March 15, 2005 News






It's that time of year in Illinois.  The legislature is beginning to "think" of malpractice reform.  The Chicago Democratic legislators are still not up to snuff with the rest of the state including any Democratic legislators from southern Illinois.  They continue to withhold caps unless there are so many loopholes that they would be meaningless. They do want something good, a public hearing on insurance premium raises.  I would think that with the Congress now in control of the Republicans and the President pushing tort reform, they should want to go with the wave.  See next story.

The Association of Trial Lawyers is beginning to run scared. They have asked for a meeting with the AMA to seek common ground for tort reform.  However, in the public letter he wrote asking for the meeting, he continued his saber rattling to appease his troops.

Three law schools have looked at the med mal situation and to no one's surprise found that the cause of the increases in premiums had nothing to do with lawsuits.  Would one expect anything else from law schools?  They state the increase in payouts is consistent with inflation and any major increase is due to the insurance companies market dynamics.  They leave no room for the possibility that both may be at play.    

The Boston Globe has a story regarding the patients in hospitals that are injured and do not sue.  They cite a 1 in 15 injured patients sue and only 25% of those ever receive money.  Of course that's all that deserve the money.  The "news"paper goes on to cite a tragic case that no attorney firm would touch.  I wonder why that is?  Could it be there is no proof that anything was done wrong that caused the injury?        Top   


Drew/King is continuing in the news.  Since they lost their JCAHO accreditation it has also been found they are negligent in patient privacy as required by HIPAA.  This is to be added to the long list that needs to be fixed in order to regain their accreditation.  I also might add here the dumb physicians and public who attempted to sue to stop the changing of the poor hospital have lost their court battle. There was no standing of the individuals to sue to stop the closure of the trauma center.

In Willie Sutton lingo "Follow the money". The hospitals want money from all sides.  They are with the physicians albeit silently in the malpractice arena and are against them in the specialty hospital scenario.  They have petitioned the HHS to not allow the whole hospital exemption that is currently on the books.  This is up to Congress, not the HHS, since the current law allows the exemption except for the moratorium. 

MedPAC has recommended to Congress that the moratorium of specialty hospitals be extended while it studies the impact of the specialty hospitals on community hospitals.  This is what they were charged to do at the beginning but failed to do.  It also recommended a change of payment policy to more accurately reflect the true cost of care.  If this is done then it should be done for all hospitals and not just specialty hospitals who can do the same procedure more efficiently and cheaper.  To date there is possibly no proof of any harm to community hospitals by the specialty ones. 

I'm not sure it's the physicians but the hospitals that are paranoid.  They do not want competition.  In Lebanon, Tennessee, the only hospital in the county is fighting to keep its turf.  HCA wants to build a ambulatory surgical center in the area and the hospital is using the same old tired comments as most hospitals do when the can not compete on quality, "They are going to skim the best patients."  These hospitals can not compete and will not work with physicians.  They are therefore open to competition or having to cooperate.  The city wants the competition to increase the care in the community.  HCA will sell 49% to the local surgeons.  The hospital never offered that to the same physicians.  

Hospitals have been given their guideline for reporting in house infections.  The CDC has issued moving guidelines that ask states to work with infectious disease consultants to adhere to established surveillance and give confidential feedback to providers.  These guidelines are now voluntary but Illinois, Pennsylvania, Florida and Missouri currently have compulsory reporting by hospitals to the public on their infections rates. 

The Carolinas Healthcare System of 10 hospitals owned and an additional 6 it manages has purchased a 60 person cardiology group to provide cardiac services.  Terms were not disclosed.  This means we know what they are but we don't know their price.

In the reverse of the above Ocean Radiology, a group of 11 radiologists, have left their exclusive contract with Lawrence and Memorial Hospital in New London, Conn.  to open their own shop.  Almost every physician in the community uses Ocean's services.  This is a typical example of all or none by the hospital.  Ocean was going to set up an outpatient clinic and wanted to continue a partnership with the hospital.  The hospital wanted to retain control and so the physicians left the hospital in the lurch.  The hospital is now looking for a new group of radiologists to start in August with little backing of their physicians.  The hospital predicts this may cost them up to $18 million over five years.  They need a new administrator.    

In Lenexa, Kansas, the physicians are putting up their own full service hospital to the chagrin of three other hospitals who want to expand into the area.  The Kansas legislature has on the docket a bill supported by the hospitals to ban any new hospitals in the state except for critical access hospitals in rural areas. 

Congratulations to Kaiser hospitals.  They have gone from money losers to a huge money maker in five years.  In the late 1900s they were losing money and the physicians in their contracts got no or minimal bonuses.  Now the organization has 5.3% operating margin.  The reason is their double digit price increases over the last few years as they had artificially kept their prices down earlier.  They also kept a tight rein on their expenses with less money on pharmaceuticals and lower worker comp costs and liability expenses.  They continue to spend on new construction and increased their spending on electronic medical record systems.  They also increased their membership by 20,000 as CalPERS took away private hospitals from their panel.  Now, what will happen to their proposed rate increases?      Top


The JAMA reported that report cards may have unintended consequences for healthcare.  The article stated that some hospitals or physicians may avoid sicker patients to keep their scores up.  This is based on a 1997 New York report on surgeons that stated they admitted avoiding sicker patients to avoid lowering their scores. There are no reports on the bettering of healthcare by the use of scorecards.  

There are conflicting views as to how pay for performance if utilized by the Feds should be figured.  The MedPAC suggests that 1-2% should be withheld from all physician payments so there is a pool to pay those who follow the performance indicators.  The AMA wants the physician to be able to opt out and the program to focus on quality improvement.  MedPAC feels that there can be no improvement without purchasing or upgrading IT.  This is in spite of the fact that a recent study showed a possible deterioration of care with electronic records.    

The Michigan Governor has proposed a tax on physician's gross receipts so the state may collect more money from the feds to pay more to physicians.  If this sounds confusing, it is.  Five other states have done it and four have either significantly modified it or dropped it.  Only the home of HHH continues with the tax. The medical society believes this is not a medical problem but a societal one and that all should pay.  The state hopes more physicians will see Medicaid patients if they are paid more money.  This has not been the case in the other states.       Top 


In Tennessee, there is a continuing impasse between the Governor and the advocates for TennCare, the more inclusive Medicaid in the state.  The state can no longer afford to continue with the program as currently structured.  They either need to disband the system and return to standard Medicaid or reduce the number of people that the program covers.  The advocates are suing to prevent either and the program gets further mired in debt.  One person has suggested a potential solution.  If the state switched its pharmaceutical formulary, it may be able to save enough money to salvage the entire program.  In the meantime the Governor has released an alternative budget switching about $191 million from education to TennCare. The alternative budget would also eliminate pay raises for all government employees and teachers.        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.