.  It did not follow the rules of 90 day notification and an open meeting.  It also did not go into bankruptcy.  The investigation should last a week or more in bureaucratic speak.

King/Drew Medical Center has been roasted by a federal report.  The report found five deaths that were probably secondary to nurse errors and a cover-up by the nurses and their supervisors.  The nurse related deaths were secondary to neglect.  The nurses stated that the supervisors instructed them to downplay the acuity of patients so that the sickest patients did not get the care they required.  These problems at the hospital are separate from the medical school which lost its accreditation in surgery and radiology.  The report also found the Board of Supervisors who run the hospital were derelict in correcting the situation.  

In Portland, Oregon a hospital is closing due to financial constraints.  Woodland Park is planning on closing to stop the money losing operation.  Its sister hospital Eastmoreland may face a similar fate.  These are both hospitals that have a high percentage of indigent patients.  The State has cut the payments for these individuals which led to the financial problems. The two hospital may be purchased by separate groups of physicians. 

The hospitals in Nevada state that the State owes them hundreds of millions of dollars in Medicaid money.  Please see "Physicians" below for a continuation of the story.     

Brigham Hospital in Boston will resume its bariatric surgery.  A study that followed a patient death there showed no deficiencies of care.  They will now use dedicated ORs and medical teams for the procedure.  The original belief was that the staple gun misfired but the autopsy findings were inconclusive.  

In a recent article the Seattle Bizjournal states that a Tacoma group has withdrawn its application for a specialty hospital due to Congress' action requiring an 18 month moratorium on Medicare funding for the hospital.  The application process could still go forth and if the time taken to obtain the application is usual, the moratorium will be over.  This proposed hospital will have the same mission as the other two Tacoma hospitals, to serve the entire community.  The Washington Hospital Association is so afraid of competition that it is pushing for an additional year moratorium in the state.   

In Colorado the hospitals want a law that would prohibit physicians who invest in specialty hospitals from working at their hospitals.  That would make for an interesting legal challenge to the legislation.  The Hospital Association is also stretching the truth (lying) when they speak about other communities that have specialty hospitals.  The Colorado Hospital Association talks about a Lincoln, Nebraska, hospital dropped from 110 to 2 cardiac cases after the opening of a specialty hospital.  This was not true.  The Medical Center referred to had started its own cardiology program and while the referrals from that one group did drop that much, they are still doing about 900 surgeries a year.  The Colorado Hospital Association also stated that a South Dakota Hospital lost more than half its patient volume after a specialty hospital opened.  This is not true.  What they lost was half of the net profit.  They went from a 4% profit to a 2% profit.  What this shows is that one should not believe what the hospital associations say but check out and publish their untruths (lies) widely.  

The Milwaukee Heart Hospital, a specialty hospital, has opened an emergency room for all patients, not just cardiac.  

In Sacramento, California, plans for a specialty cardiac hospital have been dropped.  The cause is the new 18 month moratorium.  The large Sutter, CHW and UC Davis systems are thankful.  The three are spending millions to increase the size of their own cardiac programs and Kaiser is also starting a program locally.      

I have already listed this case in a prior Recent Legal News article but it bears repeating.  Florida has a law that allows physicians to go bare but provide $250,000 bond for hospital privileges.  In a malpractice case two women won multimillion dollar verdicts against a physician with no insurance.  The doctor went bankrupt and the attorney for the women sued the hospital involved for $250,000 for each case.  The hospital did not live up to their bylaws requiring the bond or other options.  The hospital lost in trial court and in the appeals court.  What this shows is that the hospital must follow its own rules.    

Tenet is back in the news.  The OIG has subpoenaed two physicians in the El Paso, Texas area with financial arrangements with three hospitals.  Also in Philadelphia, a judge has stated that Tenet had improperly diverted ambulances.  This diversion is from a hospital Tenet wants to close but is under injunction to keep open.  Almost 100 nurses have resigned from the hospital and the hospital has had to close sections, thus the reason for the diversions. 

Tenet says good-bye to 27 hospitals including 19 in California.  This gets them out from under the earthquake upgrading required by California hospitals by 2006.  At least one hospital, Doctor's in San Pablo, California, may not have the money to do the upgrade without Tenet or another angel.  It is a district hospital that was leased by Tenet.  The 17 California hospitals Tenet kept needed minimal seismic upgrades ($300 million totally).  Tenet will attempt to find buyers but would not guarantee that all would remain open.

The LA area has the most Tenet hospitals and the potential closures, if no buyer is found, will cause significant problems.  It is a shame that the powers that be did not consider this when they allowed one system to hold such power in a local area.

In Canada, a physician in Montreal has been found to be HIV +.  The hospital sent out letters to 2300 patients operated on by the physician encouraging them to get HIV tests.  The paper said there were two European cases where a physician spread the virus to a patient.  The case in Florida was one of purpose and not accident.  

California's poorly thought out nurse to patient ratio that started on January 1 has already begun causing problems.  Currently almost all hospitals in the state are technically out of compliance with the law.  With a potential fine of $10,000 per shift for non-compliance the hospitals are taking no chances.  There is a large increase in the diversion of ambulances from hospitals who would be out of compliance if the ambulances came to their hospitals. 

CMS has given hospitals until June 1 to enroll in the new quality initiative and be ready to transmit the information by July 1.  Those that participate will receive more money from Medicare but the information to be sent is from all patients, not just those on Medicare.         Top

Quality of Care

A new study reported in JAMA states that the quantity of procedures performed in a hospital is not a determining factor in its outcomes.  This goes against prior wisdom that the more you do the better you do it.  The study by Duke showed only a modest association between volume and successful outcomes.  Using CABG as the procedure studied it found in Medicare patients there was a small increase survival when a hospital did over 450 procedures as compared to those that did under 150 per year.  In non-Medicare patients there were no differences.  The same was true for neonatal care as reported in the same article on a study by RAND.  The best predictor is the hospitals past mortality rates in both areas.  

In an interesting article in the Wall Street Journal the relatively new phenomenon of using lay people in the delivery room for psychological help for the delivering mother was discussed.  Also discussed were the problems that these "helpers" might cause.  The best solution, outside of barring them from the delivery suite, came from Danbury Conn. who hired and trained their own.      Top


The Congressional Budget Office reported that limiting damages in malpractice cases would do little to decrease overall healthcare costs.  This is due to the insurance cost paid by the physician only being 2% of the total healthcare spending.  Insurer loss is not counted in healthcare spending. 

In a case of patient stupidity, a couple in Wilkes-Barre, Pennsylvania, had a seventh pregnancy where the child was thought to be about 13 pounds.  They refused a C-Section and the Court retained jurisdiction over the fetus and ordered a section to save the live of both the fetus and secondarily the mother.  Before the order could be granted the couple checked out of the hospital while she was in labor and went to a different hospital where she delivered an 11 pound 9 ounce girl without a C-Section.  There is now under consideration a suit against the order for fetal conservatorship by the judge. The couple is considering a malpractice suit for their luck and stupidity, not necessarily in that order.  

Three more malpractice suits have been filed against Jewish Hospital in Louisville, Kentucky for acquired MRSA infections.  This comes on the heels of another suit for wrongful death secondary to the same bug.  The suits all claim the infections are due to unsanitary conditions in the hospital, a charge the hospital denies.  A recent state inspection of the hospital found no deviations from the standard of care.   

Maryland physicians have had their rally at the capitol.  That and a quarter will get them a local phone call.  The real work is not the one day publicity but the constant pressure on the legislature. It should be noted that the two powerful state Senate heads are both trial attorneys and opposed to any tort reform. The physicians should work to get them replaced.

Missouri is beginning the chaos of the malpractice crunch.  In the greater Kansas City area the physicians are closing their Missouri offices and moving across the river to the Kansas side.  The carriers are leaving the state and those that remain are doing huge premium increases.  The trial lawyers state there is no problem.  All is good in the state.  The physicians want a law to prevent venue shopping, where the case is heard in the area best for plaintiffs.  Last year a bill to do this plus reduce the cap on non-economic damages was vetoed. Time to get rid of the Governor.

On January 30, there will be a rally and seven hour seminar on the malpractice crisis in St. Louis.  The Medical Society would like to see all elective surgery postponed on that day so the physicians may go to the seminar.  

In Georgia, the Trial Lawyers continue to stymie the physician's attempts to get tort reform through the stated senate.  The votes were from lawyers on both sides of the aisle. The physicians need to start to put pressure on the people who voted against them by targeting their re-election attempts, no matter if they are Democrats or Republicans.  This needs to start now to get a running jump on the fall elections.  

In Wisconsin, the state supreme court is deciding whether a patient's new physician may be compelled to testify against the patient's last physician as an expert witness.  The woman could not find an expert and so the court declared the new OB must testify so the case is not dismissed.  The real culprit in this is the attorney for the plaintiff who screwed up by not getting an expert prior to filing suit.  This case deserves to be dismissed and the attorney sued for legal malpractice.  

The Wall Street Journal states that physicians going "bare", without malpractice insurance, is on the upswing.  They discuss Florida where a physician may self insure instead of buying malpractice insurance.  Approximately 20% of the physicians in Dade County are self insured.  The AMA has also rid itself of the guideline that states physicians should have malpractice insurance.  It now leaves any decision up to the individual physician.  It is interesting that patients that sue self insured physicians settle quickly and for less money, since the physician may claim bankruptcy. In Florida, the bankrupt get to keep their houses and certain money.

A New Jersey judge ruled that all settlements in medical malpractice cases must be public.  The state will have to open all the settlements it has been notified of in the past five years.  This came from a suit by The Record of Bergen County, a newspaper for the records of the past ten years.  What this will accomplish is to have no more settlements and more court cases.  One of the major advantage of settlements is the confidentiality. Congratulation to the Record for clogging the courts.  This ruling needs to be extended to all settlements, not just medical malpractice since the people have a right to know about all the settlements.      Top


OhioHealth did what it has been threatening to do, they dropped the 17 physicians who invested in the new specialty hospital that opened in December.  Now the law suits begin.  The seventeen physicians were asked one question by the hospital attorney and their attorney answered the question if they invested in a competing facility.  After the physician's attorney answered "yes". the hearing was over. That issue will also be litigated.  The other hospital chain that threatened to drop physicians for their economic interests, Mount Carmel, has not yet done so.  The trials should be interesting as will the anti-kickback and antitrust arguments.  The hospital's board made a unilateral decision that all physicians without complete loyalty to the hospital were to relinquish their privileges.  The board states this was a voluntary relinquishment of privileges and not being terminated. The neighboring hospitals will be able to pick up the cases these physicians control.  They performed about 20% of the surgery at the offended hospital.  Also, since there was no formal peer review process on these physicians as yet, they can not be reported to the National Practitioner Data Bank.  If the system does report them, there may be a defamation suit initiated by the physicians.  See Trovillion v Northwest Med Ctr., an  Arkansas case. in the January 15, 2004 Recent Legal News.

In Buffalo, New York there are two hospitals that are under Kaleida Health Systems.  At one of the hospitals, the new Director of Heart Surgery, Dr. Brodman, was able to reduce a miserable mortality rate to one of good quality within a year.  He accomplished this by requiring a contract between the Kaleida and the hospital's cardiac surgeons.  This contract required the consolidation of the three groups into one with Dr. Brodman in command, taking away money from the group to support research (18%) and for a withhold to reach certain benchmarks (15%), and to follow a code of behavior.  Dr. Brodman also attempted to do the same at Millard Fillmore, the other hospital of the system but failed miserably.  Not only did he fail but he incurred enough wrath the surgeons have filed suit against against the system for skimming good cases, statistical manipulation to reflect false quality improvement and forcing payment to continue to work at the hospitals.  As a past Medical Director, I understand how Dr. Brodman must feel.  It sounds like he is attempting to improve the quality of care but may be a little to heavy handed.  Remember the honey and bee homily.  

In a scenario which reminds me of the farce at Eisenhower Hospital in Palm Desert, California, many years ago West Allis Memorial in Wisconsin has refused to seat the incoming Chief of Medicine at he hospital.  The reason is she is also an investor at a private competing hospital. The hospital board has sent a letter to the physicians of the hospital defending their decision and stating the person is OK, it's her investments that are bad.  The rationale is that as chief she would have access to proprietary information.  I guess the hospital never heard of a trade secrets agreement.  The physicians at the hospital can continue to re-elect the physician as they did at Eisenhower.  If there is no chief of medicine there will be problems with JCAHO for the hospital as well as for the main portion of the admitting physicians.  

In a very smart move a group of pain specialists in Alabama have filed to make their office an outpatient surgical center.  It will cost them about $150,000 to bring the office into compliance with the rules for an ASC.  This conversion would make them eligible for a higher compensation for treating their patients.

In a battle between competing physician groups, a large group of OBs in Broward County, Florida, have stopped delivering babies.  They have been working the past month without pay.  The district hopes there are others to take their place.  In legal terms, the district believes physicians are fungible (interchangeable).  This is the same ideation that many insurance companies have.  

In a show of what can happen when hospitals do not keep their physicians happy, Wymore OB/GYN in Orlando, Florida, have decided to leave Florida Hospital for Orlando General.  The reason is the hospital's requirement that their practice cover the ED even though the hospital had hired another group of OBs to cover.  This practice of 5 physicians deliver over 700 babies a year, 13% of the babies born at the hospital.  As the OBs go one way, there is a possibility that the busiest Orthopod in Central Florida may move the other way.  Dr. Cole who does about 20 surgeries a week is considering moving to Florida Hospital from Orlando General.

Texas physicians not only have the worst Medical Board in the country to contend with but now have to watch their step as a new law requires physicians to report pregnant women on drugs to authorities.  The beauty of the law is that it appears the local DAs will get to interpret the law.  It is possible that those on drugs will no longer come in for prenatal services and show up in the ED for delivery.

The physicians who use WebMD as their billing agent are not happy campers.  It seems like they are losing money due to the ineptitude of the billing and claims divisions.  The problem is being blamed on the October HIPAA billing rule.  However, WebMD knew about the rule months in advance and should have done testing prior to the start of the rule. 

The Nevada physicians are also not happy campers.  The state owes them mucho dinero for care of Medicaid patients.  The state blames a Virginia firm that was hired to implement payment.  She blamed the computer system.  In the meanwhile Medicaid physicians are quitting the program and patients are without care.

In yet another article about the pros and cons of boutique practices, the Boston Globe has used a GYN for the example of another physicians going to cash only and the effect on his patients.  Since this doctor only does office practice, the impact on the patients will be muted.            Top

HMOs and Insurers

Medicare has allowed more money for Medicare+C (HMO) organizations.  The actual amount per organization will vary by county but the total will be about $500 million this year and $800 million next year.  The HMO can then use the money in any way they want including just holding it for "contingencies".  There has been significant criticism of the new monies for the program that now has only 10% of the Medicare population.  The criticism includes the money could be used to help fund pharmaceutical benefits and that the HMOs will be paid more than it costs to care for the patients.   

Kaiser is spending $40 million to enhance their image to attempt to stem the membership decrease.  They lost about 200,000 members in 2003. 

The Health Plan of the Redwoods went bankrupt as a HMO last year.  It owed about $30 million when it went under.  The bankruptcy judge has determined that the creditors including the physicians will be paid 37 cents on the dollar.  There are still about $100,000 of unresolved claims and the sale of property surrounding Warrack Hospital in the Santa Rosa, California area. 

In using bankruptcy and HMO in the same sentence, consider the words Intermountain Health Care HMO.  Utah has one of the highest percentages of bankruptcy in the nation, twice the national average, and 60% of those filing for bankruptcy were for a medically related cause.  The HMO only paid a portion of the patient bills and when IHC came after the patients for the remainder, bankruptcy was the answer.  If IHC only used the same collection tactics as other HMOs, the amount of bankruptcies would be the same as the national average.  Greed gets nothing in bankruptcy.         Top

Medical Marijuana

California's Ventura County Board of Supervisors have agreed that the county should follow Proposition 215.  This would allow position of not more than 8 ounces of dried marijuana, or 12 immature or six mature live plants for medical use.  This follows the new state law that went into effect January 1.  The idea of a community garden to grow marijuana is still not decided by the California or federal courts.  The people of El Dorado County who have expressed the idea are looking for a federal case so it can be tested in the courts.    

In a new study by the Field Poll, medical marijuana found a substantial increase in those that support the idea. There was no subgroup, conservative, liberal, etc. that was against the measure.  The DEA states that "the poll shows how well the marijuana lobby is deceiving the public by distorting the facts".  That is one interpretation.  The other is that the Feds are as wrong on this as they were on smallpox and the people recognize stupidity when they see it.        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.