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Medical Staffs Need to Be Alert
In this issue's Legislative area I write about a new threat
to California's peer review process. In the May 1, 2001 issue in the legal
section, I wrote about a South Dakota Case that had significant implications for
medical staffs. I am sure that many said that could never happen again. We're different. We get along with our hospital
administration. I am placing in quotation marks an Email sent by a law
firm in an Eastern state. Please read it and tell your staff about the
threat. Physicians need to belong to several medical staffs so this type
of injustice will be thwarted.
"I am looking for guidance, policies, or other helpful tips to develop an
economic loyalty credentialing policy with respect to medical staff
members who have financial conflicts of interest with a hospital.
Thanks in advance."
I then spoke to the Medical Director of the hospital in question, a
practicing surgeon. He states the medical staff is for this economic
credentialing and has a good relationship with the hospital. The hospital is the
only one in a town of 30,000 and the hospital and medical staff are afraid that
another hospital will come in and start to use the hospital and later siphon off
patients to their home hospital. The outside hospital has apparently done this
in another nearby hospital. The physician I spoke to said that even though
this threat is in another state and 30 miles away they advertise heavily in the
area and patients are currently going there. The hospital and local physicians
also have a PHO whose governance is equally shared and are afraid of that being
eroded as well.
I suggested that they look to the future when the hospital and physicians are
not in simpatico and some of the local physicians wish to put up a competing
surgical center or other economic entity for their benefit and would be forced
off the staff. They should also look at themselves and ask why patients
are leaving their community and why they are afraid of the
competition. I also suggested strongly that the medical staff hire
their own attorney to review the wording prior to adoption. To me, this is
the worst form of economic credentialing. The states that by statute restrict
the ability for economic credentialing are California, Colorado, DC, Idaho,
Illinois, Louisiana, Massachusetts, Rhode Island, Texas and Tennessee.
Those states that specifically allow economic credentialing are Georgia,
Florida, Indiana, Iowa, Kansas, Maryland, New York, North Carolina and now by
judicial decree S. Dakota. The remainder of the states are silent legislatively
on the issue.
If this doesn't scare you, you are either a person
near retirement or on the payroll of a hospital. Top
Massachusetts physicians are facing a large malpractice premium increase. The largest carrier in the state is raising rates across the board an average of 14%. Radiologists, with their new invasive components and mammography are getting a 40% increase. This is on top of the story in my May 1 News regarding the difficulty recruiting physicians due to low reimbursement and high cost of living. OBs now pay $70,000 but are getting a 20% raise. Family Practice is going up 33%. The plaintiff attorneys are stating this is just a scare tactic and the raise in premium is not due to more suits and higher verdicts but higher profits. There is some truth to both sides since the carrier is relatively new and lowballed to gain market share and is now making up for that bid. Top
HealthNet is dropping Community Medical Group of Corona, a group owned by Dr. Chaudhuri. Dr. Chaudhuri was the leader of the ill fated KPC which went belly-up leaving 250,000 patients without physicians or medical records. PacifiCare dropped the group earlier in the same week.
Physicians in the St. Petersburg Florida area have rejected the Blues contract offer. This includes 34,000 subscribers. It is interesting that the Blues want to have individual contracts with physicians and not their IPA. The Blues state this is not a divide and conquer tactic, but of course it is. They are also no longer offering capitation but only fee-for-service. The fees will be for about 90-95% of Medicare fees. The Blues believe that they may lose about 70 primary care physicians and even though many of the rest of the physicians are not accepting new patients, they feel they will have no problem relocating patients. Time will tell. The power of the patient and the bond between the patient and their primary care is all important. Watch for a significant change in the statements. Top
A small HMO, Western Health Advantage, is getting a contract with the second largest payor in the US, after the us government. CalPERS signed a multiyear contract with Western to care for those patients from Aetna, Cigna & Lifeguard who have been dropped by CalPERS. The HMO is owned by U.C. Davis, Mercy Hospitals and NorthBay in Fairfield. It looks like this will be one of the few hospital owned HMOs to make it, providing they can subsist on what CalPERS pays.
In the meantime Stanford University has decided to drop money losing HMO capitation contracts. Stanford has notified patients that on January1, 2002 will drop HealthNet, Blue Shield, Aetna, Cigna, and PacifiCare. They state they have notified the patients this far in advance to allow them time to change insurance companies if negotiations with insurers do not resolve differences. The hospital will lose $70 million by 2002 but could save $15 million by renegotiating or dropping the contracts. They have also closed their hospice and outpatient pharmacy Top
In El Paso, Texas two new physician owned specialty hospitals have opened. One is an outgrowth of an outpatient 27 bed surgicenter with 31 acute care beds added. It is owned by a group of orthopedic surgeons. It also has gourmet food and satellite TV for the hospital patients. Another 40 bed hospital is soon to open owned by 20 physicians. This hospital will also be hotel-like in operations. These will threaten the existing hospitals by taking away many of their best admitters. The hospitals are also getting the appropriate contracts. It's nice to see entrepreneurship is not dead. Top
Shorter Bypass Stays Not Same as Savings
A study in the May Journal of Thoracic and Cardiovascular Surgery states that those with shorter hospital stays after bypass go to extended care facilities for a significant time negating any saving on costs. Also a significantly greater percent of patients needed rehospitalization. Top
Kaiser has begun the turnaround by reporting earnings of $562 million on sales of $17.7 billion for year 2000. In the first quarter of 2001 they report earnings of $185 million on revenues of $4.3 billion. They state it is do to improved revenues and increased efficiencies. Top
Podiatrist Going Down to Defeet
Podiatric schools are facing a shortage of applicants that is becoming significant. Some of this is the good economic times in the recent past and students not wishing to take an additional six years and the associated debt. There are only seven schools of podiatry in the US. The school losing ground the fastest is in San Francisco. This is in a high rent area and also near to Silicon Valley. There are also the regulations of how high a podiatrist can go in the treatment of a patient. They range to above the knee to only up to the ankle. In Ohio they also can treat wrists and fingers. In 2001 the OIG has Podiatrists on their periscope for billing compliance. Top
Fresno continues to amaze. First, St. Agnes was removed from PacifiCare's hospitals due to concern over the viability of the Matrix medical group. All patients including the county employee patients were transferred to Community Hospital and their physicians. Then a judge forced a new open enrollment for the county employees to allow them to stay at St. Agnes. Now, Kaiser has signed a letter of intent with St. Agnes for their cardiac services. This is in place of the current contract with Community. This should help the loss of the $32 million PacifiCare contract and hurt the $32 million gain of Community. Top
Mayo clinic used to have three provider owned HMOs. They had one in Florida, Minnesota and Arizona. They closed the Minnesota one last year and now the Florida one is gone. They believe the Arizona one is not far behind. 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.