July 15, 2002 News


Managed Care


Economic Credentialing

Supply and Demand

No Confidence


Nevada did not act in a timely manner and the Los Vegas Trauma Center closed on July 1 due to the resignation of the private practice physicians.  The community hospitals will now receive the trauma victims and need to treat them without the proper equipment or trained manpower.  The physicians are quitting these hospitals as well to avoid treating the trauma victims.  If they treat the trauma patients their malpractice premiums will rise and so they are doing early retirement, leave of absence or resignations of the staff.  The high risk specialties are consolidating their privileges at one or two hospitals to decrease the on-call exposure.  The Governor had asked all parties, physicians attorneys and insurers, to  meet at get a consensus that he can bring to the legislature.  the committee has met twice and has not reached anything close to a consensus.

In the several days since the closure several trauma victims have died and approximately five others have been air lifted to out of state hospitals.  The hospital is talking to the specialists to attempt to entice them back for 30 days until a special legislative session is called by the governor.  If the doctors do come back, they will lose the leverage on the legislators.

The Nevada Attorney General has issued an opinion that those private physicians that were practicing at the Trauma Center would only be liable for the same $50,000 has the full time physician and the hospital.  They would have to sign an interim employment agreement with the county.  This would allow the physicians legal representation and indemnity from damage awards in trials or settlements.  If the cap doesn't hold up in court, the state will have to pay out millions in indemnities. The agreement would be good for 45 days.

The physicians have accepted the state offer and the trauma center reopens.  If their is no settlement by the time the 45 days expire, it will close again unless the state extends it's deep pocket.

Along with the trauma problem, the Nevada physicians are also dropping out of the state OB programs.  This is due to the rising malpractice insurance premiums that charge more for those that deliver more.  If that's the case, the physicians are going to deliver the babies from the higher paying insured population and not the state programs.

Florida's largest malpractice carrier will write no more policies for the remainder of the year.  It will only write for those physicians that are joining currently insured practices.  The physicians in Tampa Bay are starting to go bare or self insuring.  Many of the hospitals in the area will not go for the self insured program, so physicians have to make choices such as leave the state, retire early or lessen services.  The physicians are pushing the hospitals to allow changes in the bylaws to allow self insured physicians on the staff. 

This has caused the Palm Beach Delray Medical Center trauma surgeons to lose their malpractice insurance.  The six physician's insurance is paid by the District who had already agreed to a doubling of the price $950,000 per year when the company pulled out of the market.  Now the District, who so far has been unable to find insurance for the physicians, is thinking about self insuring by setting aside $1.5 million or as a last resort allowing the physicians to go bare.  They are committed to keep the trauma center open.  

In West Virginia the state malpractice insurance program is catching on.  In the past two weeks an additional 30 providers have been accepted.  There are now also seven hospitals insured by the state.  The state is required to have higher rates than private plans.

The Philadelphia OBs are dropping their practices and only doing GYN.   This has caused the hospitals to drop some of their OB programs and consolidate.  In two years seven of 39 maternity programs have closed and several more may be expected.  Even those who are remaining are cutting back on services and personnel.  

Mississippi has a cap on health insurance  premiums.  This provides a real problem of the natural law of supply and demand.  The insurers are saying ta ta. This is going to mean less companies to provide health insurance and more cost.   

In Gulfport, Mississippi the Memorial Hospital is in deep problems with 36 of their physicians potentially losing their malpractice insurance in the next two months.  This includes the ED physicians and on July 10 the nephrologists.  No dialysis and death or ship the patients to another community.    

The NY Times had a story on the physicians leaving Mississippi due to the malpractice concerns.  The physicians are closing their practices, especially in the OB field, due to the inability to get insurance.  this leaves many women with access to local OBs.  The governor has finally woken up and is calling for a special session of the legislature next month.  Top

Managed Care

Ventura County, California has been asked for a 33% increase in premiums by Blue Cross.  The County will pay and then look for a new insurer.  The County also stated they would not pass the increase on to their employees.  Why not?

Oregon has a new state law to help those who have been denied care by their insurer.  Starting July 1 the new law sets up binding outside reviews.  If the insurers do not follow the recommendations, the fines can be up to $1 million.  This is the 42nd state to put in the outside review process.  The amount of states and the recent Supreme Court decision in Moran v Rush has negated any purpose of the Congress rushing into the gap.  The new law also allows a patient to continue to see a physicians who has left the plan for  up to 120 days at the plan's expense.  It also states that gatekeepers have to have standing referrals or offer a second opinion on any denial of a referral. 

The Connecticut Attorney General is looking into a potential abuse by UnitedHealthcare of sending patients to the state for vaccines instead of paying for it themselves.  The insurer states they do send the children to the program and believes that since the program is tax supported that if the insurer pays, they are paying twice.  I don't think that the intent of the program was to subsidize the insurer.  United is sneaky but will hopefully have to reimburse the state for the costs of the program.  

As I reported last time, the Health Plan of the Redwoods is bankrupt.  The other HMO in the area, Kaiser, has stated they can not take more than a small number of the patients.  This leaves the Medicare+Choice patients up the creek.  This is another good lesson for those seniors who are looking for something for nothing,  Nothing is what you get.   

Change is good.  Western Health has changed it's mind again.  Western, out of Sacramento, was chosen along with Blue Shield and Kaiser to get the HMO contracts for CalPERS.  Western, after considering it, decided that they could not handle the volume and declined the huge volume of business. Western asked for a 23% increase and this was refused. Now the changed their mind again.  It will now participate with CalPERS but will only enroll the dependents of those currently on their rolls.  No new members will be allowed for one year.  Western also was allowed an additional 15% raise in their premiums, which had previously been agreed to between the parties.

The Wall Street Journal gave the flip side to Americans going to Canada for prescriptions.  The story was about Canadians coming to the US for medical care.  The patients are placed in long waiting lines in Canada and can get care quickly and efficiently in the US.  Some even come for prescriptions that are not on the Canadian formulary.  The patients are coming by the large busload and this is done to bring attention to the lack of physicians and health pharmaceuticals in Canada along with the lack of choice in the Canadian system.   

In the biggest managed care operation in the country, the Veteran's health service has decided to raise premiums.  If a person goes to a VA facility who does not have a service connected disability they will have to pay a higher co-payment.  This will not be true if their income is low or they have been treated since November, 1999 in an extended care facility. This begins at the end of this month.

The first Philadelphia practice to snub it's nose at mangled care has opened it's doors.  The practice has several physicians, an acupuncturist and a massage therapist.  The group will help patients fill out insurance forms to their HMOs but will collect the usual and customary fee from the patient.  The patient will get the managed care out of network payment.  Let's hope it works since the other area physicians are watching. 

The Philadelphia Inquirer reported that the eastern states of New York, Connecticut, Rhode Island and the Peoples Republic of Massachusetts have spent the most money per capital on health care and not received any better results than the rest of the country.  They do pay for more prescriptions and the academic medical centers by way of increased taxes and premiums. The Hartford Courant stated it was because the New Englanders are well insured which takes away incentive to hold down going for care.   

Massachusetts Medicaid is now warning psychiatrists about the use of multiple psychiatric medicines for their patients.  this has nothing to do with quality of care but only with the quality of money.  If the physicians do not voluntarily cut back on the number of prescriptions, the People's Republic will start to require prior approval.  That would go against the give everything to everybody state charter.  The poly pharmacy started with managed care not allowing the psychiatrists to keep people in the hospital long enough for the old drugs to be removed from the system.  The physicians then started the patients on other drugs plus what they were on.  When they went home no one wanted to mess with the combination.  

The Mayo Clinic is beginning a policy in their Florida facility that is already in place in their other facilities, making some patients pay at the time of service.  They are also stopping taking assignment on all patients under Part B.  This is due to the 10% drop in payment over this and next year.  The lack of taking assignment will allow the facility to increase their billing to the Medicare maximum of 15% above assignment.

It is sad that the HMO industry has such a low public esteem that they have had to hire the William Morris Agency as their public relations firm.  Instead of hiring the agency, they should get out of the business of middlemen with no function, except to take 20-30% of the insurance premium, pay unilaterally reduced bills late or not at all and create multiple hoops for patients to jump through.  These hoops are why the public feels so rightfully strong against the system. They create no value for the money obtained.    

Intermountain and United Health are pulling out of the Medicaid managed care arena. Both will shutter their Medicaid HMOs in the next few months.  This leaves the state with only two Medicaid HMOs.       Top


Drkoop.com is bankrupt and is selling their assets.  This includes all their patient lists.  The email addresses are going to Vitacost.com, a vitamin discount store and HeartCenterOnline.com.  So much for patient privacy and the word of the owners of the site who had promised on their site not to sell the names.

A Tampa physician, John Kilgore, didn't pay his storage locker bill.  This caused the owner to open the locker and what should his wondrous eyes see but radioactive material, patient records, narcotics and used rubber gloves.  Dr. Kilgore was arrested on a charge of felony littering and is in jail.  He also has several bankrupt businesses. The owner of the warehouse took the records to the dump after copying some of them.  The biomedical waste was disposed of appropriately.  Dr. Kilgore hopefully will lose his license.         Top

Economic Credentialing

Economic credentialing is alive and well in Ohio.  A chain of not for profit hospitals are going to exclude physicians who are investors in specialty for profit institutions.  The OhioHealth Board of Directors is planning to remove these physicians who are competing with them.  If there are other hospitals in the area these short sighted institutions may lose a good portion of their medical staff as well.  Ohio is already having a difficult time recruiting physicians due to their malpractice climate which is far more attorney friendly than its neighbor, Indiana.  Now the name calling has started along with the publicity for each side.  Most hospitals who have this happen to them are the ones who want control at all costs and are not willing to partner with physicians.    

It's a contagious Columbus, Ohio malignancy.  Mt. Carmel Health Systems has followed OhioHealth in economic credentialing.  This organization is better since it allows physicians to keep their existing investments but prohibits later ones. The Ohio State University Health System is the third major system in Columbus and it will not proceed with any economic credentialing.  This is another excellent reason why the medical staff needs their own attorney, one not paid by the hospital or system.  These attorneys have conflicts of interest that are always resolved towards the party the pays the bill.  Top

Supply and Demand

The State of Washington is continuing on it's collision course with the state's pharmacies. Starting August 1 the state will cut back payments to pharmacies for Medicaid prescriptions.  The pharmacies are stating they will not fill Medicaid prescriptions as of that date.  The cut is 3% on brand drugs and 44% on generics.  The Medicaid director is in denial and doesn't believe the pharmacists will carry through with their threats. The CEO of the state pharmacy association believes that 20% of stores will stop filling the prescriptions.  This would go along with the vast majority of Washington physicians who have stopped seeing Medicaid patients due to the low fee.  If the pharmacies do go through with the boycott, the state will attempt to utilize mail order pharmacies or provide transportation for the patients to stores that will fill their prescriptions.  Of course, that costs money and the state is attempting to save $22 million a year. If the pharmacists do stick together they can end this charade and have the state save the money not in the area of healthcare but other programs.  Top

No Confidence

Houston Medical Center medical staff in Macon Georgia has voted that they have no confidence in their elected board and want them removed.  This is over the removal of the Pathology contract from the current group and not stating why.  The chief of Surgery has stated there has been no problem with the pathology group from a medical standpoint.  The head of the Pathology group has voiced opinions in the past that the County Board has broken laws by meeting secretly in executive session, an illegal act.  This is what happens when the hospital acts unilaterally on exclusive contracts.  I feels sorry for the new group hired as they will get no business from outside the hospital.        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.