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CalPERS has approved an average 17% increase in premiums from
its employees. The actual raises range from 15% for PERS-Choice Basic to
22.4% for PERScare Basic. This increase was necessitated by the increased
premiums being paid to the managed care organizations.
In a related story CalPERS has seen its drug costs rise in the first
quarter in spite of an increase in co-pay. Remember how
managed care was going to reduce the cost of care.
Wrong! I just finished reading a new book called The Rise and Fall of
Managed Care by Richard Dean Smith, MD. The book, published by Wyndham
Hall Press, gives Dr. Smith's vision of what allowed the managed care revolution
to occur and what forces are leading to its destruction.
Dr. Smith is not alone. In a recent JAMA article Dr. J. Robinson of UC
Berkeley wrote in an article "The End of Managed Care" that the tight
reins are loosened and that consumerism not HMOs will define healthcare. He
feels that consumerism will also go worldwide. Dr. Robinson stated that the
traditional HMO "has been so completely demonized that it will be
impossible to sell that product in the future".
In the same vein but from a more unlikely source Dr. John Rowe, the
CEO of Aetna, stated "that Aetna must let physicians provide
care without asking the insurer's permission and must give patients greater
choice in medical care if it wants to compete". This did not go well
with Aetna investors who have seen profits shrink. Rowe has started to cut
costs by letting people and unprofitable customers go.
In a different vein Kaiser has begun a new pilot program to look at heart disease risk via a long questionnaire that patients will fill out prior to seeing any physician. This is to judge risk according to family history and will hopefully increase the benefit of the allotted time between provider and consumer. Kaiser hopes to expand this concept to other "genetic related" diseases such as diabetes, cancer and osteoporosis. Top
In a just released study in the NEJM an outbreak of serratia liquefaciens in fifteen patient in a Colorado dialysis unit was traced to a break in procedure. The employees, trying to save money, placed the leftover Epogen from each patient into another vial and used the pooled drug for other patients. Following the intravenous injections the patients came down with the infection causing chills and fever. they were all successfully treated with antibiotics. The vials had no preservative to protect it from bacterial contamination but did have a one use label. the manufacturer always placed a little extra in each vial since not all could be retrieved by a needle and syringe. Top
In Contra Costa California the two largest hospitals are under the same corporate umbrella. John Muir Medical Center and Mt. Diablo Medical Center merged their corporate structure about five years ago. The medical staffs have remained separate but the administrative positions have been slowly consolidated to one for both institutions. The first real consolidation has now been proposed by the System Board. This would entail the closure of OB at Mt. Diablo and shifting it to John Muir. John Muir does about 3000 deliveries per year as compared to 800 at Mt. Diablo. This would free up nursing and anesthesia for other matters. The plan is coming under fire by the community because people tend to get their medical care where they enter the system. One of the usual entry places is on delivery. An argument against this is that people go where their insurance says they should go. If the insurance companies say that Mt. Diablo and not John Muir is the preferred hospital they will go to Mt. Diablo for all services rendered. If the hospital can not provide the service they will go somewhere else for that service. The other problem is the nurses union at Mt. Diablo will see potential cuts. This is particularly bothersome since John Muir is a non-union hospital. It is my opinion as a retired physician from both institutions that some of John Muir's patients will be sent to Mt. Diablo. The cardiac services are a potential candidate. Mt. Diablo does many more procedures per year than John Muir and has better mortality and morbidity statistics even though the same surgeons do the procedures at both institutions. As this was going to publication the Systems Board bowing to public pressure did not vote to move Mt. Diablo OB to John Muir. Instead it gave time to bring the Department into line fiscally.
U Mass Hospital Problems
U Mass Memorial is in big trouble. They have hired the infamous Hunter Group to turn the tables. Hunter Group is known for their ability to do the turn around but usually gets rid of all administrators including the CEO and puts their own people in place. They are to look at executive management of expenses and the physician practices. Last year the hospital lost $49 million and to date this year $15 million. UMass must reduce expenses by $87 million this year and is $26 million short of that goal. Top
Blue Cross/Shield and the AMA have issued joint guidelines for the role of participating physicians in health plans. The ten guidelines are (1) participation of participating physicians in clinical decision making committees, (2) credentialing should be by committees with significant representation from participating physicians with fair appeals processes for terminations, (3) clinical guidelines and protocols should be made with all specialties involved, (4) no gag rule, (5) members get timely appeals with participating physicians of the specialty under dispute, (6) peer review protection at all sites of care, (7) participating physicians are involved with data collection and interpretation so the information will be meaningful to all physicians, (8) participating physicians are involved in identifying and developing quality assessment, (9) all physicians should be told who their representatives on the various committees are and can voice their concerns to these intermediaries, (10) physicians working for the committees are indemnified and possibly paid by the plans.
Stanford, About Face
Stanford is now considering the continuation of contracts with some HMOs. Within the past month they stated they were losing money on all their contracts and could not make it up in volume. Now, they say if the HMOs pony up more money they will re-contract with them ala Sutter and Blue Cross. The interesting part is that the HMOs may need the tertiary center more than Stanford needs the money-losing HMOs. Top
Jefferson Health System in Philadelphia has begun the lay-off cycle due to rising costs. It is projecting an $2 million shortfall for the fiscal year ending this June 30. The rising costs are part due to increased nursing salaries but more importantly by a 50% increase in their malpractice insurance premium. That, people, is an increase of $16 million. Pennsylvania is now undergoing the ritual chants by the medical profession and hospitals that we need legislative relief and the trial lawyers stating not in my backyard.
In West Virginia, Medical Assurance, a malpractice carrier, has routinely charged three times the legal rate for coverage by having the physicians agree to them . The physician contracts are illegal in West Virginia. Medical Assurance will not renew current policies when they expire. It insures about 1/3 of the state's physicians. It is also the preferred provider for the Medical Society and is paying a secret $115,000/year to the society for promoting their company. I suggest that since these contracts were illegal they are voidable and if they were claims made the money should be returned to the physicians. If I was a physician in West Virginia I would also want a new staff at my State Medical Society. This is the same scenario as 1975 in California when the insurance companies left the physicians high and dry. This led to the stoppage of the practice of elective medicine in the State which directly led to MICRA. Top
The Office of Inspector General (OIG) issued a report on May 18, 2001 that over the past ten years only 1000 adverse action reports have been filed by managed care organizations. They liken this to no reporting at all. This is common practice with managed care outfits like Permanente Medical Group. As part of the binding arbitration it is stipulated that the person complained about is dropped from the case and only the parent company remains. If there is no complaint against a physician no report need be given. Top
Conversion to for-Profit
Maryland's not-for-profit CareFirst Blue Cross Blue Shield is attempting to change to the California for-profit Wellpoint. The physicians are not happy since Wellpoint is being sued by three state medical societies. Maryland has a law regulating the rate setting for hospitals and it is unlikely that any significant prescription plan reduction will be enacted. The physician wonder, and rightly so, where any cost saving may come from. Top
The New York Times details the new trend among
physicians, movement. There is more job hunting now that ever before. The
statistics have gone from 1-2% movement prior to 1990 to more than 10% now. The
trend is in the younger physicians since the older ones are retiring and the
middle aged ones are leaving medicine for other fields (like healthcare
consulting and law).
Another reason for physician nomads is the lack of purchase of their practice by
hospitals and other organizations. Last year only 3% of practices sold
were purchased by hospitals, a significant change from the 46% purchased three
short years ago. Of course, the PhyCor debacle does not
help.
Top
In an article in the Tampa Tribune a story about the dissolution of Blue Cross and a local IPA has caused the switch of about 10,000 commercial consumers (patients) from their primary care providers (physicians). The dispute centers around an approximately 30% decrease in PPO payment to the physicians. Blue Cross has gone after the individual physicians which is allowed under the antitrust rules and most have signed. There have been some glitches in the switch such as having men see gynecologists for their PCP and keeping people on hold for 30 minutes and then disconnecting them. Blue Cross states these are problems that are "easily correctable" In a really dumb statement the vice president of care and quality management stated that "the bond between doctor and patient is not intended to be a lifelong relationship. Our job is to make sure members have a physician." Managed care organizations wonder why they have such an image problem when they hire people like that.
In a follow-up the physicians in the above story caved in to the Blue Cross/Shield demands and signed. There were about 35 physicians who had refused the terms. I am sorry to report their spine transplant was rejected and their wallets won out over their principles. Top
In the May 15, 2001 News I listed a story on Dr. Chaudhuri and his IPA being delisted by managed care organizations. Dr. Chaudhuri has now sold the troubled Corona medical group to Corona Family Medical Group. The new owners are hopeful that HealthNet, PacifiCare and Blue Cross will return. The original Corona medical group is being sued for non payment of about $600,000 in disputed surplus HMO did not pay for hospital services. There was an agreement that the two organizations would split the profits or losses. The buyer is Dr. Ghassan El-Abdallah Hadi who was accused this year of professional incompetence and accepted a public letter of reprimand. Hadi wants to eventually sell the Group to the physicians. Top
The first hospital in the United States, Pennsylvania Hospital in Philadelphia celebrates its 250th year. The founders were Ben Franklin and Thomas Bond MD. Patients had to be sponsored by two taxpaying citizens to ensure burial expenses and transportation from the hospital to the house, if they lived. Until anesthesia was available in the 1840s surgeons got their patients blind drunk or hit them in the head to numb them. A typical menu was breakfast meal gruel lunch a half pound of potato and a half pound of meat and dinner was a pint of beer. In 1790 a banker paid to admit his wife to the hospital and to keep her there after she was cured (no HMOs). The first resident was Jacob Ehrnzeller who was at the age of 16 indentured to the hospital for five years and three months. He was forbidden to fornicate, play cards, buy or sell goods or run away. Many things have not changed. Top
Hospitals are pressing Congress to renew a visa program allowing more nurses to immigrate to the US. the special visa program was initially passed in the late 1980s but allowed to expire in 1995. With the major shortage of nurses present this would help hospitals to recruit nurses until the shortage caused by managed health has improved. A spokesperson for nurses in the SEIU states this is bad since it doesn't fix the underlying problem of poor working conditions in understaffed hospitals. This person's solution is not to get rid of the understaffing but to give nurses a greater voice in hospital decisions and banning mandatory overtime. Sounds like the union mentality. Top
The Daughters of Charity want a divorce from Catholic Healthcare West. The Daughters want back Seton, Seton Coastside, O'Conner and St. Louise Hospitals of Northern California. They also want back three Southern California hospitals. This will throw a snag into CHW's attempt to dig itself out of the financial hole that it dug. This divorce is early and mediation or reconciliation is always possible. Top
Some the the major cancer centers are limiting outside patients ability to get second opinions at their institutions. Since it is very time consuming at not money efficient second opinions may have to wait until all initial patients are given priority. Also the clinics state that if there is only so much time to see patients, they would rather spend that time trying to help patients who have not had a treatment recommended. This is happening at Mayo Clinic, Sloan Kettering and M.D. Anderson clinics. 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.