August 1, 2006 News





A physician group in Fort Worth, Texas is going to build a hospital with an ED in the city.  It will be in an affluent suburb and close to two existing hospitals.  The two existing hospitals need to start to appease physicians or they will see more patient defections.

Health Affairs, a hospital policy journal, has an article on specialty services and how as the scope of these increase outside the hospital, the current hospital profitability may be significantly affected.  The article believes that the first decade of this new century hospitals needed to build bigger and better mousetraps to attract physicians.  This led to hospitals in high competition areas having higher costs per case.  Many hospitals are doing joint ventures with physicians in order to keep the physician from taking most of the business into their own ASC or office.  The study went to the hospitals and systems but left out the physician.  One of the things that came out were that the hospitals were not publicizing themselves but specialized service lines within the institution.  The names of these specialty services all carry the name of the hospital and don't mention the physicians that they are partnering with.  Some have hospitals within hospitals, where they brand a floor a specialty, such as a stroke center.  The article goes on to state that an open staff model might not be as good as employing physicians to get or buy their loyalty.  This could relegate the remainder of the hospital into lower class members with less money flowing for their equipment, etc.  It appears some health plans are also steering patients to physician owned outpatient facilities due to the lesser cost.  The conclusion was that it makes no difference who controls the health care delivery, it will be more via specialty lines and not general conditions.  This will increase health care costs and potentially erode hospital profitability. 

The VHA has done a study on disruptive behavior in the OR and its nexus to adverse events.  This came from academic institutions.  The reporters of bad behavior were anesthesiologists, nurses, physicians and residents.  They found that the cause of the bad behavior was the nurse 21% of the time and the physician 22%. Since hospitals can not replace nurses easily, guess where all the blame will fall.

The IRS has begun its investigation of 500 not for profit hospitals in the country to see if they are truly deserving of the tax exempt status.  The questionnaire asks what the hospitals consider uncompensated care, what community programs they have provided and who decides the salaries for the officers and key employees.

Say it's not true! The hospital CEOs wouldn't do this.  The New York Times must be mistaken.  They state that some hospital CEOs are being allowed to be wined and dined by the suppliers and then direct the hospital as to what supplies to buy.  This would be illegal if physicians did it so I'm sure CEOs would not think of doing this dastardly thing.  This may be considered insider dealings and is now being investigated by at least one state attorney general. Now Northwestern's CEO is on the Board of Becton Dickinson, a maker to syringes, as well as the HRDI, an organization that is owned by hospitals.  HRDI pays the CEO $50,000 a year to attend two meetings.  Does Northwestern use Bectin products?  The HRDI only allows two competing companies in any field to join.  Antitrust??  Gee, what do you think would happen if physicians did this??  Ever wonder why physician sometimes think the suits are sleezes?  They are.  

Since the article on HRDI has come out ten execs have resigned.  They apparently don't like the adverse publicity.  HRDI says the 10 defections are not due to the investigations but are part of the normal attrition process.  Some of the members are now receiving subpoenas.

The American Hospital Association is being bombarded by CMS and Congress.  They need to do something to attempt to make the legislators think they are truly non-profit, which they are not. The newest report by the organization to its member hospitals is recommending the hospitals to determine their contribution to local and regional economics and then tell their legislators about it.  This is okay but of course has nothing at all to do with being non-profit or community benefit. 

It is always interesting to see institutions fighting newbies.  in Tennessee, two county hospitals have had it their own way for a long time.  Now HCA is proposing to come into the area.  The two hospitals are opposing HCA with advertising and public relations.  They will spend well over $100,000 that could go towards patient care on this project.  They are really afraid of competition and will not do anything to make themselves better.  This happens in areas where there still are CONs.

In another location Trinity Medical Center In Alabama is fighting another hospital's building of OR suites for a special group of Orthopods since Trinity has orthopedic space but not the surgeons. They should lose the CON hearing.  They may not even care since the possible raising of the issue may be to forestall any problems with Trinity's upcoming CON hearing for a replacement hospital.  Tit for Tat. 

In Detroit, there seems to be a shortage of surgeons since the hospitals are using perks to either lure them or keep them.  The hospitals are doing joint ventures with surgeons to keep them from forming their own ASCs or hospitals.  One hospital has a 500 case per year surgeon so the hospital is paying the hotel bills for the patients.  Still others are promising priority scheduling. 

Solucient has named its best hospitals.  Most of them have hospitalist programs.  An analysis of the programs show better quality but not lower costs.   

In Kansas the hospitals are starting the push to build facilities where the insured are going, the suburbs.  The law of Willie Sutton still prevails.  When asked why he robbed banks, Willie replied "Because that's where the money is".

In Kentucky, a physician was planning on enlarging his urgent care center to include a 2000 foot OR and GI suite.  He cancelled his plans after finding out that the state has a rule that no ASC can be built unless all the ORs in that county plus the surrounding counties are operating at 85% capacity.  It sounds like the hospitals had gotten to the legislators.          Top


California has just decided to not use managed care as a forced issue for Medicaid patients and now Colorado's last private Medicaid HMO has gone away.  The State was reducing its payment by 15 percent and that was the last straw.  There will be 65,000 Coloradoans without healthcare.  Most of the Medicaid recipients are on fee for service if they can find a physician. 

The Institute of Medicine (IOM) has come out with another major report.  This one focuses on pharmaceutical errors.  They want all prescriptions to be electronic by 2010.  They state that now there are 3.5 million harmful drug errors a year in the US.  In hospitals there is at least one drug error per patient per day.  As of now, it is still too expensive to to purchase electronic ordering systems but it does cost about $5800 per preventable drug error per patient in the hospital.  The IOM report wants government to speed electronic prescribing to make compatible all the computer systems now in use.  IOM also possibly self serving states that $100 million per year should be spend on drug errors and the way to prevent them. I believe another way to stop or deter hospital problems is to make the hospitals do quality checks.  The only way to do this is to have the hospitals not be paid for any stays caused by drug or other hospital caused errors.

Physicians and the AMA continue their old saw that if Medicare funds are reduced they will cut back on seeing Medicare patients.  According to a recent study by the GAO this is not true.  Currently only about 7% of Medicare patients are having some difficulty seeing physicians nationwide.  They found that in 2002 when Medicare reduced the payments by 5.4% there was only a slight drop in patients being seen by physicians.  Most of the 4% that had difficulty finding a physician were those with no supplemental insurance or Medicaid ( basically the same as no insurance).  The GAO stated from 2000 to 2005 more people sought care and got more services.  What the article doesn't say is that during that period all reductions were not only cancelled but there were increases in payments.  

Hospitals are easing cell phone policies.  Earlier cell phones were banned in hospitals since they interfered with certain instruments, especially in the ICU and ED.  Those instruments are now no longer sensitive to the cell phone.  There are still signs up in hospitals but no one pays much attention to them.  The use of cell phones helps the communication with physicians and nurses.  

Some hospitals are getting smart,  EMTALA only applies if there is an emergency.  Once the patient has a screening exam and is found to have no emergency medical condition EMTALA is gone.  The hospitals are then requiring payment up front for non-emergencies.  There are always critics who do not have to see the patients and lose money on them.  They believe that this may put physicians in a position to not treat patients who don't need emergency care and theoretically may not come for care when they really have an emergency.  Those who show up with a non-emergency will be charged for their care or be sent to a clinic for their routine care.  

For patients with the new pharmacy Medicare Part D, almost 80% report being satisfied with the program.  The was a difference in the 20% that weren't satisfied as many were taking six or more prescriptions a day.  Almost half were saving money on the plan, 1/3 were paying the same and 12% were paying more.  The complaint rate is now 2 per 1000 and over 50% of the major problems and 90% of the minor problems were satisfactorily resolved. 

Kaiser is attempting to reduce costs in the typical HMO way.  Now that they have contracts with the vendors that set up their large IT program, they want to reduce costs by about 20% by having the vendors reduce their contracts or be put out to pasture.  Top  


As I am sure all know that the VA has had several significant computer mishaps putting in danger all veterans for identity theft.  The computers have been recovered and all is well.  At least almost.  The resignations from the VA Department are starting.  Since the theft five officials have left, including the VA under secretary for health who went to HCA and more recently Tim McClain, the general counsel who was roasted by the Congress.

It's not just the USA.  A laptop computer in Canada was stolen from a car.  This computer had financial information of about 8000 physicians and families of the Canadian Medical Association. 

Kaiser has also had a lap top stolen with patient names but not any SSNs.  I hope the organizations learn from this, but they won't.          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.