June 15, 2004 News







Anthem Insurance is being investigated by the Department of Justice for their "most favored nation" requirement in Indiana.  This clause requires hospitals and physicians to give Anthem the lowest rate they give any insurer.  

Blue Shield is playing its schizoid game.  There are three Cottage hospitals in Santa Barbara, California.  They all get the same reimbursement.  Blue Shield has changed the status of two of the hospitals from choice to affiliate.  What this means is that the patients that choose those hospitals will have to pay out of pocket $100 per day for non-emergency care.  It is interesting that this change does not include those patients who work for businesses of over 500 employees.  The explanation is that the two hospitals have higher costs than the third one.  

Blue Shield is also the HMO for CalPERS, the largest insurer outside the federal government.  CalPERS has jettisoned a bunch of hospitals due to their costs.  The insurance brokers are now raiding the unions that CalPERS covered to get them to switch to Blue Cross or to the PPOs.  This would save 53,000 people from changing their physicians.  Sutter, the system that was hit the hardest in the number of hospitals removed, really only had their bottom line affected by 2% and are putting out hints that those hospitals that remain should raise their rates.  CalPERS is retaliating by stating that if any union pulls out of CalPERS, they may not be re-admitted for five years and the insurance companies may only give low rates for one year and then raise them dramatically.  

Hewitt Associates believe that HMO premiums will slow somewhat but still be over 10%.  The average should be about 14% increase in premiums.  The employers are having more of the employees pay larger co-pays but still only about $20, a bargain and not enough to make the employee think about the necessity of the visit.           Top


In the California East Bay, Eden Hospital, owned by Sutter Health, but a District hospital, will take over management of the for profit San Leandro Hospital.  The time is for twenty years with the promise that San Leandro will keep its ED and acute care open for three years.  The hospitals will have separate boards who will work "closely".  You bet they will with Sutter overseeing both.  Any bets on what will happen after the three years have elapsed?  They will be a large rehab hospital.   

Oakland VA Hospital in Pittsburgh, PA, is to be be commended.  They recognized a severe problem with antibiotic resistant bacteria and confronted it head on.  They did it with education about methicillin resistant Staph (MRSA).  The spread is by contact, usually through an intermediary health care provider or supplies.  The education focused on Semmelweiss principles of hand washing before and after each patient contact, isolation of infected patients and all worker wearing gowns and gloves when dealing with the infected patients.  The solutions involved the employees making sure gowns and gloves were always available at the rooms so no decision would need to be made regarding immediate care versus finding the supplies.  Also dispensers of alcohol based sanitizers were placed in patient rooms for easy hand washing.  Also all patients coming on to the floor were tested for MRSA and those that were colonized (have the bug but no symptoms) were isolated just has those were with the infection.  Again, many of the ideas for the prevention came from staff and not the hierarchy.  

The Wall Street Journal has reported that more hospitals are billing patients for at least a down payment on their bill prior to any non-emergency care.  Of course the leader in this is HCA, the bastion of free enterprise, unless it affects them negatively.  The hospitals are asking for payment before the patient leaves the hospital.  HCA will require either the co-payment or a down payment from insured patients upfront prior to admission for non-emergency care.

The Detroit Medical Center has lured five cardiac physicians from other Detroit centers to rebuild its program.  All five were given titles at the Center.  I will assume that these titles come with significant stipends that made it worth their while to leave their past institutions.  

In Pittsburgh, Pennsylvania, all is not happiness and roses.  The merger between Children's Hospital and the University of Pittsburgh is festering die to an significant argument over a new hospital and the cost of same.  The University wants to cap the money at $400 million and Children's does not want the cap.  Children's has asked for a formal dispute resolution process, a wise decision.  

The Wall Street Journal has a story regarding the New York hospitals use bank attachments and the like on deadbeat uninsured patients.  The patient advocacy groups don't like the methods and believe the debt should not be collected since the hospitals are to receive compensation from a "bad debt and charity" pool paid by the same hospitals but administered by the state.  The state will hold hearings about the practice of going after legitimate debt.

A Canadian study (How did they get into the US healthcare mess?) states that for-profit have higher prices than non-profit hospitals. Nobody gets their price.  The study does say the for profits have more economic challenges such as shareholders and taxes.  There is no better quality in the for profits for the extra money.   

Health spending slowed somewhat in 2003.  the spending per person rose 10% in 2001, 9.5% in 2002 and 7.4% in 2003.  During this time hospital spending still accounted for over 50% of the healthcare dollar.  The hospitals continue to get more money due to the strengthening of their bargaining position versus the stingy insurers.  

Standard and Poor's has become wary of hospitals that self-insure.  If they don't have reinsurance policies , the hospitals might find their bonds downgraded.     Top  


In Wisconsin there are sales on heart scans.  The price is usually in the $200 price range but the specialty heart hospital is doing them for $99.  The competitor has dropped the lost leader price to $49.95.  The hospitals have not advertised the bargain basement sales but the word has spread by word of mouth, direct mail and an article in the local newspaper.  The scans show the amount of calcium in the coronary arteries.  What this means is not known at this time but may call for heart caths.  At this price the exams may be worthwhile as long as the public knows it may lead to other more invasive tests.  The lost leader tests are getting people to become familiar with the institutions and to hopefully use it in the future.        Top  


A 1999 census study shows that physicians make the most money of any profession.  Number two on the list was CEO and number three was lawyer.  The study also found a significant pay differential between the sexes.  The female physician received about 75% of her male counterpart.  It was thought that this was due to the physician choice or balancing home life and career. 

A Governance Institute study shows that about 20% of the physicians on hospital staffs do 80% of all the clinical work.  Only about 1/3 of physicians on hospital staffs visit the hospital at least once a week.  This may pose a problem for those hospitals that have not changed their bylaws to conform to the new realities of medicine, it is outpatient and office based.

The trauma surgeons in Portland, Oregon, have broken off contract negotiations with Legacy Health Systems.  Since trauma is not come under EMTALA, they would be within their rights to force Legacy to close their system or find different physicians. There is only one other trauma system in the state, the University of Oregon.  The fight is about pay, scheduling and hiring.  The hospital wants to pick the surgeons and set the schedules which the physician group now does.  The hospital system believes it can get some of their employed physicians to take call.  But will it be enough?  The answer is "no".  The hospital has begun diversion of new trauma patients.  The hospital and physicians continue to meet.  The hospital states it will stay on diversion until they wrest control of the process from the doctors at the expense of the public.  The physicians have taken a different road.  They have offered to continue to work for free at the competing University trauma center until the dispute is resolved.  The hospital refused. After several days, the physicians and hospital compromised and the terms of the contract are not known.  One may guess that the hospital paid more than they offered and the physicians got less than they wanted.  It will be interesting to see who won out in the control aspect.

In a study by Merritt Hawkins of specialists in 15 cities, the specialists in Boston are the ones with the longest wait to see patients.  The Bostonian rate was 37 days for a cardiologist, 45 for an OB/GYN and 50 days for a dermatologist.  The reasons were not spelled out but the speculation was fewer physicians and those practicing were seeing less patients.  The other possible reason is the loosening of restrictions of insurers as to who may see specialists.  The public obviously wants full access. It is interesting that the People's Republic of Massachusetts has the second highest number of physicians to patient ratio in the country.  Washington, DC, is the highest.    

JFK Hospital in Palm Beach, Florida, has reinstated Dr. Lance Lester, a cardiac surgeon. Dr. Lester had been suspended from practice for an abnormally high mortality rate based on the expected.  What the expected is does not take in the individual cases and is only a guideline.  Now a judicial review committee has vindicated him and he is back on the staff.  It is interested that while the physician was suspended the patients that wanted cardiac surgery at the hospital tumbled. Also the gross income of the hospital fell by about $5 million.  This started with a bunch of anesthesiologists complaining about the length of time it took Lester to do surgery on his complicated patients.  The anesthesiologists are now under new management.  The CEO is also gone, being "promoted" within the HCA program for losing money. There is still the matter of whether JFK will pay any money to Dr. Lester for the time he lost and his legal expenses.

The Florida Blues are starting to reimburse physicians for email to patients.  The patient would pay about $5 and the insurance company would pay between $19 and $35 for the online consultations.  They would hope to get a response within eight business hours.  

In another example of how hospitals are not the physician's friend, the VA has dismissed two physicians after they testified for another physician in a hearing regarding differential pay.  Their side won and the VA was not happy.  They concocted some charges against the two physicians and dismissed them.  the physicians sued the VA under the whistleblower statutes and again won.  Both doctors won reinstatement, back pay with interest and benefits, the bad review was also expunged.  The VA may appeal the decision and hopefully lose again and pay the physician's attorney fees as well.  

The first of the bonus payments by insurers to physician groups under the pay for performance concept is supposed to forthcoming this fall.  Last year Hill Physicians, a 2100 physician group in northern California, paid out $9 million in 2002 and $12 million in 2003 to its members.  This included its primary care physicians and some specialists.  This year more specialists have joined the bonus program.  The performance bonuses are based on clinical quality (50%), patient satisfaction (40%) and information technology (10%). 

There continues to be a major backlog at CMS for physicians waiting for their Medicare number for billing purposes.  This includes those that just change offices.  The problem has been and still is the new computer system the CMS installed a year ago.  Without a Medicare number, the physician be paid by the federal organization.   Top


After the Illinois Democratic controlled legislature turned down all malpractice tort reform bills, the Governor wants to get negotiations between physicians, lawyers and insurers going again.  He wants to do this instead of a legislative executive session.      

In the June 7, 2004, Daily Journal, a magazine for California Attorneys, there are several articles about medical malpractice.  The first one is regarding a recent Attorney General ruling that those who give medical expert witness testimony that is false can be sanctioned by the Medical Board.  For some reason the Trial Lawyers didn't like that.  Could it be because they use witnesses that lie?  The next article was about the idea of having all medical malpractice cases come before a specialized medical malpractice court with state paid health care experts replacing judges and juries.  The Trial Bar didn't like that either.  

A poll in Massachusetts has found that 69% favor the physician's position of a limit on non-economic damages.  They are finally waking up and are scared they may lose their physicians. 

Massachusetts has been added to the official medical liability crisis state's list by the AMA.

The physicians of Rhode Island are using one day to talk to all their patients regarding lobbying for malpractice reform.  They should have been doing this every day.        

In Nevada there is a proposition on the ballot to increase the tort reform the legislature failed to complete several years ago.  However, also attempting to qualify for the ballot is a proposition that has the good sound of lower auto premiums but it also may remove any caps on med mal cases and would also prohibit limitations on attorney fees.  The head of the Trial Lawyers states that the physician are wrong about the measure. "As far as I know, there is no indication that this is anything more than a sincere effort to get an across-the-board insurance rollback and make insurance companies accountable, at least in the state of Nevada."  How do you know when a trial attorney is lying?  His lips are moving. 

A physician recruitment firm has taken a webpoll on medical malpractice and found the about 40% of 800 physicians polled would be willing to go bare (without malpractice insurance). 

The AMA discussed the potential to blackball physicians who give expert witness testimony for plaintiffs as well as the controversial measure to not treat trail attorneys or their families.  None of these are illegal but they are not ethical and all were withdrawn after the discussion.  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.