June 1, 2006 News






Electronic Records


Georgia passed a med mal reform bill last year.  A year later the rate increases are slowing. Also more physicians are coming into the state.  In the past two years there has been a 5% increase in the number of physicians. The major insurer in the state has decided not to raise rates for the second year in a row.  A new insurance company has been started in the state and is partnered with some of the physicians.  These are all good moves that came together after the reform was passed.        

An article in Health Affairs using AMA data on self employed physicians states that malpractice premiums are actually lower in 2000 than in 1970 as a percentage of practice expenses.  The study states that advertised insurance rates should not be used since there is a panoply of rates a physician may choose from.  The study ignores the fact that hospital insurers dictate the coverage of the medical staff.  This study analyzed med mal expenses actually paid as compared to net practice income and total practice expenses. Net practice income is money made less all money paid out pre tax.  Total practice expenses are all paid out.  All amount were standardized to 2000 CPI.  The study showed a raise in premiums of $416 from 1970 to 2000.  The study showed that the med mal premiums remained relatively stationary as compared to the rapidly rising total expenses (which included med mal premiums). From 1996 to 2000 premiums did increase and income decreased.  The two were not a cause and effect according to the study. The authors recognize the fallacy of their study in using regional and not state rates.  It also recognizes that some states in a region have caps which can not be detected.  The study also shows the data from the AMA stopped in 2000 but med mal premiums took relatively large hikes from 2000 to 2003 which were not included in this study. 

In an op ed piece in the Wall street Journal a PhD analyzed the med mal premiums and has come up with his reason for the high premiums.  It is that the insurance companies have to plan for the unknown.  They have no idea how many suits there will be and how much they will cost if there is no cap.  He states that some places like Philadelphia are notorious for giving high verdicts as opposed to the same case in Wisconsin.  Therefore it is the uncertainty without caps and the venue that leads to the high premiums.    Top


President Bush's phone eavesdropping plan is small potatoes next to the assault on privacy by the healthcare insurers.  They will "offer" a web based personal health record program this fall.  These insurers represent 200 million Americans.  Where is HIPAA in this??   

Medicare has done good.  Despite the rocky start in Part D, about 37 million of the eligible 43 million people now have prescription coverage of some kind.  Those who waited may have to pay a several dollar a month penalty and wait six months to join. There was no excuse for them not to have applied by the deadline and deserve no amnesty. 

In the People's Republic of Massachusetts their new healthcare for all program has some fine print.  The main one is that all will be in HMOs.  PPOs will be gone.  The HMOs will partner with health savings accounts and use high deductible insurance.  

In an interesting article, it appears that women are skipping mammograms.  This includes women with insurance.  This may be money induced.  The women have high office co-pays which they need to pay to get the slip for the test.  They may be getting confused from all the information whether mammography is good or not. 

Aetna has finally decided to pay for all the -25 and -57 modifiers that they have not paid for in the last three years.  This is part of the settlement in the class action suit by the physicians against the insurers. They were forced to do this by the physicians using a dispute resolution process forced upon Aetna in the settlement. 

The Left Coast is about to be have medical havoc.  Since United has purchased PacifiCare the negotiations with physicians has reached near record performance of no confidence.  The physicians are rightfully staying away from the offered PPO contract in droves.  The contract is offering a 40% decrease in payments which is a no-brainer to decline. The typical office has only about 10% of their patients in this plan.  It is more cost efficient to give up the plan than to keep the patients and be paid less. This will affect about a quarter million enrollees. Good luck to all the above patients.  Change insurers.  

Also California Blue Shield is having a well deserved increase in revenue and a decrease in profit and enrollment.

  Meantime California's state insured Blue Cross and the major Children's Hospital in Oakland have reached an impasse.  About 17,000 children will lose the ability to go to the well regarded institution and will be assigned to county hospitals or a significant travel distance to Stanford. Children's is also being offered and rejecting a 40% decrease in payment.  

Northern California Kaiser, stinging from it's transplant fiasco, has entered the high deductible arena.  This means they will be in competition with themselves. 

The Pennsylvania insurance companies are not happy with the State payment to them for managing the Medicaid program.  The proposed 4% increase means that they will lose money and they are not willing to do that.  The insurers do not state that the physicians are also operating in the red and have no negotiating strength with the insurers.         Top


Kaiser has officially killed its poorly done kidney transplant program.  The 2000 Kaiser members that had been transferred fro UC San Francisco and UC Davis programs are going back.  It will take about three months for the paper work and the receiving hospitals to ramp up their staffs.  The investigations will continue into the programs shortcomings and cover-ups.

Kaiser has now been told to fix their problems with their hot line in regard to the defunct transplant program.  The patients had trouble getting through and when they did they got the usual Kaiser gobblygook.  The information was wrong or not helpful.  Kaiser hired new people to man the phones and gave them scripts to read.  The Kaiser patients still have not been notified about the problems and the closure of the ill thought out and poorly performing program.  Kaiser is hoping the media will tell the patients.  Kaiser has told UC San Francisco that they will call all their patients.  Kaiser then said no they won't call but will instead send out form letters at some time.  They have 48 hours to fix the problem. 

The executives of companies in Northern California have expressed dismay in Kaiser's lack of candor and poor performance in their transplant program.  They are wondering if this lack of quality oversight may go to other areas as well.  Kaiser has a contract with The Permanente Medical Group (TPMG) to provide the physician services for its members.  They do not do much in the way of clinical quality control as would happen in a normal hospital setting. 

California has stated that 141 of Kaiser's patients that are closest to the top of the transplant list will be switched to other programs in a week.  The remainder of the 2000 patients that Kaiser screwed will be moved to the good programs shortly.  The State has appointed an overseer for the program.  Kaiser originally stated they would call all the patients and then backtracked and has sent letters so they would not have to hear the screams of the patients about their ineptitude.  

The University of Illinois is off the Joint Commission bad boys list.  They had received a conditional accreditation in its inspection due to restraints, documentation, building safety and medication storage.  They have now fixed the problems which should not have been there in the first place.   

One of the hospital's golden geese has fled the roost.  Saudi Arabia has shuttered a program that paid for its citizens to get medical care in the United States, usually at University Centers.  They blame the halt on difficulty getting US visas.  These patients pay full bore and the loss of income will hurt the hospitals.  Also the hotels for the entourages will lose money.  Currently the Saudi fund is spending about $15 million per year for care in the US.

The Physicians Hospital in Oregon will be closed and sold to Vibra Healthcare.  The physician owned hospital could not make it and may be barred from receiving fed payments.  However, see Recent Legislation to see the fate of specialty hospitals. 

A physician specialty hospital for neurosurgical treatment of spine is doing well in Tennessee.  The hospital is owned 50% by the physicians and 50% by St. Thomas Health. It is in two floors of a medical office building and is allowed to continue since it has preceded the moratorium and has followed all of CMS rules as well as piggybacked on the hospital's CON.  HCA doesn't like it but tough. They don't like anything that gives them competition.

A group of physician has spent $30 million fixing up the old Tenet Century City Hospital in Beverly Hills, California and opened it along with Salus Surgical Group as Century City Doctors Hospital.  They have 10 spine surgeons who want to do their cases there and opened the hospital with new IT and procedures learned from Salus' outpatient surgical experience.  They had no problem getting the nurses needed to conform with the stupid nurse ratio law.  They have 350 physicians on the staff and 175 are investors.  They will not have OB or Peds. 

A group of physician in Wichita have the plans to build their own outpatient surgical center.  They will specialize in surgery and endoscopy.  The surgeons have a consultant group for the building but are the full owners.  There are no competitor hospitals in the immediate area. 

JFK Hospital in Atlantis, Florida, is now paying specialists to see and treat uninsured patients.  They are paying the specialists Medicare rates per patient.  The participating physicians agree to see the emergency patients in the ED as well as the non emergency patients without insurance.  The physicians are also required to see the patients in their office for appropriate follow-up therapy.  The article does not mention whether these follow-up visits are compensated as well or the physician can bill the patient prior to the service.   Top


Hospitals are finding it more difficult to have physicians work on committees.  Those that try to force compliance by the use of the medical staff bylaws are finding their specialists leaving the hospital.  Those that pay about $125 per hour or use credits toward medical expenses or give other amenities are getting the physicians to participate with no problems. 

Pennsylvania has reported losing physicians and now an article in the Pittsburgh Business Times states the same thing about its local area.  From 1998-2004 the state lost 4500 physicians.  Only 8% of those finishing residencies in the state are staying in the state to practice down from 50% in 1994.  Pittsburgh is having trouble in the medical field but also in the architectural field and law.

Physicians are being paid for online care at a expedited pace.  Aetna, Blue Cross of Florida and Cigna are either now paying or will be paying for online consults in the near future.  The patient will be paying a co-pay of the $30-$40 payment.  The online visit must be for non-urgent matters.  Most physicians have not embraced the technology due to fears regarding security and efficiency. 

The AMA is making money but not via its having more members.  The organization continues to lose membership on a yearly basis.  The AMA gained 3300 new members but lost 500 in toto.  Therefore 3800 left. The organization has no clout with the majority of physicians in the US, who happen to be specialists.

The NY Times has an article regarding the lying insurance companies.  They talk about the companies denying they ever receive a claim when it was sent certified mail and the physician has the receipt.  The inept and crooked insurance companies cost the physicians about 15% in overhead to tract down the claim and birddog the insurers.  When the insurers do not pay on time or at all the costs get paid by the insureds in the form of higher premiums.  The physicians need their overhead covered.  The worst insurer was WellPoint, the nation's largest and most arrogant insurer.  Cigna was the worst on lost claims.  

In a major screw-up Regence BlueShield in Washington sent letters to 8000 members that there physician was no longer in the network and they need to find a new physician that is in the network.  The letter insinuated that the 488 physician that are no longer in the network were not up to the network standards.  In fact, the physicians had dropped out of the one plan but were still seeing patients for the insurer in other plans.  The reason was as usual cost, not quality. 

Canada has a new physician organization, Doctors for Medicare.  They do not like the idea that patients can get taken care of more quickly with some privatization.  They want the reforms that are needed to decrease waiting times to be within the current system.  They are not realistic about bureaucratic time frames.            Top 


An article in Medscape discusses medical marijuana.  It blasted the FDA for its awful statement on April 20 that medical marijuana has no medicinal value.  This, as hopefully all know, was a political and not a scientific statement.  The DEA's administrative law judge has proclaimed marijuana one of the safest drugs and is capable of relieving the distress in ill people.  Nixon's Commission also went against the President and found the drug safe enough to decriminalize.  The statement that smoked marijuana is a drug comes with no scientific background or support.  After being put on the spot by a Republican Representative the FDA finally stated that the "drug" needs to be approved by the FDA.  The Representative has no medical or scientific training and has the audacity based on his own narrow viewpoint to state that those who have studied the "drug" have found it helpful and safe. Even the NIH and IOM have stated that marijuana needs further investigation.  Even the FDA agreed until this last turnaround statement.  The article states that physicians are able to prescribe on a regular prescription pad Marinol, a pure THC.  The article concludes with a plea for the true study of the drug by unbiased investigators and the use of marijuana for the experiments from other than the one plot in the South at which it currently is legally grown but at low potency, as one would expect from the government. 

UCLA has found that there is no link between marijuana and lung or any head and neck cancer.  The results were presented at the American Thoracic Society.      Top 

Electronic Records

It's seldom over a month goes by when we don't hear of another theft of electronic records.  The latest and greatest is the massive theft of 26 million records maintained by the VA system with names, SSN and medical information. Since this is the government, there will be few suits.  

An article in CNN.com tells about physicians who are not getting electronic medical records because of lack of standardization and the inability to communicate with others.  The other reason why physicians are not going with electronics is the cost.  Only 11% of the vast majority of practices have digitalized records.  Some think of this as the new millennium hype where all computers were going to crash.  They are not willing to pay large sums of money for another government Anthrax scare that never materialized.       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.