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 January Providence Health Plan eliminates its HMO; creates an EPO The days of managed care at Providence Health Plan are creeping to a close. Contracts are being mailed to over 1,000 physicians statewide encouraging them to sign an Exclusive Provider Organization (EPO) contract that, in essence, replaces the HMO in mid-2002. Starting July 1, employers can sign up, however, Providence has yet to release premium costs or a comprehensive list of benefits. But a few things are very clear. IPAs, organized by physicians to negotiate on their behalf and handle medical management, will be shut out. And, physicians will no longer share risk. Instead, specialists and primary care doctors will receive a flat $55 conversion factor, guaranteed for 18 months, whether they practice in Portland, Hood River or Medford. Meanwhile, Providence will take over medical and quality management review. Regence BCBSO cuts off community donations Feeling stung by television advertisements that made the HMO industry look like a culprit, Regence BlueCross BlueShield has cut off donations to four community organizations -- the American Cancer Society, the American Heart Association, the American Lung Association and the Oregon Health Care Association. The decision came after these groups helped defeat Ballot Measure 4 last November, which would have set aside the multi-million dollar tobacco settlement into a trust fund. " They described that measure as nothing more than a special interest giveaway designed to line the pockets of HMOs or some similar language, " according to a Regence newsletter. " The truth is that the ballot measure was sponsored by the state's hospitals, and HMOs had nothing to do with its drafting, signature collection or campaign. However, the anti-measure 4 folks felt that a jab at the HMO industry would play well with the public even if the statements were untrue. " Coalition bypasses dental board They've talked to the Board of Dentistry until they are blue in the face, but the board stonewalls them every time. Now, the Oregon Dental Health Alliance is going to the legislature to loosen the restrictive licensing requirements for dentists. " This is just one plank in our platform of improving access, " said Dr. Gary Allen, director of clinical support for Willamette Dental Group. " The current shortage of dentists in Oregon has already contributed to access problems for many low-income citizens who cannot afford traditional dental insurance. The time to act is now. " Serious changes in store for Oregon Health Plan The Oregon Health Plan is undergoing a massive transformation following a charge by Gov. John Kitzhaber. By early March, the Health Services Commission will identify ways to bring more people onto the Oregon Health Plan -- without increasing the budget -- when it releases a report to legislators. Rather than take away benefits, the commission is expected to create new benefit packages for certain eligibility groups based on their health and economic vulnerability. The governor has recommended that benefits be reduced to a level that is " actuarially equivalent " to those required by Medicaid, which means trimming 22 percent off the priority list. He wants to use the savings to expand the FHIAP program, using federal matching dollars. FHIAP gives monthly subsidies to 5,000 low-income Oregonians, while another 14,000 people sit on the waiting list, a number which grows by 1,000 each month, said Rocky King, administrator. Drug costs reach $18.3 million last year Despite the aversion toward a drug formulary by manufacturers and consumer groups, Providence physicians aren't backing down. They've spent the past year analyzing the top 150 medications, which could lead to millions of dollars in savings. The premise has been to determine pharmaceuticals that are just as effective and less costly than drugs such as Claritin, Prozac and Prilosec, whose manufacturers spend millions of dollars promoting their products on the airwaves. " Our goal is to move market share to a drug that has equal or better efficacy, which is priced more efficiently, " said Dr. Gary Ericson, chief medical officer of the 1,310-member InterHospital Physicians Association, which contracts with Providence Health Plan, among others. For example, by switching from Prevacid and Prilosec to a proton pump inhibitor known as Protonix, the IPA calculated savings of $1 million a year. And that's just the tip of the iceberg. Drug formulary faces tough sledding With pharmaceutical costs estimated to jump 61 percent over the next two years, from $549 million to $885 million for the Oregon Health Plan, policy makers are looking for a way out. Among the most controversial proposals on Gov. John Kitzhaber's desk is establishing a drug formulary. But two powerful legislators, Rep. Jeff Kruse (R-Roseburg) and Rep. Ben Westlund (R-Bend), who spoke at a recent Oregon Health Forum luncheon, indicated they oppose a formulary. " A formulary restricts access, and I don't think it's in the best interests of patients, " said Kruse, chairman of the Health and Public Advocacy Committee, who mentioned consumer groups such as NAMI share his opinion. Hospital association pokes holes at mental health Oregon's mental health system has received a stern rebuke from the Oregon Association of Hospitals and Health Systems. Officials insist they didn't commission the report to deflate the mental health system's budget and, potentially, reward hospitals. But suspicions are mounting about their intent. " When people start shooting at each other to protect their own turf, that's not good for our clients, " said Gina Furman, who runs the Association of Community Mental Health Programs. " I'd rather see entities work for a solution than blast each other when things look glum fiscally. " She's concerned that some officials might be attempting to save the Oregon Health Plan and the hospitals on the heels of mental health. " We all need to work together, " she said. The 13-page report, in the hands of legislators and the governor, criticizes the mental health division for lack of accountability and a failure to control costs despite a shift to managed care. Legislators consider selling SAIF SAIF Corp. is coming under attack once again by Rep. Tom Butler (R-Ontario), who wants to privatize the state's largest workers' compensation insurer. Butler is rounding up legislative support, and Sen. Lenn Hannon (R-Ashland) might be in his camp. As co-chairman of the Ways and Means Subcommittee, Hannon's interested in creating a health care trust fund to help small employers purchase health insurance by selling one of the major insurance companies in Oregon, a semi-public private-quasi agency. Hannon wouldn't name the insurer, but SAIF certainly fits that definition. Over the interim, legislators heard that SAIF's business has never been better. " That everything is wonderful. That's when I said, this is the best time to sell when you have no worries about tomorrow, " Butler said. " We've found that private industry is a good way to do business in the state. When the state needs paper, you don't create paper mills. " Decline in primary care residencies concerns officials As the 2001 residency " match " approaches, advocates of primary care medicine are worried about another decline when medical graduates choose residency programs. This springtime ritual for placing medical students into residency positions has seen greater numbers of unfilled family practice and internal medicine slots. " The last three years, we have noticed a decline, " said Dr. Robert L. Phillips, who ran last year's National Residency Matching Program, and is assistant director of an American Academy of Family Physicians Research Institute. " We're not sure what it means, if it's a regular cycle or if it's a long-term downturn. But there are some folks who feel the fervor we saw for primary care five to six or seven years ago isn't here any more. " At the same time interest in family practice and internal medicine has fallen, the number of students choosing preliminary, one-year internal medicine residency slots -- which generally lead to specialties like neurology or radiology -- has grown. Also in this issue...
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