May 2007

Assisted living facilities flee state

Three for-profit corporations that own and operate assisted living facilities in multiple states have stopped accepting new Medicaid patients in Oregon at a combined 25 facilities since January. Only six gave notice in 2006, said Mary Gear, manager of the Office of Quality Care and Licensing of the Division of Seniors and People with Physical Disabilities.

Assisted Living Concepts, Mountain West Retirement Corporation and Sunwest Management are each pulling out of Medicaid contracts.

The onset of a major withdrawal of for-profit assisted living facilities can be attributed to several factors, including low Medicaid reimbursement, the level of attention Medicaid patients require and access issues spawned from the state’s moratorium on new licenses that went into effect in 2001, Gear said.

Hospital’s use of tax exempt bonds questioned in Salem

In December of 2005, Salem Hospital took out a loan in the form of a tax-exempt bond for $21 million to finance an electronic medical record system. At the time, it had $304.7 million in cash on hand, including investment assets. Providence Health System hasn’t paid back a cent of more than $300 million in tax-exempt bonds it took out in 2003 despite reporting $2.6 billion in investment assets system-wide in 2005.

These hospitals chose to finance these projects through low-interest bonds even though it had sufficient funds on hand to continue earning higher interest rates on their own investment income. The concept is generally known as tax arbitrage. With a few exceptions, hospitals being one of them, the practice is illegal.

Doctors avoid charity care talk

By the end of this legislative session Oregon hospitals will likely reach a landmark agreement on a uniform way to measure community benefits. For many consumer advocates, House Bill 3290, supported by the Oregon Association of Hospitals and Health Systems, is the culmination of decades of hard work.

Absent from the discussion for some time has been a charity care standard that applies to physicians, beginning with those who have hospital privileges, particularly on-call doctors for emergency room care. Up to 70 percent of a hospital emergency room visit could be billed by an on-staff physician not directly employed by the hospital, though often most billed charges come primarily from the hospital, according to anecdotal reports from patients and hospital administrators.

On the Record with Mark Ganz

Regence BlueCross BlueShield of Oregon shocked many when it announced its 2006 earnings. Profits slipped 26.5 percent for the health insurance giant, the largest decrease among its Oregon peers, who, for the most part, either stayed steady or added to their bankrolls.

Among those not surprised, however, was Regence Group CEO Mark Ganz. That’s because he went to his board and demanded the cut. After years of prosperity, it was time to give back, he said. But those aren’t the only changes going on at the Northwest Blues.

The company is reforming how it delivers care to its own members, pushing wellness activities and empowering consumers to make more decisions on their own. Even though Ganz served as a personal advisor to Sen. Ron Wyden (D–OR), he said that government intervention is not the key to restructuring health care. Instead consumers need to take charge.

Below are excerpts from a recent Oregon Health News interview.

OHN: You recently gave two presentations at the World Health Congress. How did they go?

MG: My response was really focused on the culture of health care. We need to truly transform it, instead of nibbling on the edges. The institutions of health care, the stakeholders if you will, spend a great deal of time trying to control the behavior, or manipulate the behavior of each other. It’s become attitudinal in the leadership across the industry. Whether it’s hospitals, pharmaceuticals, health plans, or clinics. If we don’t address that, that culture will trump any strategy.

Legislature not so willing for “any willing provider”

When Providence Health Plan took EPIC Imaging off its provider panel, one of the most widely used panels in the state, EPIC lost about 20 percent of its business. But because the change caused so much confusion among doctors who still referred patients to EPIC, the company decided to continue serving many patients that it wouldn’t receive payment from.

For that reason, in addition to a federal lawsuit EPIC brought against Providence – which was thrown out and now waits in appeals court – EPIC administrative director Bill Dunlap testified in support of Senate Bill 924, which would have done away with preferred provider panels in Oregon altogether.

Also in this issue...

• Rural malpractice subsidy bill tightens definitions
  
• Oregon Health News article buoys legislation
  
• DMAP aims for par on its own
  
• A closer eye on the state’s ASCs
  

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