E-DMN - January 2, 2008

January 2, 2008

Editor's Column: Taking TRUST On FAITH
Oakwood Posts Pricing Info
Bush Signs SCHIP Extension
President Approves HHS Spending Bill
Oakwood Wins Quality Award
Four States Make Major Med Mal Moves
Obama, Clinton Spar On Health Care

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Editor's Column: Taking TRUST On FAITH

By JOSEPH WEISS, MD
By now, most physicians in Southeast Michigan have received a copy of BCBS’s Trust Network Practitioner Affiliation Agreement. You need not read past page two to learn all that you are required to know. The wording, done in the “courtly” manner of legal contract writing, states that the TRUST agreement covers benefit plans sponsored by BCBS, and the next page states that BCBS sponsorship means:

“a. Self-funded administrative accounts of BCBSM for which BCBSM provides any one or more of the following administrative services: utilization management, quality assessments, reviews, audits, claims processing system or cash flow methodology.”

The contract is really stating: “What BCBS has put together, let no man (or physician) tear asunder.” We are being forewarned that any combination of deductibles, co-pays, prior authorizations and limitations that BCBS creates as a contract or as plan administrators, we must abide by. The TRUST agreement so binds us.

Likely, we won’t wait long to learn the consequences of putting our faith in BCBS TRUST. The street talk says that BCBS will administer the health care benefits coming from the UAW’s $70 billion VEBA (Voluntary Employees’ Benefit Association) fund. BCBS has a history of friendship with Ron Gettelfinger and the union, BCBS employees are unionized, and a union representative sits on the BCBS Board of Directors.

BCBS, with the present TRUST agreement in its file, can offer the UAW whatever the union wants in limitation of benefits, restrictions on procedures and laboratory studies and restraints on referrals.

Whatever BCBS wants from us, the new TRUST allows the Blues to take from us. There is little we can do except comply.

But there is a little we can do.

We need to foster competition with BCBS; we need commercial health care carriers to remain alive in Michigan. We may find the style of United Health Care, Aetna, and others clumsy and complicated but we should stop short of walking away from dealing with them. We should encourage alternatives to BCBS insurance rather then giving BCBS another opportunity to extend its monopoly.

Now we must take the BCBS contract TRUST (The Responsible Use System of Treatment) on FAITH (Failure [of] Another Insurance To Help). BCBS has the courts behind it, but we can also act judiciously: Keep the embers of competition alive.

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Oakwood Posts Pricing Info

Oakwood Healthcare, Inc. (OHI) reports that it is the first health care system in southeast Michigan to post up-to-date and comprehensive pricing information for hundreds of surgeries, tests and procedures on its Web site, www.oakwood.org/value. This is a natural step forward as Oakwood was the first healthcare system in southeast Michigan to begin posting key quality outcomes on its Web site more than two years ago.

Oakwood has also worked in partnership with the Michigan Health & Hospital Association (MHA) in the development and launch of the MIHospitalInform.org Web site, scheduled to debut in January 2008. The MHA site includes data from Medicare, featuring the top 50 inpatient and outpatient procedures. Together, Oakwood and the MHA are leading the way by voluntarily releasing detailed quality and pricing information.

In addition to consumer feedback, Oakwood partnered with both insurance payers and employers in the development of the pricing portion of its Web site.

“Everyone wants more information, they want to be educated,” said Julie Peltier, director of hospital contracting for OHCS/Multiplan insurance company. “We as insurance companies need to try to educate members and encourage them to make more educated decisions on where they’re going to receive services and Oakwood’s transparency program helps us accomplish this goal,” said Peltier.

Dearborn-based Ford Motor Company employs approximately 300,000 employees and 108 plants worldwide. Oakwood’s readily accessible pricing information will allow Ford employees to become more involved in their healthcare decisions as well.

“Ford commends Oakwood for making this type of information publicly available,” said Dr. Walter Talamonti, Ford Motor Company Medical Director. “Our health plans are consumer-driven and we ask participants to be more involved in all aspects of care. They can’t do that without complete information, and very few truly know what medical procedures cost. This is an important step in the right direction.”

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Bush Signs SCHIP Extension

Politically, the move was a victory for Bush, although Democrats say it will come back to hurt Republicans at the polls.

The extension of the State Children's Health Insurance Program is expected to provide states with enough money to cover those enrolled through March 2009. Bush and some Republican lawmakers say the program will still serve those that it should: children from families who earn too much to qualify for Medicaid but cannot afford private insurance.

"We're pleased that the program will be extended and that states can be certain of their funding," White House spokesman Tony Fratto said.

Yet many Democrats -- with help from other Republicans -- wanted to give the program a significant cash infusion and broaden coverage to an estimated 4 million children. They overwhelmingly supported use of a tobacco tax increase to pay for the expansion.

The matter came to dominate legislative debate and further sour relations between the Democratic leadership and Bush this year. Twice, Bush vetoed bills that would have expanded the government-provided health insurance for children.

The Democratic-pushed bills would have expanded the program by $35 billion. Bush said the legislation did not put the neediest children first. He opposed the tax increase and, more broadly, fought against what he saw as a movement toward more government health coverage.

The joint federal-state program currently provides benefits to roughly 6 million people, mostly children. Democratic lawmakers plan to try again to expand enrollment.

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President Approves HHS Spending Bill

President Bush signed a densely packed appropriations bill that contains the HHS fiscal 2008 budget and those of 10 other federal agencies, but lashed out at federal lawmakers for stuffing it with more than $10 billion in pet projects.

The bill allots $65.6 billion in discretionary funding for HHS, giving millions of dollars more to medical research, rural healthcare and community health centers. Both the House and Senate easily cleared the total $560 billion legislative package late last year. At the outset, the bill funds HHS at about $1.5 billion more than the department’s 2007 budget, an increase of about 2.3 percent.

The bill also provides the Veterans Health Administration with $37.2 billion to help treat the 5.8 million patients it expects in the next year.

“I am disappointed in the way the Congress compiled this legislation, including abandoning the goal I set early this year to reduce the number and cost of earmarks by half,” Bush said. In its entirety, the bill contains nearly 9,800 earmarks, including more than $250 million in funding for 889 earmarks for district hospitals, university medical centers, community health clinics and other related services.

“These projects are not funded through a merit-based process and provide a vehicle for wasteful government spending,” Bush added.

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Oakwood Wins Quality Award

The Michigan Quality Council (MQC) announces Oakwood Healthcare, Inc. as a 2007 Quality Leadership Award recipient.

The Michigan Quality Leadership Award is the highest honor for organizational performance excellence in the state. It is awarded after a rigorous review by a team of examiners who perform a comprehensive site visit and then submit a report for final evaluation to an independent panel of judges.

The MQC’s Leadership award program is modeled after the Malcolm Baldrige National Quality Leadership program. Both programs evaluate an organization for excellence in seven categories of performance: leadership; strategic planning customer focus; measurement, analysis and knowledge management; staff focus; process management; and organizational results. Participating organizations receive a feedback report identifying strengths and opportunities for improvement; those who demonstrate mature processes and outstanding results may become award recipients.

“Oakwood Healthcare System has implemented consistent processes across its entire system. The organization focuses on improving the healthcare experience for patients, their families, physicians, employees, and the community,” said Geri Markley, executive director, Michigan Quality Council. “Oakwood is a role model for other organizations in Michigan and in health care.”

“As the Oakwood Healthcare System’s vision states, we want to be ‘the recognized leader in clinical quality, service and value as an independent health care system.’ This honor is proof that our efforts are being recognized by external experts,” said Brian Connolly, president & chief executive officer, Oakwood Healthcare, Inc. “I am very proud to lead Oakwood on its continued journey to excellence.”

The MQC can be found on the World Wide Web at www.michiganquality.org. For more information, contact 734-929-9124 or mquality@cleary.edu.

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Four States Make Major Med Mal Moves

Indiana: The rates that physicians pay to participate in the state Patient's Compensation Fund will decrease by 19.1 percent this year, and the rates that hospitals pay will decrease by 1.3 percent, according to the Indiana Department of Insurance, the Indianapolis Star reports. The decreases, the first since the establishment of the fund in 1976, will take effect in March 2008. Physicians and hospitals that decide to participate in the fund receive $1 million more than the $250,000 in malpractice insurance that they must obtain on the private market. In addition, participation in the fund caps their medical liability at $1.25 million. The fund also provides compensation for patients injured by health care providers (Lee, Indianapolis Star, 12/14).
Maryland: The Medical Mutual Liability Insurance Society of Maryland, the largest malpractice insurer in the state, late last year announced plans to use an almost $100 million dividend to reduce malpractice insurance premiums for physicians by 8 percent, pay physicians $13.8 million in credits against premiums for 2008 and return $84 million to the state for emergency subsidies, the Baltimore Sun reports (Salganik, Baltimore Sun, 12/14). State Insurance Commissioner Ralph Tyler last month ruled that Med Mutual, which had declared a $68.6 million dividend, should return the full amount to the state. However, Tyler allowed Med Mutual 30 days to develop an alternative plan. Med Mutual said that conditions in the malpractice insurance market have since improved and allowed them to declare a larger dividend (Dominguez, AP/Washington Times, 12/14).
New Jersey: The state Medical Malpractice Liability Insurance Premium Assistance fund plans to pay $16.4 million in subsidies to help physicians in the highest-risk specialties cover the cost of malpractice insurance, state Banking and Insurance Commissioner Steven Goldman announced late last year, the Newark Star-Ledger reports. According to Goldman, physicians who accept the subsidies must continue to practice in the state for two years. The state as of Dec. 14 had sent checks to 1,200 physicians (Livio, Newark Star-Ledger, 12/15).
New York: The 475 physicians in the state who participate in the state Medical Malpractice Insurance Plan, which provides malpractice insurance to those who cannot obtain coverage in the private market, might have to pay significantly higher premiums because the fund has a $525 million deficit, Long Island Newsday reports. According to the state Insurance Department, the deficit indicates a "looming insurance industry crisis," as malpractice insurers must cover the cost. A Medical Malpractice Task Force has begun to evaluate the fund and plans to send a report to Gov. Eliot Spitzer (D) by the end of the year (Ochs, Long Island Newsday, 12/17).

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Obama, Clinton Spar On Health Care

Sen. Hillary Rodham Clinton is on the attack against her main rival, charging that Sen. Barack Obama's health plan would leave millions of Americans without medical protection while hers provides coverage to all, according to a report in the Baltimore Sun, Dec. 26.

The assertion, flatly rejected by the Obama campaign, rests on a pivotal difference between the two Democratic presidential candidates' health proposals. Clinton says she wants the government to require all citizens to buy insurance or face a penalty. Obama relies on a mandate for children only, and instead emphasizes ways to make coverage more affordable.

The seemingly technical distinction has launched an impassioned debate among economists, health care analysts and politicians, and has fueled a key campaign argument in early-voting states such as Iowa. It will likely receive more attention as the election season grinds ahead.

Clinton is not alone among Democrats in calling for all adults to buy insurance. Former Sen. John Edwards of North Carolina, New Mexico Gov. Bill Richardson and Sen. Christopher J. Dodd of Connecticut have included the requirement in their health plans, making Obama the most notable outlier in the party's presidential field.

Clinton is using the issue to level her sharpest charges to date against Obama.

"He's called his plan 'universal.' Then he called it 'virtually universal.' But it is not either," she asserted in a recent Iowa speech. "And when it comes to truth in labeling, it simply flunks the test."

Clinton mailed a letter to Iowa voters, over the signature of former Gov. Tom Vilsack, which says "Mr. Obama threw back talking points worthy of Rudy Giuliani or Mitt Romney" when questioned about "flaws" in his plan.

In response, Obama distributed a piece in New Hampshire that defended his health proposals and urged voters to "remind Hillary Clinton" that the Jan. 8 primary "won't be won by launching misleading, negative attacks."

But as the concept of a health insurance mandate gains currency within top ranks of the Democratic Party, the feasibility of the idea remains uncertain and its effects are unproven. As the Obama campaign points out, similar requirements in other areas, such as mandatory automobile insurance and motorcycle helmet use, never result in universal compliance.

Only one state, Massachusetts, requires residents to buy health coverage. But the rule is just kicking in, making it too soon to judge how it is working. California lawmakers are considering a similar proposal.

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