An article in the Denver Post states that J. D. Kleinke, a former champion of managed care has changed sides. He states that none of the "promise" of the last ten years in managed care have come to pass. He now believes all the industry cares about is cost, not quality. He also believes the employer is not the employee's friend, that all the employer thinks about is the cost. He also sees fault in situations where employee health coverage is heavily subsidized by the employer. This gives no incentive to ask oneself about the necessity of seeing the doctor. The different state laws that each MCO must cater to are another problem and is significantly adding to the cost of care. Kleinke believes that to see prices fall one needs to take the employers, state government, and brokers out and add a tax free MSA that is easily understood. He estimates that about $90 billion ($1000 per family) is for managed care intrusion into the physician patient relationship.
Not all is bad in managed care. Kaiser of Northern California has made a lot of money this year. They are going to expand in the central valley by building three clinics and a hospital. In the past five years their insured population has doubled to 113, 000. They also are thinking of a new hospital in Antioch and expanding some of their out-house services to in-house. This includes radiation therapy, even though they have not done well with it in the past.
Speaking of Kaiser, the Hawaii branch states it is safe to put all of their medical records online. The system is on a private network only available to local providers and does have an audit trail. Physicians and nurses will pass several levels of security and then be allowed to review records, write prescriptions, order and review test results. Kaiser states that information may be used with permission for research but will not be used for marketing or soliciting.
Humana has come up with a cheaper way to present its plans. It's call the web. Joining a web company will allow each person to customize what is best for that person and to know the cost of that choice. What a novel concept! The employers will do a defined contribution toward the cost chosen by the employee.
Highmark, in a time when others are raising prices, is cutting theirs for people who have no group insurance. Of course, they are also cutting benefits and raising out of pocket expenses. Highmark is also adding choices so referrals are not required. Members will also receive some coverage if they go out of plan. This could cost up to $4500 per family out of pocket. Better to look at MSAs.
Speaking of Highmark their intrusive antitrust lawsuit into the Pittsburgh, PA merger of several hospitals with Children's is down the tubes. The State said there is no antitrust and the nasty HMOs dropped their suits.
Sutter Health in California is dropping Health Net from its employee's choices of health plans. This leaves PacifiCare and in some communities Blue Shield. The reason is the inability of the two entities to achieve a contract for payment to Sutter for next year.
Blue Cross and Shield of Tennessee are not going to sell HMO or point of service (POS) policies. The CEO states that customers no longer want this option. The products have continued to show losses for the past decade. Alabama Blues did away with their HMO products several years ago and are now gaining market share against the HMOs.
The HMOs are being outgunned by hospital systems for the premium dollars. Some have come up with a new gimmick called a network within a network. This means that some patients, sorry consumers, will need to pay more at certain hospitals. This of course will lead to those hospitals that don't give the HMO a good deal to potentially lose patients. The difference for the consumer will be significant. The range is from $0 for the "select" hospitals to $400 per day in other hospitals. This is the power grab for health plans to gain power back over hospitals. The first casualty is U.C. Davis in Sacramento. All the area hospitals except UCD were on the "A" list. The only reason one becomes powerful is due to the fact that power is given not taken. Why would people choose this plan? Find another plan or go with a PPO. Top
The California Healthcare Foundation has after study found that medical groups are making less money due to fiscal mismanagement on their part. This takes some of the burden off of the lowest reimbursement in the country by the HMOs. The Foundation's survey included 74 California medical groups. This looked at the IPAs and their ability to meet the State's solvency standards. Basically, most of the State's IPAs are functionally bankrupt. They do not have enough cash on hand to pay the bills. The study found that the better paid medical groups are no better off than the less paid, which verifies the HMO position that it's the doctors and not us.
Also in California, the physicians in the Health Plan of the Redwoods in Santa Rosa have been offered a contract that will probably be unacceptable. They are offered a raise but must decrease hospital LOS and prescribe more generic drugs. This will be a show of strength between the physicians and the plan and should be interesting to watch from afar.
Madera Hospital in central California has deferred for one month the offered Medi-Cal contract. This means the transferring of patients to other hospitals when stable. This also means a loss of about 450 patients a month to the hospital. This is the third time this has happened. The other two times the hospital was given more money.
In Chicago there is only one Medicare HMO, Humana. They are raising their rates approximately 20% next year for drug coverage and other extras. Enrollees will spend, depending on their plan, between $100-$200 per day for each of the first five day s of hospitalization. currently this is a free benefit. Humana is doing the same thing in Cincinnati.
In Texas, Blue Cross is canceling the contracts of about 450 Harris County independent physicians for next year. In order to stay with Blue Cross the physicians will need to join an IPA. One group of 18 physicians has appealed the decision and is planning to double in size as well as working outside the HMOs. Size does matter. This also means the physicians will be paid by capitation, the same as the now defunct NAMM did. The physicians are smarter this time and are planning to ask for higher cap rates that NAMM paid. Millman USA has seen a drop off of physician groups call for help in analyzing cap contracts. This may be because of less capitation or because of the company itself.
Michigan is slow paying physicians for their Medicaid services (what a surprise). The physicians at Wayne State have warned the State's HMO that they will not treat Medicaid patients unless they are paid. They are currently owed about $ 3 million in net charges ($8 million in gross charges). Top
The U.S. DHS warned that the nursing shortage will become worse as the number of patients rise. The problem is in both the hiring and retaining of nurses. There are currently about 125,000 nursing vacancies and the projection is 400,000 by 2020. This is the time when boomers will require more healthcare. Top
The Mayo Clinic believes there will be an ongoing shortage of anesthesiologists. There is currently a shortage of only several thousand but this is predicted to balloon to twice as many in the next nine years. The cause of this is apparent. Managed care was to decrease surgery and therefore less anesthesiologists ere to be needed. as managed care goes away, more anesthesiologists will be needed. They see this happening in other specialties as well. Top
As physicians in Pennsylvania lobby for tort reform to reduce their premiums, their patients, doing the bidding of the trial lawyers, are also lobbying. The patients are lobbying for not reducing awards and to force physicians to disgorge information about their backgrounds and prior law suits. Pennsylvania has a very high amount of suits and a high amount of money per award.
The Philadelphia Business Journal reported that the awards for malpractice cases in Philadelphia are more than double the rest of the state. This information is the reason for the forum shopping that happens without state laws on tort reform.
In South Carolina awards are also increasing. The physicians there are also beginning their lobbying and it won't be long to the trial lawyers begin theirs.
Please see Recent Legislation regarding the West Virginia fiasco. Top
The Red Cross has announced the destruction of approximately 10,000 units of blood donated after the 9/11 attack. The 42 day shelf life has expired. The Red Cross also states that fresh frozen plasma has been saved. The Red Cross was criticized when they kept asking for blood, after they knew there was no need. The CEO of the Red Cross has resigned without explanation. Top
Tufts Health Plan is issuing physician report cards to its members. This is to encourage the use of the higher graded physicians. The units rated were the comparison of the medical groups with national standards in six areas. The areas are member satisfaction of their PCP, access to specialty care, appointment waits, diabetic eye exams, breast cancer screenings and cervical cancer screenings. All medical groups scored well on the test and therefore Tufts says their medical groups are good. PacifiCare did this in California three years ago and did see a switch of patients (about 30,000 of 2.2 million) from lower rated groups to those with the higher ratings. The criticism of the Tuft's data is that is was from billing information. Since Pap smears or fundascopic eye exams are not paid separately, they may not have been billed. 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.