January 15, 2004 News





HMOs & Insurers


The Cleveland Plain Dealer has an article about a neurologist that is leaving Ohio for Colorado.  He had been in practice for 15 years in the Cleveland area and has been sued for malpractice six times.  Neither he nor his insurance carrier has paid a penny on his behalf but he had been dropped by his carrier for frequency of claims.  He will pay $15,000 a year in Colorado for malpractice insurance as opposed to over $100,000 in Ohio.    

The AMA has a story about the fiasco in Pennsylvania.  The story is about a physician who pays $24,000 per year in malpractice premiums plus another $5000 to MCare, a fund set up by the state to help pay the ridiculously high jury awards in the state.  This is analogous the "Field of Dreams" where if you build it, they will come.  If the MCare was abolished, there would be more give and take for the amount of the insurance policy only.  The legislature did reduce the amounts the physicians needed to contribute to the fund for two years.  In order to qualify for the reduction, the physicians would need to stay in this litigious state for the year.  If they leave early they will need to pay the full MCare fee.   

The Atlanta Business Chronicle has an article about the 38% of physicians over the age of 50 who are retiring or moving to other areas of practice.  In a survey across the country 48% said they will change their practice to non-clinical work or early retirement in the next three years.  How they think of their profession is shown in the number that would recommend medicine as a career, 36%. 

The idea of malpractice reform is back before the Kentucky legislature.  A newly formed organization who deny being led by trial attorneys will send to each legislator daily a new malpractice horror story.  It should be noted that a member of the Board of the organization is the president of the state trial lawyers.  The person profiled  alleged hospital malpractice, has filed suit but the case has not yet been adjudicated.   

Virginia physicians are back at it.  In February, they will march on the capitol to show their displeasure regarding the malpractice climate in the state.  It is the same thing; the physicians seeing early retirement and loss of services and the trial lawyers seeing loss of money. 

Hawaii has now entered the fray with large percentage increases and the trial lawyers saying its not them. 

In Pediatrics is an article that is certain to lead to more malpractice cases if the advice is followed.  The article talks about too many normal appendices being removed.  It has usually been the standard that if a surgeon does not have at least a 10% normal rate he/she is not operating on enough symptomatic people.  The article states that now with CT scans and ultrasounds there should be almost no normal appendices removed.  It also cites the standard morbidity and mortality from appendectomy.  It doesn't state the new statistics since the procedure is being done laproscopically.  It is another article by physicians who do not do nor have the experience to discuss the problem but know how to "save money".           Top   


The VA system is again changing its scheduling, this time for the better.  Under the new rule, those with complaints related to service connected disability will have priority in appointment making.  The VA must see the patient with in 30 days of the appointment call or send the person to another veteran facility or send outside the system.  The problem has been that in 1998 the VA was open to all veterans, not just those with service connected disabilities.  Once an entitlement is given, it is basically impossible to get it back.  The American Legion, acting like a union, has requested more money not better thought.  The budget for veteran health care is now $28.6 billion, a complete boondoggle.  I still believe this money may be saved if the veterans were placed into the Medicare program with the premiums paid by the VA.  This would give the vet freedom of choice and take nothing away from him/her.  It would get rid of the duplication of hospitals and clinics that now eat up money.  Last year the VA made a small step by denying VA benefits to those without a service connected disability and who have a high income.          Top


I wonder if the physicians ever feel like chattel?  HCA has announced they have sold three physician groups in the Kansas City area that they had received from Health Midwest.  The practices have been resold back to the physicians.  Two practices that did not wish to put out the money to repurchase themselves were closed.  HCA has kept an additional 100 primary care physicians on salary.  

In Alabama the Supreme Court will determine a staff bylaw issue.  The Providence Hospital of Mobile, Alabama, transferred its cancer center to Seton Medical Management.  The Radiology Oncologists no longer have access to the equipment at the hospital.  The issue is whether a hospital medical staff may insert its wishes into a hospital business decision when it affects negatively the physicians practicing at the hospital.  The trial court went with the hospital stating the court should not interfere with internal hospital policies of a private hospital. 

The Medicare rule changes passed by Congress may have an unintended consequence.  In the new rules is a potential for non-Medicare patients to obtain HSAs.  This potentially could lead to a large increase in concierge or boutique medical practices.        Top


Province Healthcare of Tennessee has sold it Glades General Hospital in Florida back to its original owner, Palm Beach Health Care District.  The hospital had not reached the target levels that would have made Province responsible for building a replacement hospital.  The sale is to allow the district to find a way to build a replacement hospital. 

In California the new nursing ratio rules are now in play.  The CNA doesn't like that the hospitals are using non-registered nurses to fill the void for the required ratios.  The law states that the hospitals may use up to 50% vocational nurses for ratio purposes.  The CNA has also started to monitor all wards of all hospitals for compliance.  This is meaningless since only the understaffed California Department of Health can enforce the new regs. 

The first problem related to this new law has surfaced.  Santa Teresita Hospital in Duarte, California is closing its 39 bed hospital and ED due it's inability to meet the nursing ratio law.  It will continue its long term care unit, surgical center and fertility center, areas not covered by the law.

California has severe financial problems requiring significant cuts in funding of all programs.  The Medicaid program was cut by 5% but the CMA sued to enjoin the cut.  The new governor wants an additional 10% cut in the program.  Because of the cuts two San Diego Scripps hospitals will not renew their Medicaid contracts with the state.  These were the ones in Encinitas and in La Jolla.  Other hospitals are considering non renewals of their contracts.  The state contracts individually with hospitals to care for the Medicaid patients.  If a Medicaid patient comes to the hospital after the contract expires the hospital can receive more money than under the contract for the care of that patient.  

In Indiana, Winona Memorial Hospital had lost its Medical executive Committee and had significant problems with infections control.  These deficiencies were cited by the State Department of Health in an inspection.  The hospital is attempting to remedy the deficiencies.  A new infection control person is being trained and the Board has given the CEO the power to name a new Medical Executive Committee.  There have been significant physician defections in recent years.  It should be interesting to see if any physicians are willing to risk the wrath of their fellow physicians by being appointed to the executive committee, usually an unpaid position.  

As all know by now, there is an 18 month moratorium on specialty for profit hospitals wholly owned by physicians.  This does not apply to joint ventures.  In Marion, Indiana, 40 physicians and a hospital and the hospital's parent are planning to put up a new cancer center.  The hospital will own 50%, the physicians 40% and the parent 10%.  This hospital knows how to deal with physicians as partners.  The main problem I see is the hospital does control the project by it having 50% and the parent 10%.  The two will always vote together.

Trinity Hospital of Weaverville, California, a county owned facility, needs money for a new roof.  If the hospital doesn't come up with a plan to get the needed $1.5 million in fifteen days the state will condemn the building.  They probably should close the hospital as they will be $2.7 million in debt by the end of the current fiscal year.  Think what's going to happen when the have to do earthquake preventative repairs.

There has been several deaths recently in the Boston area following laproscopic gastric surgery for weight loss.  A new one happened in the past week where the patient pulled out his et tube post-op and became anoxic.  He died several days later.  Now the state department of heath is investigating.  They have convened a panel to look at the situations and make recommendations for improvement.  I don't know if it is the candor of these institutions or the lack in others or something that these particular hospitals are doing, but I have not seen other reports of bariatric surgical deaths as frequent as being reported in the Boston area.           Top

HMOs & Insurers

A recent report has shown that health care spending in the United States now has reached about 15% of the GNP.  In 2002, spending grew by 9.3%. The main driver of the increase is medications (up 15.3%).   Thirty years ago the cost was only 7.5% of the GNP.  Of course, at that time we did not have the medications that are now available nor the other diagnostic and therapeutic advances that have evolved in that period.  The HMO revolution that was to cost contain (ration) care has been a dismal failure in all aspects and is now losing large volumes of patients throughout the country.  The only thing it did do was to allow patients to falsely believe that health care was free.  Now the new wave of the consumer paying for some or all their care has awakened the consumer as to the true costs of care.  Much of the current rapid spending growth is due to the artificial holding of spending growth in the early and mid 1990s by the HMO debacle.  It should also be noted that the HMO organizations are making excellent profits with less members.  This is done by higher premiums.

Another example of the failure of HMO to incentivize physicians is the recent Blue Cross of Western New York decision to drop the onerous withhold provisions in their physician contracts.  The physicians soon learned that the withholds were almost never paid so no one paid any attention to them as targets to get more money.  The withholds also had nothing to do with quality and only to do with rationing care and saving the HMO money.  

The difference between the East Coast and the Left Coast is evident in the recent fight in the New York legislature over an increase tax on employers who do not provide health care insurance.  In California's Democratic controlled legislature and under the previous Governor SB2 went through.  New York Republicans are a larger faction than on the Left Coast and they do not want to drive business from the state.  It looks like the move will not pass.

In Cincinnati, Ohio, the large Group Health Associates has given up taking capitation payments.  from now on it's straight fee for service.  It is a potential that the only true HMO left in many states will be Medicaid.

A recent article on WebMD states that expensive surgery is equal in both non-profit and for-profit HMOs.  This is apparently due to the HMO backlash and the loosening of the purse strings.  According to a PhD at UCLA, this is a problem since the HMOs are not doing their job in keeping down costs (read rationing care).  The study was done in M+C plans in 1997.  

Kaiser is starting to use DNA tests for HPV along with the standard Pap test.  If both are negative there will be no need to screen these women again for three years, according to Kaiser.  Kaiser will also allow women to continue to have annual Pap smears, if they wish. The idea is to get rid of the false positive or inconclusive Pap tests to do less biopsies or other tests.  

The New Hampshire Department o Health has found that they are paying too much for pharmaceuticals from pharmacies.  The answer they have come up with is to arbitrarily reduce their payments by 4% on a temporary basis.  During this time they will negotiate with the pharmacies for a permanent price.  They will pay average wholesale price less 16% plus $1.75 dispensing fee.  Currently 80% of the state's pharmacies do not accept Medicaid prescriptions.  This will remove more from the rosters.         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.