Tenet Healthcare Corp. lost money in the third quarter but still boosted year-end projections. "While the economy has had some effect year-to-date, it remains less than we would have expected in the context of rising unemployment levels in many of our markets," Tenet CEO Trevor Fetter said. For the three months that ended Sept. 30, Tenet lost $3 million, or 1 cent per share, compared with a net income of $104 million, or 22 cents per share, during the third quarter of 2008.
Addressing what he says is a major shortfall in congressional Democrats' plans for a healthcare overhaul, Republican U.S. Sen. Saxby Chambliss of Georgia is co-sponsoring legislation he says would cut down on frivolous malpractice lawsuits. President Barack Obama and other top Democrats agree that medical malpractice litigation is part of the problem behind high healthcare costs, but they have suggested that it should be up to individual states to experiment with how to deal with the issue. The proposal by Chambliss and Sen. Lindsey Graham, a South Carolina Republican, would reach much further, the Atlanta Journal-Constitution reports.
Los Angeles County officials indicated that they will likely be forced to once again delay the reopening of Martin Luther King Jr. Hospital, this time to 2013. It was the latest in a series of postponements for the facility. Officials blamed the latest delay on a number of factors, including the still-pending agreement with the University of California to partner with the county to reopen the hospital. The selection of an architect also took more time than expected.
Some companies are charging lower insurance premiums to workers who meet benchmarks for healthy living, and the Senate's healthcare overhaul legislation would expand the trend.
But some patient advocacy and health groups are worried that it could mean higher rates for less-fit Americans, possibly pricing them out of their employers' insurance plans. Critics of the Senate proposal also say that giving special treatment to those who meet a company's fitness standards could undercut one of the promises of the Democrats' proposed overhaul: preventing employers and insurers from discriminating against people on the basis of their health status and preexisting medical conditions.
Although bad debt is up, fewer patients are paying their co-pays, and admissions of insured patients are down, there is a "silver lining on the recession cloud," according to Trevor Fetter, the CEO of Tenet: Fewer hospital workers are leaving their jobs. "Turnover has dropped dramatically," Fetter told the Wall Street Journal Health Blog. Pali Capital analyst Sheryl R. Skolnick said in a research report that Tenet employee turnover dropped 27%.
House Republicans have drafted an alternative healthcare bill that would reward states for reducing the number of uninsured, limit damages in medical malpractice lawsuits, and allow small businesses to band together and buy insurance exempt from most state regulation. The Republican bill promises to lower healthcare costs and expand insurance coverage "without raising taxes, cutting Medicare benefits for seniors, adding to the national deficit, intervening in the doctor-patient relationship or instituting a government takeover of healthcare."
The debate over healthcare for illegal immigrants continues to percolate in Congress, with lawmakers in both houses also wrangling over how much coverage to provide for immigrants who have settled in the country legally. Some Republicans favor excluding immigrants who have been legal permanent residents for less than five years, as well as all illegal immigrants. Democrats broadly agree that illegal immigrants should be excluded, but many want all legal permanent residents to be able to participate in proposed health insurance exchanges and receive subsidized coverage if they qualify, the New York Times reports.
House leaders released the final version of their nearly 2,000-page health package late Tuesday, Nov. 3, clearing the way for a vote by the full chamber as soon as the weekend. But Majority Leader Steny Hoyer (MD) declined to say when debate would begin on the measure, issuing a statement that said Democratic leaders were still talking with their members.
Physician-owned hospitals today launched a media counteroffensive with news that the Department of Justice reached a $27.5 million settlement with for-profit Universal Health Services and its subsidiaries for violations of the anti-kickback and false claims laws at the corporation's hospitals in McAllen, TX.
In a sharply worded press release, the trade group Physicians Hospitals of America said the DOJ settlement "uncovered the real problem—large, corporate hospitals who now owe millions for their illegal contracting schemes."
"Our opposition has attempted to pass the blame to physician-owned hospitals for cost concerns brought to light by a June 2009 article published in The New Yorker," said PHA Executive Director Molly Sandvig. "As the DOJ settlement demonstrates, that is simply not the case. The problem has never been physician ownership. The real problem lies with big corporate hospital chains."
DOJ announced last week that the whistleblower settlement with UHS' McAllen Hospitals LP, d/b/a South Texas Health System, was prompted by violations of the False Claims Act, the Anti-Kickback Statute, and the Stark Statute between 1999 and 2006 by paying illegal compensation to doctors in order to induce them to refer patients to hospitals within the group. DOJ said STHS entered financial relationships with several doctors and induced them to refer patients to STHS hospitals. The payments were disguised through sham contracts, including medical directorships and lease agreements, according to the DOJ.
STHS declined to comment on Wednesday.
Sandvig says corporate hospital lobbyists have successfully inserted in the House and Senate healthcare reform bills language that attacks physician-owned hospitals.
"Congress is about to be railroaded into punishing innocent physicians who have been trying to bring reform to hospitals by the same type of big hospital corporations that were finally caught in McAllen," Sandvig says.
Jeff Cohen, executive vice president for legislation with the American Federation of Hospitals, says language addressing physician-owned hospitals is contained in both the Senate and House healthcare reform bills because lawmakers understand the potential savings. Studies by the Congressional Budget Office have shown that limiting physician self-referrals in Medicare could save the federal government at least $1 billion over 10 years, says Cohen. "You can read a press release or you can look at the CBO or MedPAC and come to an opinion," he says.
Physician-owned hospitals have been on the defensive since Atul Gawande's scathing New Yorker article.
Using statistics from the Dartmouth Atlas of Healthcare, Gawande found that the $15,000 annual spending on each Medicare patient in McAllen was double the national average, and the second-highest per capita spending on Medicare dollars in the nation, following only Miami. Gawande suggested that physician-owned hospitals like DHR are a major cost-driver for the nation's soaring healthcare bill because of built-in conflicts of interest within the fee-for-service system that incentivizes physicians to perform needless and expensive medical procedures.
President Barack Obama was greatly influenced by the article, which The New York Times reported was "required reading" among White House staff.
While the public insurance options and health exchanges have dominated the health reform headlines, a bigger question to be considered is what other proposed insurance market reforms are included in the federal legislation that could make broad changes in the way healthcare is selected and used by everyone?
The three major healthcare reform bills currently being considered in the House and the Senate have similar provisions addressing these insurance practices—"suggesting that lawmakers are in agreement that these issues must be fixed," according to a new white paper released Monday by the National Patient Advocate Foundation, a national nonprofit organization headquartered in Arlington, VA.
The paper said that the insurance market currently is "broken" in three major respects:
Insurance is often not financially accessible at any affordable price because of enforcement of pre-existing condition exclusions through "underwriting."
The magnitude and severity of these insurance market failures is increasing over time, with health insurance often providing inadequate financial protection because of high out-of-pocket health expenses through deductibles, copayments, and limitations in coverage.
Insurance often imposes annual or lifetime (general or disease-specific) limits on coverage—leaving the patient effectively uninsured after they reach limits.
In the latest House bill (HR 3962), which is expected to be brought to the House floor for debate this week, there are many insurance reforms to be addressed, beginning in 2010:
Rescissions would only be permitted when fraud occurs and would be subject to independent review.
Plans would be required to justify premium increases through an annual review process that would be conducted by the Health and Human Services secretary working with the states.
A "look back" period that would apply for purposes of determining whether a person has pre-existing conditions would shrink from six months to 30 days, plus the period when a plan could exclude coverage for pre-existing conditions of new enrollees would be decreased from 12 months to three months.
Individuals under age 27 who are not otherwise covered would be could remain on their parent's health policy if requested.
Lifetime limits with a policy would be prohibited.
Also, beginning in 2013, other insurance market reforms would take effect under the House bill, such as guaranteed issue and renewal, no pre-existing condition exclusions, no premium variation based on health status or gender, and premium variation based only on age, geography, and family size.
Plus, in 2013, a public insurance option would be established, along with the health insurance exchange in which individuals without coverage and small employers would be eligible to purchase coverage. The exchange would be administered by a health choices commissioner, under the House bill, who would have authority to set standard for participating plans, auditing, and enforcing insurance market reforms.
As for payment rates, the Congressional Budget Office on Monday noted in a memo that the maximum share of income that enrollees would have to pay for a reference plan in 2013 would range from 1.5% for those with income less than or equal to 133% of the federal poverty level to 12% for those with income equal to 400% of the federal poverty level. (A reference plan refers to the premiums equal to the average of the three lowest cost "basic" plans, as defined in the bill.
Those with income below 150% of the federal poverty level would generally be eligible for Medicaid and ineligible for subsidies within the exchanges.
