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 February Increased insurance premiums Do hospitals cause rising insurance costs? Fact: Hospital profit margins are up.Fact: Health plans raised premiums this year in double digits. Ergo: Does it follow that hospital costs drove insurance prices higher? These questions are pertinent to Kaiser Permanente, which increasingly is contracting for hospital coverage. "We're paying more for it, and that's one of the drivers [of premium increases]," said Denise Honzel, vice president and health plan manager. Kaiser was able to keep premiums lower in the mid 1990s when per-unit costs were down; now utilization has remained stable, but per-day or per-case costs are rising. Health plans have a view from the sky Oregon insurers lease expensive suites in Portland's Rose Garden. ODS Health Plans, Standard Insurance Co. and Liberty Northwest appear to be the only Oregon insurers to have sky boxes at the Rose Garden. The annual lease on an "Executive Suite" runs from $65,000 to $135,000 a year -- though leaseholders got a break in the rates this year due to the NBA contract disputes. "It's not something we're ashamed of," said John Mangan, assistant vice president of public affairs at Standard Insurance Co. "We invested in the Rose Garden as part of the revitalization of northeast Portland. We use the box entirely for employee recognition and marketing for our sales force, and it's been very successful." Big bonuses for insurance higher-ups Standard Life Insurance pays retention bonuses to its top corporate executives. Seven senior executives at Standard Insurance Co., including its CEO and president, could share between $1.5 to $2 million in retention bonuses, according to an agreement with its board of directors. However, these bonuses will not be paid before the year 2001, said John Morgan, CBES, assistant vice president of public affairs and communications. "The retention bonuses are being paid one time to catch us up with our competitors." Ronald Timpe, CEO and president, told the insurance division and its policyholders, who met Jan. 27 to review Standard's demutualization plan. John King calls health care industry arrogant Why is the health care industry the last to take quality seriously? John King posed that question to physicians gathered at a conference sponsored by the Medical Society of Metropolitan Portland in February. "We're pretty arrogant," King said. "We have a 'field of dreams' mentality. We'll build it; they'll come." Chairman of the American Hospital Assn., King recently stepped down as CEO and president of Legacy Health System. Hospitals have lost the public's trust in the past decade, he added, and the AHA has an agenda to restore that trust. Robert Boss, MD, becomes Boardman's lightning rod The battle between Boardman residents and Morrow County Health District heats up. The conflict in Morrow County is far from over, despite the county commissioner's refusal to call a vote on a succession petition. A majority of the tax revenue to run the health district comes from Boardman ($326,000 of its $522,000 budget), whose population is twice the size of Heppner's. Robert Boss, MD, stands at the center of the conflict. His Boardman clinic sees more than 400 patients a month. When they need hospitalization, Boss sends them to Hermiston or Pendleton, rather than the health district's hospital in Heppner. To exacerbate the situation, the health district opened a clinic across the street from Boss. Drug cost strategy OHSU combats escalating drug costs. OHSU is trying to get its arms around the escalating cost of drugs, rising 15% a year, said Jim Walker, executive vice president. "We now have physicians wandering the halls with beepers on approving drugs," said Tim Goldfarb, director of OHSU's health care system. "There is not the free and open access to antibiotics and expensive drugs as there has been in the past." Not only is OHSU limiting its drug menu with a formulary, but it's "interrupting personal decisions by providers and individually authorizing some drugs," Goldfarb added. More HMO desertions Sen. Corcoran tells HMOs to stop cherry-picking. Cottage Grove became the latest community to face desertion by an HMO. Sen. Tony Corcoran (D-Cottage Grove) is determined to make certain it doesn't happen again. "This behavior, cherry-picking of the profitable areas and throwing away the poorer rural areas, is reprehensible," he said. "This is a horrible situation." Regence HMO Oregon is the culprit. It had an Oregon Health Plan contract for Lane County, which included Cottage Grove. After Regence left, most Cottage Grove residents were assigned to Providence Health Plan, which didn't have contracts with local physicians so people had to travel 21 miles to see a Eugene physician. Also in this issue...
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