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 August $4.6 million in losses send shivers through Health Net of Oregon Health Net of Oregon is in a financial tailspin. The for-profit health plan, previously known as QualMed, lost at least $4.6 million during the first six months and faces close to $10 million in losses by year's end. To combat that trend, Health Net is shifting its claims, enrollment, billing and administration to California, said Judi Irving, CEO. Thus far, 20 people have been laid off; another 80-90 people will probably receive a pink slip in the next few months. By January 2001, Health Net anticipates having a staff of 130, down from its peak of 250. "There's no truth to the bankruptcy rumor," Irving said. "Our parent company, Foundation Health System, is flush with cash." Now the question on the minds of brokers and employers is whether Health Net will be around for the long-term. "It's real scary for us as brokers and consultants," said Nancy Hawkins, who manages the benefits department for JBL&K Risk Services. "We can't tell how stable they are. They tell us they're committed to this marketplace, but when we see they're in and out, it leads us to wonder. We certainly want them to be a player because we want as many markets as possible, and we certainly hope they'll stay in this market." ODS quits Oregon Health Plan in tri-county area The decision by ODS Health Plan to exit the Oregon Health Plan in the Portland area because of financial losses could jeopardize other insurers. Some are asking why they should have to accept the 6,812 people left by ODS, many of whom have chronic conditions and require thousands of dollars of medical care. "This may be the beginning of the landslide," said Jeff Heatherington, CEO of FamilyCare. "It's just a further indication that what's being required and what's being paid are not in sync. At this point, we have no good dialogue going between OMAP and the contractors about the rates. The question in my mind is can anyone be successful in the long run?" Other health plans have sufficient capacity to absorb the ODS members, said Marlene Haugland, acting manager of the delivery systems unit. Aside from Providence Health Plan, which has 25,085 members and is closed to new enrollees, Regence HMO Oregon, Kaiser Permanente, CareOregon, FamilyCare and Tuality Health System are open. Providence doctors hit a home run The physicians who contract with Providence Health Plans have reached agreement, two months after sending a termination letter. "Most of our economic requirements were met," said Dr. James Waskey, president of the 1,500-member InterHospital Physicians Association. "We're getting our doctors up to the median national income and making progress toward parity between primary care and specialty physicians." Greg Van Pelt, chief executive of Providence Health Plans, recognizes this is a challenging time for doctors and for health plans. "We're all doing uour best to collaborate and provide a high level of service to our members." Myhealthbank complies with IRS regulations Contrary to the opinion of insurance brokers, Myhealthbank doesn't need permission from the IRS before consumers can accumulate money i pre-tax account for medical services. "We've developed a product fully compliant with all IRS regulations," said Daniel Field, vice president of legal and regulatory affairs. The new venture debuts in Eugene and Bene with employers signing up in October. Field, who spoke before the Northwest Healthcare Roundtable, said Myhealthbank has letters of intent from several Eugene employers - the number of employees is shown in brackets - Eugene Marathon Coach (1,000), Centennial Bank (350), Land County Electric (100), PCS Scanning (900) and Guaranty Enterprises (380). In central Oregon, letters of intent have come from Eagle Crest (350), CODH (235), Orthopedic and Neurological Center (125) and Mt. Bachelor Resort (979). By next March, Myhealthbank anticipates having 2,500 subscribers, and intends to have one million lives by the year 2003 after expanding into California, Washington and Idaho, said Field. Letter from the editor Oregon Health Forum has been accused of "vilifying the drug industry, utilizing sound bites and castigating drug companies as the root of all evil" by several pharmaceutical representatives who used to subscribe to our independent health policy newsletter. Because of the "bad press" the drug industry claims it has received the past few months, 45 drug representatives have canceled their subscription, and two companies, Schering Laboratories and Searle, no longer receive any copies of our newsletter. This isn't the first time Oregon Health Forum has felt rancor from its subscribers about newsletter articles. In the past, insurance companies and hospitals have canceled subscriptions in protest. Fortunately, a majority have returned to the fold. We certainly hope the pharmaceutical industry follows their lead. Oregon Health Forum believes it's essential to report the facts about the health care industry and keep the dialogue going. I encourage the pharmaceutical companies to share their concerns by submitting letters to the editor. In the words of Edmund Burke (17298-1779), interpreted by Dr. Ralph Crawshaw who received Oregon Health Forum's Leadership Award in 1999, "The only thing necessary for the triumph of evil is for good men (and pharmaceutical companies) to do nothing." As a personal aside, I'm very supportive of the pharmaceutical industry. After being diagnosed with breast cancer in 1996, chemotherapy agents infused into my body have kept me alive. My deepest thanks. Diane Lund-Muzikant, Editor An article in the August 2000 issue, Oregon Health Forum indicated that the joint heart program between Rogue Valley Medical Center and Providence Health System was stalled. The two hospitals are working to develop a partnership. Oregon Health Forum regrets the error. Also in this issue...
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