19 November 2009

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A weekly newsletter covering California's healthcare industry.



19 November 2009

California Edition

November 19
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Deal Would Create Bay Area’s Biggest Med Group
Palo Alto Medical Foundation and MillsPeninsula Chief Executive Officer Brian Peninsula Medical Group tried to merge Roach, M.D., did not respond to requests five years ago, but the deal fell through. for comment. Now, the two entities are again attempting In 2004, Roach had confirmed in an to form a massive medical group that could interview with the San Francisco consolidate the delivery of healthcare Business Times that MPMG declined to services on the San Francisco Peninsula, merge with PAMF after months of Silicon Valley, the East negotiations, primarily Bay and Santa Cruz. because of concerns Palo Alto Medical Foundation Mountain Viewthat its structure as an Year Founded: 1930 based PAMF and independent physicians Physicians: 950 Burlingame-based association would not MPMG are on the fit in well with that of Mills-Peninsula Medical Group precipice of a merger integrated medical Year Founded: 1978 that would take effect in group. However, both April 2010, according Roach and PAMF Physicians: 350 to a source close to the executives suggested negotiations. If that the decision would approved, the merged be revisited in the entity would have nearly 1,300 affiliated future. physicians caring for about 700,000 That future is apparently now. insured lives – making it among California’s Observers say the landscape has shifted largest medical groups. in the intervening five years, and the forThe only remaining obstacle is a vote profit MPMG – which is about half the on the deal by Mills-Peninsula’s 200-plus size of the not-for-profit PAMF – is under physician shareholders, sources say. Palo greater financial and competitive Alto Medical Foundation spokesman Ben pressures to merge. Drew confirmed that such a vote will take “It is the reflection and formation of place soon. A formal announcement on a a trend among physicians to transaction, if any, will be made by the consolidate,” says Wanda Jones, second week in December, according to president of New Century Healthcare in Drew. San Francisco. Jones adds that the However, Drew declined further comment on any negotiations. MillsContinued on Next Page

Mills-Peninsula, PAMF Near Merger

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E-Mail [email protected] with the details of your event, or call (877) 248-2360, ext. 3. It will be published in the Calendar section, space permitting.



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In Brief
Leaders Urge KingHarbor Reopening
Six of California’s most inuential healthcare leaders have written a letter to the University of California Regents to move forward in a partnership to reopen King-Harbor Medical Center by 2012. The Regents are considering whether to work with the Los Angeles County Department of Health Services to reopen the hospital, which was shut down in 2007 after years of management problems. The signers of the letter are Benjamin K. Chu, M.D., President, Kaiser Foundation Health Plan; Lloyd H. Dean, President and CEO, Catholic Healthcare West; Eugene Grigsby, Ph.D., President and CEO, National Health Foundation; Howard A. Kahn, CEO of L.A. Care Health Plan; Mary Odell, President, UniHealth Foundation; and Robert K. Ross, M.D., President and CEO, The California Endowment. The group pledged to work with Los Angeles County ofcials, community health centers and civic leaders to create a new public-private model of health services for South Los Angeles. “This new approach, taking advantage of advances in health information technology, would do much to enhance the quality of care, improve health outcomes and reduce fragmentation and inefciency in health care delivery,” the letter declares.

decision of the UCSF Medical Group and Hill Physicians Group last summer to affiliate has put pressure on other groups of physicians to create larger entities. Moreover, Jones says that physicians also have to band together due to increasing pressures from commercial health plans and Medicare to decrease payments to providers. And, given the current economy, few new physicians have the financial resources to practice on their own – they’re looking to join medical groups or integrated care organizations such as Kaiser Permanente. “Kaiser, along with PAMF, have recruited 97% of the recent medical residents in Northern California,” Jones

says, adding that MPMG cannot compete to obtain new doctors. MPMG would also benefit from PAMF’s large investments in IT infrastructure such as electronic medical records, Jones says. The effects of such a deal are unclear on Sacramento-based Sutter Health, with which both PAMF and MPMG have been affiliated for more than a decade. Sutter officials declined comment on any pending deal. “This is something Sutter should bless,” Jones says. “They’ve been pushing for more closely aligned medical groups. They are probably smiling over the fact that the doctors now get it.”

Commercial Plans’ Downward Spiral
HMO Rolls Drop by 1 Million; New Markets Sought
California’s total health maintenance organization enrollment has fallen by more than 1 million since 2007, according to data from the Department of Managed Health Care. Although some of the enrollment losses have been offset by gains at public health plans, PaciCare Anthem commercial carriers have taken 2007 2007 signicant hits, raising questions 1.6 million 4.24 million about how they will fare in the 2009 2009 future. Large 1.1 million 3.67 million commercial plans such as Anthem Blue Cross, and PaciCare have lost more than 500,000 insured lives apiece between June 2007 and June 2009 – the most current timeframe for which the DMHC has complete data. Anthem, California’s second largest health plan, has dropped 568,000 lives, a decrease of about 16%. Plan ofcials declined comment. PaciCare, once one of the state’s largest HMOs, has seen its enrollment shrink by a third, to just over 1 million. PaciCare spokeswoman Cigna Kaiser Cheryl Randolph attributed the 2007 2007 losses to the 289,276 6.78 million recession, but also says 2009 2009 some members may 223,978 6.75 million be moving over to PPO products, which are not tracked by the DMHC. “There are 49 benet mandates in the HMO market, and meeting them has been a
Continued on Next Page

Study: Obesity Costs Could Quadruple
More than 40% of Americans could become obese by 2018, prompting healthcare-related costs to jump from about $80 billion a year to $344 billion, according to a new study

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HMOs (Continued from Page Two)
big challenge,” says Nicole Kasabian Evans, spokesperson for the California Association of Health Plans, a lobbying group. “Employers are also facing tough times, and sometimes a PPO product that doesn’t have as much regulation can offer more of a competitive price.” Anthony Wright, executive director of Health Access, a Sacramento-based consumer advocacy group, is concerned that the lost commercial enrollees won’t get health coverage anytime soon. “During the down times, healthcare coverages decreases, but it does not rebound during the good times,” Wright says. “Without reform, healthcare coverage will dwindle and erode.” Meanwhile, some Medi-Cal managed care plans have shown signicant growth. Inland Empire Health Plan, which covers Medi-Cal recipients in Riverside and San

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In Brief
issued by Emory University. Several Southern and Midwest states could see rates exceeding 50%. “Because obesity is related to the onset of so many other illnesses, stopping the growth of obesity in the U.S. is vital not only to our health -but also to the solvency of our health care system,” says Emory economist Kenneth Thorpe, lead author of the study, “The Future Cost of Obesity: National and State Estimates of the Impact of Obesity on Direct Health Care Expenses.” The study suggests that healthcare professionals treat obesity like a preventable disease, and better educate Americans on the consequence of the condition.

Bernardino Counties, has seen enrollment grow 25%, from 320,000 in 2007 to about 400,000 in June. Cal-Optima, which serves Orange County, has seen enrollment jump 15%. from 331,000 to just under 379,000. Industry observers believe the commercial health plans will try and recoup their enrollment losses in the public arena. According to Grant Cattaneo of the Cattaneo & Stroud consulting rm in Burlingame, many of the commercial plans will be making a push for “medi-medi” or dual-eligible enrollees – those who qualify for both Medicare and Medi-Cal coverage. Cattaneo notes that as many as 20 health plans are offering dual-eligible coverage beginning in 2010, compared to just a handful a couple of plans just a few years ago. “This is a very energetic expansion, and I wonder if they’re going to fare well,” Cattaneo says.

Poizner Unveils PPO Report Card
Scores Are Not as High Compared to HMOs
California Insurance Commissioner Steve Poizner unveiled earlier this week a report card for the state’s preferred provider organizations. The report card’s structure and ratings – based on four stars – are identical to those of HMOs released annually by Department of Managed Health Care since 2002. “This report card will provide information that has been lacking for too many years,” says Poizner, who announced the report cards in 2007. “It…gives consumers the ability to dig deeper and nd how well each insurer does on dozens of specic best practices. The report card provides a one-stop shopping experience for California's major PPO providers.” The plans were surveyed in 10 areas of care, and also given overall ratings by their members. Data was compiled via surveys of the plans and of members. The Consumer Assessment of Healthcare Providers and Systems (CAHPS) and the Healthcare Effectiveness Data and Information Set (HEDIS) were used for gathering plan-specic data. The ve PPOs surveyed – Anthem Blue Cross, Aetna, Cigna, Health Net and UnitedHealthcare – had an average score of 2.6 out of four for meeting national standards of care. That compares to the 2.9 average for the state’s nine HMOs that were surveyed in 2009. Aetna, Cigna and Health Net received ratings of three stars apiece, meaning about 75% of enrollees received appropriate care. Anthem and UnitedHealthcare received two stars apiece, which means about 66% of enrollees received care that met national standards. No health plan received a four-star rating in any of the categories. Anthem and UnitedHealthcare received single stars for treating adults. United also received a single star for checking for cancer. Health Net received a single star for treating children. A single star means about 60% of patients received appropriate care in the category. Blue Shield of California did not participate in the survey because it was transitioning to a new IT system and was unable to properly capture data. It will participate in next year’s survey, according to Blue Shield spokeswoman Erica Perng.

IPC Acquires Two New England Medical Groups
North Hollywood-based physician practice management firm IPC The Hospitalist Company has expanded into the New England market, acquiring Hospital Internists of New London based in New London, Connecticut, and Hospital Internists of Westerly based in Westerly, Rhode Island. The two practices have a combined 55,000 patient encounters annual. IPC now operates in 21 states, managing nearly 140 practice groups. “These two groups have done an excellent job of partnering with their hospitals to deliver high quality care and meet other important hospital goals,” says Adam Singer, M.D., IPC’s chief executive officer. “We look forward to maintaining and enhancing these partnerships by providing the existing hospitalist teams the tools and resources they need to continuously improve service levels.”


Payers & Providers


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Navigating The EMR Obstacle Course
Preparation, Patience And Hard Work Are Keys
As physicians and hospitals scramble to offers key learnings from which others may implement health information technology benefit: to benefit from $19 billion in incentives provided by the federal Economic Stimulus • Engage physicians and staff in every step of the project. As early as 2004, package, they may be tempted to take physicians and staff worked side-by-side shortcuts with some of the most resourcewith the MemorialCare IT team in early intensive aspects of implementation — design phases. training, support and communication. Yet, the •Develop a team of physician “champions” who will make importance of managing the presentations, visit colleagues’ human side of adopting an offices and talk one-on-one with Electronic Medical Record (EMR) other doctors, to dispel myths, system cannot be overstated. ! encourage dialogue and escalate As a veteran of two successful important issues to the build team. implementations of EMR in both inpatient and outpatient settings, •Develop a team of dedicated training support professionals who I’ve seen first-hand how the have clinical and application ‘softer’ aspects of project expertise to provide personalized execution can make or break the By ‘at-the-elbow‘ support to physicians. success of adoption — particularly Susan among the most critical group — •Design a reasonable but intensive Melvin, physician training program. In physicians. In July 2008, D.O. MemorialCare’s case, more than MemorialCare Health System 2,200 physicians received 8-16 hours implemented EMR at our two of training. Seventy-five took teaching hospitals, Long Beach additional training to become ‘super users’ Memorial and Miller Children’s Hospital, so they could offer support to their which represent a combined total of 800 colleagues during go-live. beds. And more recently, in September of this year, my family medicine residency !Today MemorialCare Medical Centers are practice in Long Beach, Memorial Family among just 1.5% of hospitals with a fully Medicine, implemented an ambulatory automated inpatient EMR. Yet we know that in EMR.! some ways our electronic journey has just During the hospital go-live in 2008, the begun. ! significant investments MemorialCare The healthcare system aims to give all made in extensive staff and physician physicians easy online access to their training, at-the-elbow support and patients’ hospital records and make comprehensive communication paid off. physicians’ ambulatory records immediately We saw rapid adoption of the Epic EMR available to hospital caregivers. There’s no and a Computerized Physician Order Entry doubt that achieving this goal will take great (CPOE) rate of 75 percent within one week technology, infrastructure and equipment, but of go-live (now holding steady at 98 just as important, it demands attention to the percent of all house orders). I work sidehuman factor and the value that substantive by-side with residents each day, so I never training, support and communication can had any doubts that a newer generation of offer.! computer-savvy physicians would adopt EMR fast, but I have to admit that the passionate conversion of many of my Susan Melvin, DO, is Chair of the MemorialCare seasoned colleagues has been a pleasant Physician Society Board of Directors and Director of surprise. It takes a significant number of Memorial Family Medicine in Long Beach.! interactive discussions, education and support — and a healthy dose of ‘this too Op-ed submissions of up to 575 words are shall pass’ confidence — for a physician welcomed. Please e-mail proposals to who has been practicing for years without [email protected], or call a computer to ride the steep learning curve (877) 248-2360, ext. 3. that a new EMR presents. Our experience

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Medicare Operations Program Manager - Oversees the day-to-day operations of the Medicare product. Must be the subject matter expert and resource for all departments related to L.A. Care's Medicare Special Needs Plan operations. Works closely with the Director of Product Operations to monitor regulatory and legislative changes that will affect Medicare compliance; works closely with the Centers for Medicare & Medicaid Services (CMS), to submit materials for CMS approval, and is one of the primary organizational contacts for CMS; will also work closely with the Sales & Outreach and Product Operations Manager, to ensure that day-to-day operations of the sales and enrollment process run smoothly, and trouble shoots any issues that may arise.! For complete job description, requirements, and additional opportunities, visit our website: www.lacare.org! To apply, email resume with salary history/requirement to [email protected], referencing “Payers & Providers Ad.”!

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will do it for a lot less. Employment listings begin at just $1.65 a word Call Ron Shinkman at (877) 248-2360, ext. 2, e-mail him at: [email protected] Or visit: www.payersandproviders.com

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