September 15, 2004 News


Money Issues


Medical School




Money Issues

The Los Angeles hospitals are starting a campaign to have the sponsors of legal immigrants be responsible for their sponsoree's hospital bill.  It is illegal to not collect money from the sponsors.  The sponsors sign a affidavit of support that promises to pay for any public services received by the immigrant if the immigrant can not pay.  The flip side is that the hospitals would have to have the name of the sponsor thereby asking immigration status, something that hospitals do not want to do.    

Medicare has announced a 17.3% rise in Part B premiums.  This will mean the basic secondary insurance will cost $78.20 per month.  The Part A hospital deductible will rise 4% to $912.  The outliers will also pay more if they don't have secondary insurance. 

The New York Times stated that the increase in premiums may make more seniors give up their independence and go to M+C plans.  The premium paid monthly to Medicare is the same in both traditional and M+C plans.  The plans then can charge more or in rare occasions refund some money to the seniors.  There still has not been any rush by insurers to get back into the M+C plans which will continue to limit access in many counties. 

In Washington State, the uninsured are becoming more of a problem for the hospitals.  Charity care has jumped 50%, putting more pressure on hospitals that wish to upgrade their facilities.  The State has taken 28,000 off the health insurance rolls in 2002.  Almost all of them were children.  The hospitals are attempting to make up the shortfall by increasing fees to private insurers and patients.  That is easy to say but harder to do.  The hospitals in reality are looking for continued economical improvement leading to more jobs. 

All the HMOs in Massachusetts with the exception of Blue Cross/Shield have kept the price of M+C plans the same as last year.  No one is rushing to join these poorly designed plans.  The reason is that the price is only to January, 2005.  Then, I believe the rationing organizations will again increase the premiums.

In past issues of, I have berated the Massachusetts hospitals and their Health Department for the deaths in Bariatric surgery.  The Boston Business Journal now reports that it's not only the patient's gluttony but also the hospitals that are factors.  With each surgery garnering up to $35,000 the more you do the more you make.  The hospitals state they may make a little on the surgery because Feds don't pay for the full cost.  There are now over 2700 operations done annually in the state.  Maybe, in the rush to do the procedures the patients weren't screened as well as they are in the remainder of the country.  

There are complications from all surgeries and especially those who are morbidly obese.  These complications on the gastric bypass can run as high as 10% with a 3% return to the hospital and a 0.5% death rate.  The surgery also costs alot of money.  One always wants to know the truthful reason of why insurers like the Blues of South Carolina have removed the procedure from its covered list, quality or money.  All know that insurers have never been interested in quality unless it saves them money.  The surgery , if successful, will save a significant amount of money later on for the health care of these obese patients.  

The Methodist Medical Center in Des Moines, Iowa has stopped its bariatric program due to the large increase in malpractice insurance rates to cover the program.  The cross town rival Mercy Hospital is happy about the decision as their program continues to go strong.  There have been seven deaths from the procedure in Iowa and seemingly all by the same surgeon, who is now in Ohio.

Money in the name of quality.  Two general hospitals in Alabama are fighting over who is going to get the lucrative cardiac surgery.  Currently Brookwood Medical Center has had the inside track.  However, a judge this summer overruled a denial of a CON to Baptist Shelby Medical Center.  Shelby got one of their top cardiac surgeon from another Baptist hospital and started doing cardiac surgery.  Brookwood filed a suit to stop the surgery until a full appeal could be heard.  Brookwood would delay that hearing as long as possible by filing multiple briefs.  It should be the hope of all who believe in free market and competition that the judge will deny the TRO.  The feds have also decried the use of CONs as a detriment to competition and innovation.   

The Wall Street Journal had an article about the high price of chemotherapy drugs.  The article stated that money has now become a staple of the discussion with patients regarding the trade off of the cost and benefit.  One oncologist did not do himself proud by stating that the high prices are not justified because the drugs only give a short few months to the patient and are not a major advantage over the older drugs.  The first thing is that it is the patient's choice and not the physicians as to whether the few extra months are worth the cost and the second reason the statement was wrong is that the drug is expensive not because it only works minimally but because of the cost of development. 

Oncologists now state the reduction in Medicare payments for chemotherapy drugs will come close to 15%.  This may not cover the costs of some drugs.  The numbers revealed by ASCO did not include the increase in administration fees paid to the physicians. The government will start funding prescription drugs in 2006.

A new study has shown that employer sponsored health plan premiums have jumped 11.2% in 2004.  This is 2% less than 2003.  The higher premiums means that less people will be covered by their employers for healthcare insurance. 

In one of the recent past issues I talked about the HMOs going back to their restrictive rationing  of care by restarting their gatekeepers.  Now the Milwaukee Business Journal has an article about the demise of the gatekeeper in their area.  The larger HMOs in the area have given up on the concept and the last one has just followed suit.  The article states that most employers and people have rejected the HMO movement and are now into PPOs.    Top


Drew/King, the bastion of good care (tongue in cheek) has now looked at another Orthopod.  In the end of August they miraculously found one that had sold his own device to the hospital for mucho bucks for the use on his patients.  Now, they find another one, the director of the  orthopedic surgery training program, has falsified his time cards and referred patients to his private practice.  They sent a letter of termination to the doctor who will appeal the termination and will continue to work until the appeal is completed.  It is interesting that the orthopedic residency program is also being terminated which will probably force the county to pay major money to hire new Orthopods to keep the hospital's ability to treat orthopedic patients.  

In Salem, Massachusetts, an ED physician accidentally left a pistol in the men's room when he hurriedly left to speak to another physician.  The gun was found and turned over to security.  The physician has a permit for the gun and has done nothing illegal.  The hospital has suspended him for the incident for two weeks to allow an investigation by the hospital and the state board. The hospital does apparently have a policy that there be no weapons of any kind on hospital grounds.  The doctor was not aware of the policy.  

In Connecticut the OBs have scrapped the plan to place a $500 surcharge on deliveries to pay for the malpractice premiums.  The reason for the reneging is that health insurers are raising their fee to pay for the higher costs.  This will translate into higher premiums for all in the state.      Top

Medical School

The former Chicago Medical School, the former Finch University of Health Sciences and now the Rosalind Franklin University of Medicine has lost its entire Board of Directors except for one.  She became the Chair.  The medical school had been placed on academic probation for 24 months to strengthen relationships with hospitals and decrease the student debt load.  The school was also named in a whistleblower suit naming two prior Board members pressuring a local hospital to use their construction firm.  A new Board of up to 24 people will be appointed.      Top


In Ohio, the physicians and hospitals are together in attempting to elect to the Ohio Supreme Court three Republican justices that could swing the malpractice situation to their side.  The current court has in the past overturned medical tort reform passed by the legislature.  There are new bills passed by the legislature that will come before the court next year.  The trial lawyers are backing, of course, the activist Democrats.  

The Maryland physicians are handing out postcards for their patients to send to their state legislators to help keep their physicians in practice.  They hope this grass root movement will help turn the tide but in case it doesn't they have formed a PAC.  This is to focus on the defeat of any legislator that does not embrace tort reform.  This includes prescription pads with legislators names that the physicians want in the legislature. 

In Connecticut, a poll commissioned by the Medical Society found that the residents did not want caps on non-economic damages.  This should tell the Society that they need to do a better job in getting their message out.  Since those polled had not had a problem finding a physician or a specialist for themselves, they weren't worried.  The legislature recently passed a bill with no caps but only oversight on the carriers, which will be helpful except in a state where the carriers are major contributors.  (See story in New Legislation)     Top


The preliminary report commissioned by the MMA that put the ban on specialty hospitals state that although there may be some conflict of interest, the specialty hospitals do not seem to be a long term problem for community hospitals.  The specialty hospitals provide the necessary wake up call for the community hospitals to improve services and efficiency.  The final report is due in March 2005.  The study is being done in three non-CON areas; Austin, Texas, Sioux Falls, ND and Manhattan, Kansas.

It is amazing the spin placed on the same report by the different industries.  The AHA stated that the report agreed that the specialty hospitals were taking all the good patients and that the moratorium would be extended.  The wording of the preliminary report stated nothing about the length of the moratorium.

Physicians are saying if the feds won't let us build specialty hospitals, we'll do general ones and take the business away from the original ones.  This is mostly in Texas where the rules state that a general hospital is one that has two or more unrelated services in a 24/7 setting.  This is enough for a new hospital and medical office building is being developed in Houston.  The hospital will have a full service ED, eight ORs, an imaging center and 105 rooms, 70 of which will be private and the remainder for long term. 

A specialty hospital will also be developed in Houston.  It will be an neurological and orthopedic hospital that was grandfathered in.  The hospital will be 65 beds and 10 ORs plus an adjoining medical office building.

In Dallas, there are two new hospitals being built by physicians.  The first on is a 20 bed one with ORs and a heart cath lab.  The other one is is a 18 bed hospital.  That one will have 4 ORs and a diagnostic imaging center with ortho, sports medicine and oncology surgery. 

The Los Angeles 225 bed Midway hospital has been purchased by the physicians from Tenet for $10 million.

However, there are perils for all hospitals and physician owned ones are no exception.  In Indiana, the Winona Memorial Hospital lost its main financial backing the will close.  This is a physician owned hospital that has been in business for many years but has only been physician owned for several months.  

Even large non profit hospitals are closing.  In San Jose, California, the HCA run San Jose Medical Center has announced it will close in December.  It has been there for the past 80 years.  The reason is higher wages and more uninsured patients.  The hospital had to spend an additional $16 million to comply with the seismic upgrades and the ill thought out nurse patient ratio promulgated by the militant California Nurse's Union and their Democratic Allies in the California legislature.  The bill was then signed by Democratic Governor Davis. The nurse's union, one of the reasons for the closure, states it's corporate irresponsibility that is the cause for the closure.  They are right, but it's their corporation.  

The hospitals and physicians are getting many more scheduled C-sections.  The rate is at an all time high 26%.  This may mean more problems for attorneys since they will have less bad babies to deal with although there is a higher rate of respiratory problems with those delivered by C-sections.  The hospitals aren't complaining since they get about $4500 more per section than per delivery.  The ACOG state the section is ethical if only for convenience.  Some hospitals are banning the VBAC procedure as too risky.   

King/Drew continues in the news.  This time the Board of Supes has finally done something right and not politically correct.  They have taken the bold step to save resources by closing the trauma service.  This service, although needed in the highest crime area in LA, is a financial drain on the remainder of the hospital.  The only way to continue with the hospital as a functioning entity is to relieve some of the pressure.  The ED will remain open.  The other thing the Board did was to comply with CMS requirement to hire outside managers to run the hospital.      Top


Florida Hospital-Ormond Memorial fired or suspended 25 nurses for not showing up during Hurricane Francis and not calling in.  Of course there was no telephone service in many areas.  No other hospital in the area fired or suspended nurses for not working during the storm.  If there is a union representing the nurses, all will be dropped and the nurses will be fully compensated.  If there is not a union, then the hospital will be short nurses in the future.  The nurses can always find other jobs.        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.