In the first HMO bankruptcy in the country since Pilgrim in 1999, the Health Plan of the Redwoods has filed for Chapter 11. This means it will say in business and restructure their debts. The judge has asked that the hospitals and physicians "slow their requests for billings and reimbursement requests for service". The Health Plan is increasing its premiums in the 20% to 30% range in order to get on a firm ground. They also plan on decreasing their Medicare products and use multitiered co-payments for prescriptions.
Western Health Advantage, a Sacramento HMO and only one of several chosen by the giant CalPERS to be a provider, has turned down the proposal. This leaves Kaiser and Blue Shield. The HMO dropped out due to the 15% increase they had negotiated prior to the awarding of the contract would not be enough to care for the huge increase in volume and costs. This will cost Western its current 5000 CalPERS members. This is probably very smart since when the rates were negotiated they only expected 5000-10,000 members, not the 45,000 they would expect under the new CalPERS contract. This would overwhelm their computers and ability to continue to pay the providers their current reimbursement. Providers own the HMO.
The physicians of the People's Republic of Massachusetts are not as socialistic as their legislative and ivory tower counterparts. They have seen the light and have started to cease and desist from taking Medicare HMO patients. The three largest HMOs have lost 17% of their physicians in the past year. Tufts has seen its physicians drop by 40% since 1998. Also in the past two years the enrollment has declined by 13,000 for all Medicare HMOs. The government is attempting to keep the program afloat by giving more money for prescriptions but this does not mean more money for physicians and therefore the dropouts will continue. Top
In Memphis a new IPA has formed. The new entity is of 19 physician groups with 200 specialists. The IPA has already turned down the offer by Baptist Health Services to provide services. Baptist holds some contracts with the physicians in the group as direct contractors. Baptist believes they have enough specialists to continue to offer services. The employers will now need to contract not only with Baptist but also with the new IPA. The IPA will not take any risk contracts, only fee for service. Top
In the midst of the malpractice crisis in Nevada the Nevada School of Medicine are turning away from the state malpractice plan. They are looking at a private plan to cover their 400 full and part time physicians. A new kicker has been added to the state plan. If one wants to guarantee stable rates for a year they will need to pay an additional 10%. The medical school is immune for more than $50,000 per claim. There could be multiple claims per incident.
The University of Nevada Medical Center has lost or will lose an additional five trauma surgeons and 26 specialty surgeons due to malpractice premiums. The Center should be able to cover June and July with the current staff. If any more leave the center may have to close. There will be only three urologists left to take call and they can only be on call a 24 hour shift every three days. The trial lawyers have stated that it's terrible that the physicians are quitting but the lawyers have never been convinced of the cause and effect relationship between the premiums and the civil justice system.
The Los Vegas Sun printed an article using direct comparisons between California's reform and Nevada's lack of same. The only negative aspect between the comparisons were the spokesperson for the Governor of Nevada stating the law if passed would not help immediately and will be challenged in court. In California, the law was challenged but was in place unless it was overturned. It wasn't overturned in any aspect. I agree it will take be immediate panacea but it will be after several years. Nevada has nothing now that says that.
The Nevada Governor now states that he will call a special session if the insurers, lawyers and physicians can agree on the problem and the solution. This means that he wants the parties to set the agenda that the legislature is supposed to do. It also means there will be no special session and physicians will continue to close their practices or leave the state.
The West Virginia Medical Association is getting ready for a potential special legislative session. They have appointed a committee to develop a physician run insurance company and to consider how it can be operated under the current tort laws or what must be changed.
The New York Times states that West Virginia physicians are changing their practices in response to the malpractice climate. This includes dropping of OB and only doing GYN or the stopping of doing high risk surgical cases. Also, in the past two years 5% of physicians have either retired or moved to get rid of the malpractice problem. The Trial Lawyers state the real crisis is to take away the fundamental right to seek and obtain compensation for a wrong. They just don't get it and are trying for all they're worth to protect their turf.
The Denver Post states the worry of physicians leaving five western states is premature. A private company has done a survey and found that the five states have not shown any fleeing. The company goes on to state that if continuation of increased malpractice premiums along with the ratcheting of fees by insurance companies continues, there will be a flight especially in the older experienced physician group.
Ohio has now entered the fray. The physicians are also being gouged here and are in need of tort reform to reduce their malpractice premiums. The problem in the past has been the Ohio Supreme Court declaring tort reform unconstitutional. This means there must be a new judiciary in place when the court hears the challenge again. There are presently two Supreme Court jurists running for the position that are friendly to the tort reform process.
Not to be left out is the sovereign state of New Jersey. The physicians recently held a rally in Trenton to publicize their own malpractice dilemma. During the rally multiple physicians were not paying attention since their cell phones kept going off. They are looking for the same cap on pain and suffering as the other states along with other tort reform. Top
Brown and Toland, one of the largest IPAs in California is reducing its profits in order to pay physicians more money. B&T increased payment by 8% and added bonuses. This halved the IPA's profit. Top
The People's Republic of Massachusetts legislature passed unanimously a bill to fine pharmacists for errors due to their negligence. The legislature is also considering reducing the pharmacy payments for Medicaid patients. This will lead to shorter hours at the pharmacy, longer waits for all to get prescriptions filled and some pharmacies dropping Medicaid prescriptions. The pharmacies would be assessed a user fee on each non-government prescription filled. This cost could only be charged back to cash paying patients. The pharmacists could not pass the cost to the HMOs until the contracts were renegotiated. The pharmacists now can charge a co-pay of 50 cents for Medicaid prescriptions. This would be raised to $2. However it is illegal to not fill a Medicaid prescription if the beneficiary doesn't have the co-pay. The pharmacists expect this to be routine if the co-pay is raised. This is what happens when one becomes socialized and tries to be all things to all people. Top
In the latest Annals of Internal Medicine is the first of an eight part series or medical errors. It discusses an operation on the wrong patient. The patient had an EMG when if wasn't necessary. The doctors realized their mistake and halted the procedure part way through. The analysis of the case showed that there were multiple errors and if any one of them were changed, the result would have been the same. In the same issue an article from the University of Texas showed the number of adverse events is dependent upon the subjective opinion of the physicians reviewing the cases. The more reviewers the greater the accuracy.
An interesting article in the New York Times discusses the cost of health care inefficiency. This includes the overuse of medical tests and the lack of preventative care. The study sponsor, Midwest Business Group, states this costs the employer approximately 1/3 of the total cost per employee per year. The mega companies are giving employees money back on their premiums if they use health plans with the best quality controls. I remember that it was common for the primary care physicians to order lower GI x-rays followed by IVPs for patients with abdominal pain. The IVP could never be done since the barium would still be in the patients colon obscuring the kidneys. This took many years to change the ordering habits. Top
Vermont has targeted gifts to physicians and nurses by drug companies. In the first law of its kind in the nation, the legislature has passed a bill stating that any gifts totaling more than $25, excluding drug samples, must be reported by the drug companies to the state.
The Seattle Polyclinic has started to charge pharmaceutical reps $30 an hour just to enter the clinic without any promise of seeing a physician. In Kentucky, Time Concepts charges reps $105 a slot to see one of their physicians. The companies may bargain by saying no rep means no free samples. 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.