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 August HMO Oregon backs away from Managed Healthcare NW A contracting arm owned by Legacy Health System and Portland Adventist Medical Center has fallen into disfavor with Regence HMO Oregon. Until now, 2,000 Portland-area physicians and 600 ancillary providers have been forced to rely on Managed Healthcare Northwest, Inc. (MHN), to handle their contract negotiations. But after Regence's CEO, Donald Sacco, and Dr. Bart McMullan, executive medical director, met with physician leaders last spring and heard their dissatisfaction with MHN, they decided to start cutting the cord. Physicians were notified in a May 14 letter signed by Sacco and Dolores Russell, president and CEO of MHN, and given two alternatives -- they could contract directly with Regence or continue their relationship with MHN. Hospitals are also free to negotiate with Regence. Before contracts go out the door, Russell wrote to Legacy and Portland Adventist physicians Aug. 3 encouraging them to stay aboard, promising to share more details about contract plans very soon. "Regence may approach you to talk about your opportunity to contract with the health plan directly in calendar year 2000," she wrote, reminding physicians they accounted for 70% of hospital utilization for Regence HMO Oregon plans. [Physicians] feel MHN doesn't provide information about utilization management or analyze financial data. "MHN has done a lousy job communicating with physicians," said an IPA executive. Some physicians are skeptical about dealing with Regence and fear the health plan might use a divide and conquer mentality to ratchet down rates. . . Eventually it comes down to dollars and cents - wherever the doctors get the best deal, that's where they'll end up. Business coalition backs joint health care purchasing Oregon employers have the potential of reducing health care costs by purchasing health insurance for over one million people. Recently the state's largest employers banded together as the Oregon Coalition of Health Care Purchasers - representing the Port of Portland, Tektronix, Northwest Natural, the Public Employees' Benefit Board and the cities of Eugene and Portland. In northern California, the Pacific Group on Health has been extremely successful in lowering costs by joint purchasing, said Catherine Kunkle, vice president of the National Business Coalition on Health. Kunkle comes to Portland, Sept. 16 to speak before a breakfast seminar sponsored by Oregon Health Forum. "Oregon could use their model and go out to bid to health plans by having a uniform benefit design," Kunkle said. Elsewhere, coalitions in Memphis and Houston have formed large PPO networks. The national coalition represents 8,000 employers in 40 states who provide health insurance to 30 million employees and their dependents. Besides assisting employers with joint purchasing, the coalition has national contracts for pharmaceuticals, vision care, and outpatient laboratory tests. It recently signed a contract with Gordian Health Solutions to improve the health of high risk populations and plans to offer a national PPO network as well as lower prices for outpatient radiology. "We can get fairly deep discounts on MRIs and CT scans," said Kunkle, who oversees national contracting. Friends of Public Health could inherit $2.5 million with merger When Billi Odegaard and Mary Lou Hennrich talked about launching a foundation devoted to public health to celebrate their retirement from Multnomah County, little did they know it would reap millions of dollars. "Don't give us presents; help public health," urged Odegaard, who spent 30 years as director of Multnomah County's Health Dept. About the same time Friends of Public Health came into being, Benova was purchased by AFSA Data Corp., freeing $2.5 million set aside in a trust fund and Project Health leaped forward. In September, Friends of Public Health and Project Health will merge or form a strategic alliance, said Bernie Thurber, a Portland attorney who chairs Project Health's board. "It's just a question of what's the easiest way to bring it about." Eventually, Project Health could have another $2.5 million in its bank account, depending on the success of Benova over the next three years, Thurber said. By early 2000, the new foundation should be prepared to give grants. . . Philosophically the two foundations have overlapping missions: they both want to promote education and appreciation for public health, said Sherri Black, interim executive director of Friends, who's recruiting a permanent director to run the foundation. Initially, Multnomah County gave the Friends a start-up grant of $90,000; another $33,000 came from fund-raising. "Having adequate funding has been a constant struggle we in public health haven't tapped into in a very sophisticated way," said Odegaard. State shoots down Umatilla vote Umatilla County's controversial patient's rights ordinance, designed as a blow to managed care, took a legal punch from the attorney general. On June 23, AG Hardy Myers, along with Insurance Commissioner Michael Greenfield, announced the state would attempt to invalidate the law because it prohibits insurers from restricting a patient's choice of physician. Umatilla County won't fight back, said Emile Holeman, who chairs the county commission. "We've been put in a box by the Justice Department and won't mount a raging defense," he said. "It troubles me why the constitutionality issue isn't up front before the people vote." Umatilla passed the patient's rights ordinance by a landslide -- 7,284 to 2,582 with 31% of registered voters casting ballots. AG's spokesman Peter Cogswell said the ordinance goes against state policy. "The insurance statutes have a certain purpose -- to provide health care for as many Oregonians as possible." "We had hoped the large majority in favor of this initiative would send a message," said Mike Megehee, the Pendleton chiropractor who drafted the initiative. "But this is one of those instances where the desires of the state are not compatible with those of the general public." Megehee is preparing a state wide initiative for the November 2000 ballot. Most pharmacy discount cards outlawed in Oregon With the passage of House Bill 2520, the Oregon State Pharmacists Assn. emerged as a hero in the fight against fraudulent prescription discount card companies. The legislation is meant to protect cheated consumers and aggravated pharmacies. It's now a crime for companies to distribute cards that offer discounts on prescription drugs unless they have contracts with pharmacies. Violators face a $10,000 fine. Prescription discount cards are among the latest trends in the something-for-nothing era of consumer savings. The card companies, which target seniors, guarantee a discount -- up to 84% -- for a $20 annual fee. But when the customer pulls out the plastic at the pharmacy, the discounts vanish and the truth surfaces: the card company never established a contract with the pharmacy, and customer frustration is taken out on the pharmacist rather than the fleeting card company. "We don't want to ban all cards. We just want [to encourage] reasonable rules of business," said Tom Holt, OSPA's executive director. Hospitals, insurers can't stop newborn screening Despite opposition from the hospital and insurance lobby, Gov. Kitzhaber appears likely to sign House Bill 3246 requiring hospitals to conduct hearing tests on newborn infants, said Bob Applegate, his spokesman. The evidence is crystal clear. If a hearing problem is detected early, children have a much greater chance of developing normal language skills and keeping up with their peers in school. "If you wait until a child is six months old, you lose that window of opportunity because children don't catch up, it's like a lazy eye," said Dr. Jerry Sells, director of the Child Development and Rehabilitation Center at OHSU. Of the 33,000 children born each year, about 112 have hearing problems. The average cost of screening an infant is $35, while testing equipment ranges from $5,000-$20,000. Hospitals with 200 or fewer births are exempt. The Oregon Assn. of Hospitals and Health Systems joined with Regence BlueCross BlueShield of Oregon and Kaiser Permanente to oppose the bill and have urged the governor to use his veto pen. "This bill imposes an unfunded mandate on a provider," said Ed Patterson, vice president of government relations for the OAHHS. "If it goes into effect, it will become the community standard and even smaller hospitals will have to comply." Furthermore, there's no increase in the reimbursement rate for Oregon Health Plan babies, which account for at least 33% of all Oregon births. "The bill is also poorly written," Patterson added. "It says each newborn shall receive a screening exam within six months and puts the onus on the hospitals, yet they never see a baby after discharge." Lawmakers yield to needs of medically fragile children Testifying from his wheelchair before a legislative committee, 14-year-old Eric Thomas told lawmakers how much he loved living at home. "I live in a house with my mother and my father and my cats, LeMeiux and Tweety. I'm going to school and I'm having a heck of a good time...I have a girlfriend and lots of pals." Then Eric, who was born with a degenerative muscular disorder and has been on a ventilator all his life, told of his deepest fear: "I hope I don't lose my nurses because if I did...I would have to go live in the hospital. Being in the hospital is no fun." Eric was testifying in support of a bill that would have provided $5.9 million to help his family and at least 50 other families of children, who, like him, require lifetime, round-the-clock nursing care because of a catastrophic disability or injury. In Eric's case, his muscles are so weak, he needs a ventilator. Persuaded by Eric's testimony and that of other medically fragile children, the legislature allocated $1.25 million -- enough to help about 20 families, said Dr. Tina Kitchin, medical director at the Office of Developmental Disabilities Services. Most everyone involved knows this isn't the ultimate solution to a complex, heart-wrenching problem. "It's a situation where technology has outpaced our policy," said Kathryn Weit, policy analyst with the Oregon Developmental Disabilities Council. "Most of these kids are sent home to die, but with technology and 24-hour nursing care, these kids don't die. The situation became more acute in the last few years as insurance companies increasingly were looking to the bottom line and cutting nursing services off." Part of the problem, she said, is insurers have traditionally seen their role as covering medical, not custodial, care. "That doesn't work anymore." Also in this issue...
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