The state’s leading regulator of health maintenance organizations is throwing cold water on a plea by doctors to get more involved in an issue they view as a crisis: the failure of medical groups.

The California Medical Association has requested that Daniel Zingale, chief of the Department of Managed Health Care, perform financial reviews of medical groups that are assigned patients by insurers after the failure of another group.

The CMA believes the transfers often burden the new medical groups with patients who have a “pent-up” demand for services that then causes the new group to fail, in a kind of domino effect. The organization wants the department to make sure that the rates groups receive from insurers for the new patients are adequate, without the department actually setting the rates.

But Zingale, who received the request in a November letter, said the department won’t involve itself in what he calls a private contractual arrangement or in the thorny issue of rates, even if it does not involve rate setting.

The Deal: UnitedHealth Group Inc. has agreed to acquire Mid Atlantic Medical Services Inc. (MAMSI) in a $2.95 billion cash and stock deal. MAMSI shareholders will receive 0.82 shares of UnitedHealth and $18 in cash for each share of MAMSI. UnitedHealth will pay $860 million in cash and approximately 38.6 million in net shares. Based on recent UnitedHealth closing prices, the deal values MAMSI at $62.49 per share. The deal, which still requires regulatory and shareholder approval, is expected to close in the first quarter of 2004.

Discussion: Mid Atlantic Medical Services provides managed health care and insurance-related services to the Mid-Atlantic region. The company operates four HMOs and offers PPOs and psychiatric services through subsidiary Alliance PPO. MAMSI also offers home health care services through HomeCall and FirstCall and sells life and health coverage through its MAMSI Life and Health Insurance unit.

UnitedHealth Group offers a variety of health care plans and services. Company services include HMOs, Medicare and Medicaid options, health plans for large companies, and specialized care insurance offering vision care, dental care, transplant services, and other niche coverage.

The acquisition will give UnitedHealth a leading position in the mid-Atlantic region. Together, the two companies provide health benefits or related services to more than 3.5 million people in the region.

IN the late 1970s, Dr. Robert Margolis was part of small up of doctors working out of the basement of California ital Medical Center. His medical group, California Primary Physicians, cared for mostly elderly patients in underserved downtown Los Angeles, but in the ensuing years it rode the growth of Medicare and the managed health movement to evolve into HealthCare Partners Medical Group, the state’s largest private physician group. Margolis is co-founder and chief executive of the group, which has become known for its expanded use of computer systems that track patient records as a means of improving care. Margolis is also a big supporter of pay-for-performance, which provides doctors bonuses for following certain protocols of care. In January, he will become chairman of the National Committee for Quality Assurance, an accreditation group that’s developing pay-for-performance measurements for doctors, hospitals and other health-care providers.

Question: How would you rate doctors’ care these days?

Answer: Doctors, with very few exceptions, are hardworking professionals trying to do the fight thing. A lot of the problems that get the most attention are not within the doctor’s direct control.

Q: Such as what?

A: A patient has health problems over time, and it takes good information systems, reminder systems, outreach systems and other things to manage that. But in a traditional system, a doctor sees a patient for 15 minutes once every three months, or six months or a year and doesn’t have the opportunity to intervene in their lifestyle, their nutrition, their education about health care, any time in between. So it’s not that the doctors aren’t trying hard.

Q: What about hospitals?

A: There’s been a spotlight on errors that has made people nervous and cautious, but hospitals aren’t any less safe than they ever were. But a hospital has the same challenge as the doctor. Even if a hospital does the best it can, it can still discharge a patient into an uncoordinated system for follow-up care.

Q: So what can a doctor or hospital do about this?

A: I think coordinated physician groups and hospital networks with electronic records systems are much better positioned to create transparency of information and be accessible to patients and consumers to help them make choices. Right now, we’re not patient-centric as an industry. We’re location-centric.

HSBC has agreed to sell the entire issued capital of HSBC Salud (Argentina) S.A. to Swiss Medical Group. The net negative equity of HSBC Salud (Argentina) S.A. as at 30 June 2003 (under UK GAAP) was ARS3.6 million.

HSBC Salud (Argentina) S.A. is one of the leading providers of prepaid medical insurance in Argentina. The company has a network of branches across Argentina serving over 158,000 individual and corporate clients. Swiss Medical Group is a leading provider of health insurance services in Argentina with 300,000 clients and an annual turnover of ARS450 million.

The provision of prepaid health insurance is not a core business for the HSBC Group and, following the sale of a similar business in Brazil earlier in the year, it has decided to sell the business in Argentina. HSBC will use the majority of the sales proceeds to strengthen the capital position of its other businesses in Argentina.

The sale of HSBC Salud (Argentina) S.A. to Swiss Medical Group is effective 23 December 2003. Swiss Medical Group will take over the 422 employees who work for the company.

What members are talking about

“‘Fixing’ the health problems of patients. Physicians would be happy if they could just do this and nothing else. Medical group practices allow the physician to do this with minimal concern for the day-to-day operations that are handled by the professional administrative staff.”

Irene S. Heinemeier, CMPE, MGMA Board member and administrator, Cardiovascular and Thoracic Surgery Associates, Annandale, Va., iheinemeier@aol.com

“Physicians value group practice because of call coverage - they have the secure knowledge that when they are away, their patients are well taken care of and in good hands if a problem arises. Physicians also value the ability to mentor and be mentored in the medical group setting. New physicians learn from the practical experience of an established physician, and established physicians stay abreast of new training and techniques through their affiliation with newly trained physicians.”

“Group practice provides the physician with a community of like-minded physicians focused on the continuum of care for their patients. It also provides the opportunity for professional management by partnering with medical executives. Group practice is an ideal business model for the current health care environment, as it provides the foundation required to compete and succeed economically.”

Christine A. Schon, FACMPE, MGMA Board member and director of cardiac services, Deaconess Billings Clinic, Mont.,
“Physicians value the opportunity to collaborate with other physicians and to be able to provide the latest technology and therapies to their patients in an integrated group practice setting. They also value the idea of devoting more time to medical practice with competent administrators taking care of business operations, collections, community relations, etc. This makes physicians more efficient and often allows for an improved earning capacity, more fringe benefits and an improved lifestyle.”

A study released recently by an anti-affirmative action group says the University of Oklahoma discriminates against Whites in medical college admissions, but an OU official denies it.

The study by the Center for Equal Opportunity concluded that OU and four other colleges based some of their admissions on race, having studied admissions data from 1996 and 1999. According to the study, a non-Asian minority applicant — with all other things being equal — was four-and-a-half times more likely to be admitted over a White applicant in 1996 and five times more likely in 1999.

OU spokeswoman Catherine Bishop said the school considers factors in addition to grades and test scores, but that it has no racial or ethnic preferences or quotas.

The Center for Equal Opportunity is headed by Linda Chavez, former director of the U.S. Commission on Civil Rights.

The study showed many students were admitted to medical schools who could not perform and subsequently wasted tax money, Chavez said.

Chavez said using race to determine medical school admission violates the equal protection provisions of the U.S. Constitution. The study was compiled from admissions data from the OU Medical College of Medicine, the Medical College of Georgia, Michigan State College of Human Medicine, State University of New York (SUNY) Brooklyn College of Medicine and University of Washington School of Medicine.

The study concluded that all gave some preferences to minorities.

The study says that in 1999 at OU, the medical college rejected 18 Asian, 18 non-Asian minority and 118 White resident applicants.

Of those, 14 Asians and 70 Whites were rejected despite higher college grades compared with the median grade point average of the non-Asian minority students. Two Asians and 46 Whites were rejected despite having higher MCAT scores than the minority students; and two Asian and 29 Whites were rejected despite having higher grades and test scores.

Bishop said OU officials had not had the opportunity to read the report, but that the medical college is committed to educating well-qualified physicians.

Last year, the Center for Equal Opportunity targeted the admissions practices at public colleges and universities in Maryland, releasing a study indicating that Black students were being admitted with lower SAT scores than those of White students (see Black Issues, Oct. 26, 2000).

Manual provider credentials processing can create hours of data entry work and build mountains of paperwork. An Arkansas medical group learned that lesson quickly–and responded by implementing a credentialing software program that has helped staff save both time and money.

Scaling Paper Mountains

Cooper Clinic is a large multispecialty medical group headquartered in Fort Smith, Ark. The clinic employs 830 workers, including 130 physicians. Debbie Heimark, assistant director of human resources, heads the clinic’s provider enrollment and credentials verification process.

When Heimark joined Cooper Clinic five years ago, there was no credentialing software in place. When a new provider came on board, she had to manually complete as many as 13 different enrollment forms, get the provider’s signature and then mail the completed documents to each insurance carrier. She followed a similar process each time a staff provider’s license or credentialing information needed to be updated. The process amounted to hours of data entry work and piles of paper. Filling out forms by hand was not complicated, she says, but the process was redundant and left room for errors.

“I knew there had to be a better way to do provider enrollment,” Heimark says. About a year later, the medical group bought its first credentialing software. But she felt the headaches soon afterward. Within months, the software was obsolete, Heimark says. Vendor staff lacked medical background and failed to understand end-user needs. “The only thing that system did was warehouse information for us,” Heimark says. “We still had to manually complete many provider forms for various insurance companies.”

Heimark needed to find a more efficient option–and fast. As a member of the human resources department, she could not dedicate the majority of her time to provider credentials. After considering several vendors, Cooper Clinic focused on Brentwood, Tenn.-based Sy.Med Development Inc. and its OneApp healthcare credentialing software.

More than 21 percent of healthcare providers have implemented electronic medical record (EMR) systems, says a survey conducted by the Medical Group Management Association (MGMA) and Pfizer Health Solutions. Responses from 593 organizations also indicate 67.9 percent are still considering implementing an EMR.

Survey findings indicate a higher installed base, better satisfaction with systems, and a more proactive stance toward adoption of technology than has been reported widely. “Many assume the healthcare industry is afraid and slow to adopt technology,” says MGMA president William Jesse. “But these results show [that healthcare] is realizing the importance of technology and is embracing it to improve productivity and patient satisfaction.”

When Stefanie Bruemmer, the IT director for Queens Long Island Medical Group (QLIMG) in suburban New York, decided it was time to replace the legacy Avaya PBX system with new technology, she was looking to cut costs and minimize the capital outlay for replacement hardware.

“I was looking to reduce monthly expenses,” Bruemmer explains. “Originally, we weren’t considering a VoIP solution.” However, after reviewing proposals for replacement equipment, Bruemmer realized a Level 3 Communications solution would save significant financial outlays, reduce monthly communications expenses and provide a variety of scaleable and flexible features for the 21-facility, physician-owned medical group.

“At first, I was a little concerned about the quality,” Bruemmer admits. But a pilot implementation at two of the medical group’s facilities, including the corporate headquarters in Garden City, N.Y. where she is based, convinced her that VoIP was highly reliable. Another key benefit was that Level 3’s system ran on an open architecture, so that she could add a PBX or other phone equipment from virtually any vendor in future years if she so desires.

“That’s what really sold it,” says Bruemmer, who successfully lobbied the purchase through her hospital group’s chief executive and chief financial officer. “We couldn’t find a reason not to buy Level 3.”

FULL SERVICE VOIP

QLIMG started its search for a replacement phone system in December 2003. The two pilot installations involving 120 Internet phones went live in mid-August. The entire installation is planned to be completed at all 21 of the company’s medical facilities on Oct. 29. Although still in its prototype phase, VoIP appears to be delivering clear benefits.

Unlike some other VoIP business customers, the medical group will use its system to communicate not just among internal staff, but for everyday interaction with thousands of outside customers In fact the various VoIP calling features allow the medical group to handle in-patient telephone calls more efficiently. Patient calls are seamlessly transferred among the different facilities. Previously, patients had to hang up and dial different facilities separately if a health care provider was on the move or a referral was made.

The Washington, D.C.-based Marijuana Policy Project has provided more money to back voter initiatives to legalize marijuana than local supporters in three states where the issue is on the ballot.

Voters in Alaska, Montana and Oregon will decide in November.

The Alaska State Public Offices Commission reported the D.C. group has provided 93 percent of the $550,000 budget for Alaskans For Marijuana Regulation and Control.

The local organization has spent the money for radio and television ads, direct mail, paying staffers and conducting voter registration phone drives.

The Marijuana Policy Project has spent about $476,000 in Oregon and $197,000 in Montana.

The Alaska question would allow persons over age 21 to possess marijuana and require the state to adopt regulations for the legal processing and sale of the drug. Sale to minors would be prohibited.

Montana and Oregon would legalize marijuana for persons with cancer, AIDS and other serious illnesses.

The Marijuana Policy Project estimates Oregon would immediately have more than 10,000 users if the ballot initiative passes. The measure would require the state to establish nonprofit medical marijuana dispensaries.